Q. I’m nearing retirement and have a Thrift Savings Plan loan. If I decide not to pay off the loan but to pay the taxes on the taxable distribution, am I still eligible for the one-time partial withdrawal after I retire? A. A declared taxable distribution does not violate the TSP’s eligibility requirements for taking a partial withdrawal after separating from service.
Monthly Archives: September, 2013
Q. I will be a 56-year-old CSRS employee with 33 years in service and 2,842 hours of sick leave. Since I contributed to the Thrift Savings Plan and plan on doing a one-time complete withdrawal, will I incur a large tax penalty? A. If you retire at age 56, you will not be subject to penalty for withdrawing money from your TSP account.
Q. I’m a Defense Department firefighter (special category). At what can I withdraw my Thrift Savings Plan without incurring any penalties? A. If you’ll settle for specific monthly payments, you can withdraw it any time after you separate from service without penalty. If you want a lump sum or monthly payments that don’t fall within the limits imposed by Internal Revenue Code section 72(t), then you’ll have to wait until you reach age 59½ unless you separate from federal service during or after the calendar year in which you reach age 55. In the latter case, any withdrawal you make…
Q. I’ve been retired for a few years and I’ve put 100 percent of what I have in to the C Fund that was closest to my life expectancy. I know I can’t purchase any more shares and that the way I make money is for the value of the shares to rise. I’ve been told that if I roll my Thrift Savings Plan account over to a company such as Fidelity, Schwab or Vanguard my monthly dividends would buy more shares and not only would my funds increase but my shares would too. A. I don’t see a question…
Q. How long after I retire do I have to repay my loan? Is there time to take a partial payment from the Thrift Savings Plan at retirement to pay the loan? A. You have 90 days following your separation to repay the loan. It doesn’t make sense to take a partial withdrawal to repay the loan, since any unpaid balance will be declared a taxable distribution when the deadline is reached but won’t count against your once-in-a-lifetime limit on partial withdrawals.
Q. My husband asked me to get a paper notarized and sign stating that I waive my rights to 50 percent annuity and so forth. Is he trying to keep me from any of it, or is that the only way to receive his withdrawal? A. You need to read and understand what you’re being asked to sign before you agree. In certain circumstances, the only way he can withdraw the Thrift Savings Plan money is if you agree to waive your claim for a survivor annuity. You have a right to certain benefits from his TSP account. If you…
Q. I’m a 57-year-old FERS employee with 21 years of service. My human resources benefits adviser said I will be eligible to retire on unreduced immediate annuity at 60 years old with 24 years of service. Would I be eligible for the special retirement supplement when I retire at 60 years old? The HR benefits adviser also said I can retire now on MRA+10 provisions, but my annuity will be reduced by 5 percent for every year I’m under 62. If I retire now, since I’m over 55 years old, would I be able to withdraw my Thrift Savings Plan…
Q. I have not worked since fall 2011. I’m on leave without pay with the Postal Service. Currently on disability retirement approved by Social Security and the Postal Service. The Office of Personnel Management has until November to finalize the disability retirement. On Sept. 23, I default on my Thrift Savings Plan personal loan ($5,300). I am entitled to agency retirement pay of $1,645 per month but cannot be paid until OPM acts. Social Security is roughly ¼ pay, and I cannot realistically pay the catch-up amount and the two monthly loan payments for at least two months. At that…
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…
Here’s the problem with risk: It’s important and few of us understand it very well, much less know how to control it or, better yet, how to use it to our advantage. Risk is like a shark swimming silently below you … in the middle of the ocean … at night. It’s invisible, but, nonetheless, it’s a threat. Imagine that you are stranded at sea, waiting to be rescued. What kind of shark is it? How big is it? Is it hungry? Is it alone, or are there others? These would be good things to know if you were trying…