Q. I have a general purpose loan and am planning to retire soon. If I choose not to repay the loan and take a tax distribution, will I still be entitled to make one partial withdrawal after retirement? Or will the unpaid balance of the loan be considered my one-time partial withdrawal? A. The unpaid loan does not count as your partial withdrawal.
Monthly Archives: March, 2013
Q. I am thinking of retiring soon and am considering taking a one-time post-retirement withdrawal from my Thrift Savings Plan to cover some debts so that I can live on my annuity. When requesting such a withdrawal, do you have to be retired both on the day it is requested and the day the money is disbursed, or can it be requested a few weeks before my last day assuming it will take some time to process and so I would not get the money until after I am already in retired status? I realize that we are probably only…
Q. I retired Dec. 29 at the age of 70 years and five months. I plan to take my Thrift Savings Plan money out, according to the Internal Revenue Service required minimum distribution table, which I understand I must begin no later than April 1, 2014, the year after the year I turn 70½. However, I may decide to take my one partial withdrawal, as well, and at the latest possible time. I’m pretty sure I read that I must make that withdrawal option effective by Dec. 31, 2013, the year I turn 70½, but now I can’t come up with…
Q. I am a GS-04, Step 10. My account balance as of Dec. 31 would provide me with a lifetime Thrift Savings Plan monthly amount of $451. As of this time, I contribute $300 every pay period to TSP. Let’s say my goal is to have a lifetime TSP monthly amount of $1,000. By how much would I have to increase my TSP amount each pay period? I am 52 years old. I am under FERS. If I was offered an early retirement, should I take it? Or should take the chance of getting furloughed for an uncertain amount of time? A. Unfortunately,…
Q. You received a question asking if one could transfer money from a Simplified Employee Pension IRA to the Thrift Savings Plan after retirement and you said “yes.” Is the answer the same for making the transfer before retirement? A. Yes.
Q. I worked for the federal government for over 28 years. I retired last year under Voluntary Separation Incentive Pay provisions June 30, 2012. I am considering re-employing/reinstating. Am I eligible to return to work on July 1, one year after retiring? Can I repay the VSIP in cash or in payments? I read once that you can make payments for up to 36 months upon re-employment but am not sure whether this is correct. I understand the VSIP must be paid back before I return to work. Upon re-employing with the government, will I be able to contribute to…
Q. I was approved for disability retirement in November under FERS due to my diagnosis of a malignant, incurable brain cancer (my life expectancy is six to nine months). I withdrew my Thrift Savings Plan in lump sum ($29,000) to pay my medical and living expenses. I am including my TSP distributions in my tax return. If I understand correctly, my TSP money should be added to my earned income (for example, if I earned $50,000 + $29,000 TSP =$79,000 total year of 2012 income) and it will be taxed as ordinary income. Is there any way for a terminally…
Q. I will be retiring from the military at age 66 in June. I only have about $40,000 in my Thrift Savings Plan account and would like a lump-sum withdrawal. How can you figure out how much will be taken out of that amount in taxes? A. The information you’re looking for is here https://www.tsp.gov/PDF/formspubs/tsp-536.pdf on Page 3.
Q. I did a direct rollover from the California Public Employees Retirement System (a tax-deferred retirement) into the Thrift Savings Program. I have received a Form 1099 from CALPERS. I do not know why CALPERS would send me a 1099 as the monies went directly from one tax-deferred account into another. Do I have to declare the CALPERS monies, even though they went directly from one tax-deferred account to another? If I have to pay taxes on these monies, wouldn’t that make my contribution to TSP ineligible? If I have to pay taxes on this direct rollover, wouldn’t that mean I would,…
Q. I am retiring under FERS soon. I am now age 69. I have about $175,000: 74 percent in G Fund; 24 percent in C Fund. I would like to move some or all out of the G Fund to get a better return. Your advice would be appreciated. A. This is not nearly enough information to determine the proper asset allocation for you. I will note, however, that the additional return you seek will come with much greater risk of loss than that posed by the G Fund, so be careful.