Q. I am a federal employee with a law enforcement (Department of Justice/Bureau of Prisons) retirement. I am planning to retire at age 51 with 23 years in my current agency, and six years and 11 months military time that has been paid back. This, along with 175 hours of sick leave, should give me a 30+ year LEO retirement. I have been told that if I wait until age 55, I can withdraw my entire Thrift Savings Plan balance during that year and do so without a penalty (before 59½ years of age) as long as I pay the…
Yearly Archives: 2012
Q. I’m 47 and plan on retiring at 56 with 34 years of service. If I open a Roth Thrift Savings Plan account, can I withdraw all of the money from the Roth account and withdraw a small monthly amount from my traditional account when I retire? The TSP website says I can make withdrawals (1) on a prorata basis between the Roth and traditional accounts or (2) you can separately transfer any portion of your Roth or traditional account to an IRA or other eligible employer plan. I wanted to withdraw all of the Roth money while my husband is still…
Many of my federal clients’ financial plans have been moving into “overfunded” territory, our periodic reviews and analyses show. This means they are planning to live beneath their means to the extent that they are taking more investment risk than necessary — or prudent — to achieve their lifetime financial goals. In most cases, this improvement in plan funding has been the result of investment performance that outpaced our expectation for the period. A quick review of the Thrift Savings Plan’s fund performance, available at www.tsp.gov, shows that domestic stocks, as represented by the C and S funds, and bonds,…
Q. I retired from the Navy last year (I have 20 years in) and am receiving my pension. I took a GS-12 job and am under FERS. I’ll be 39 in a few weeks. If I wanted to retire at age 57, what would be my monthly payout? For how long? I understand that there is a three-tier system using the Thrift Savings Plan and Social Security. Am I allowed to draw on those at age 57, or do I have to wait until age 62? Mike Miles: You may begin drawing from your TSP account immediately and without penalty after…
Q. I am a GS employee that is also a member of the Air Guard. I will be leaving on leave without pay to go through military training for roughly five to six months. How will this affect my FERS retirement and my Thrift Savings Plan contributions? Do I have to buy back my military retirement to obtain my FERS retirement contributions during my LWOP? A. Mike Miles: You may not contribute to the TSP while in LWOP status. Reg Jones: You will be on LWOP-US. Therefore, you will have to make a deposit to the retirement system to get…
Q. If I retire after 30 years of federal service at the age of 58, can I start withdrawing my Thrift Savings Plan, or do I have to wait until the age of 59½? I do not have any part of the TSP as a Roth. A. You will be free to withdraw your TSP assets without penalty.
Q. I am considering doing a partial withdrawal from my Thrift Savings Plan account and was wondering what the taxes might be. I am 63 years old, still working, with a FERS status. I wanted to move most of my TSP savings into a mutual fund/IRA and continue to make deposits in TSP. A. If you roll the withdrawal over into an IRA, there will be no tax consequences under current law.
Q. My wife is asking for 93 percent of my total vested account balance. Does total vested account balance mean what was contributed by me over the past 12 years, or the total value of the account which includes Va contribution and growth? A. It includes everything in your account except for Agency Automatic Contributions, which have not yet met the vesting requirement: “A participant is vested in (entitled to keep) the Agency Automatic (1%) Contribution in his or her account after completing 3 years of Federal service (2 years for most FERS employees in Congressional and certain noncareer positions).”
Q. I am a single, 57-year-old CSRS Offset retiree, mortgage-free, no car payment, no children and debt-free. I have enough pension to live on comfortably and still put away money into savings monthly. I have more than 30 quarters of Social Security credit. I have two six-figure IRAs that I do not plan to touch until required. My Thrift Savings Plan is approximately $400,000 and I have yet to touch it. I am perplexed about when to begin drawing money from my TSP, but I know that I will have to begin withdrawals by age 70½. Should I draw TSP…
Q. The Internal Revenue Service is penalizing me for withdrawing my Thrift Savings Plan. I am less than 59 years old, but I retired under a Voluntary Early Retirement Authority. It is my understanding that I do not have to pay an early withdrawal penalty because I am retired. Please correct me if I am wrong. I also need to find the regulations for the IRS if I am exempt from paying this penalty. A. Unless you retired during or after the year in which you reached age 55, or meet one of the other special exceptions, your withdrawals will…