59 1/2 rule and Roth IRA


Q. I am civil service, with more than 17 years of federal service, in FERS, and approaching 59½ and would like to withdraw 50-75 percent of my TSP and roll the full amount over into my Roth IRA account. I would leave 25 percent in my TSP and let it continue to grow for my remaining time in federal service. How do I go about doing this, if I can? Does this make financial sense to do this?  I plan on retiring at age 62; Dec. 31, 2014.

A. You may take an age-based in service withdrawal once you reach age 59½ and convert it to a Roth IRA. I can’t think of a good reason to do this, but you may have some unusual circumstances that I don’t know about.



About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

1 Comment

  1. Why would you want to take a huge tax hit on 50-75% of your TSP account just to roll it into a Roth IRA? If I wanted to convert my TSP or a traditional IRA to a Roth IRA I’d probably wait until after retirement when I’m at a lower tax rate. In your case 2015.

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