Q. I plan to retire in 22 months when I will be 62.1 years of age. I will retire in Virginia and immediately move to Texas. I estimate that I will be earning approximately $133,000 from CSRS, $6,900 from Social Security and $18,000 from Army retirement.
I already have two properties in Texas and plan to buy my live-in home in San Antonio shortly after I arrive in Texas.
I plan to cash in my Thrift Savings Plan at age 62 in Texas and use 100 percent of it as a down payment for the purchase of my home in San Antonio.
Based on my earned retirement income, what is the percentage of tax that I will have to pay when I cash out my TSP? Do I have to pay federal taxes on the TSP withdrawal if I am using the TSP withdrawal as a down payment on the purchase a home for my use?
A. I can’t tell you what tax you’ll owe on the TSP withdrawal. That will depend upon the details of your tax return. The withdrawal will be added to your federal tax return as ordinary income. I suggest that you engage a CPA to provide you with a pro-forma tax calculation.