Q. My wife and I are getting a divorce. We are both federal employees with Thrift Savings Plans. My plan greatly outvalues hers. In my state, she is entitled to half of the value of my retirement account, and vice versa. Since we are both on the TSP, can I just transfer her entitlement from my account to her TSP account without a tax penalty, as this would be of greater benefit to her? A. She may request that her share be transferred to her TSP account using the appropriate TSP form.
Monthly Archives: December, 2013
Q. I will have worked four months short of the five-year mark when I leave the government to care for my aging mother. Can my FERS money be rolled over into my Thrift Savings Plan? A. No.
Q. After I retire, I am planning to withdraw $4,000 per month from the Thrift Savings Plan and I am not claiming Social Security. How will Social Security taxes be paid for the TSP I withdraw? A. Social Security taxes can’t be paid from your TSP withdrawals since they are not considered earned income.
Q. This is a follow-up to a prior question. I had asked whether converting my Voluntary Contributions Program account to an existing contributory Roth IRA would be taxable in light of the fact that I had pretax money in the Thrift Savings Plan. You had advised that it appeared to be a nontaxable event but that I should check with my CPA. I do not have a traditional pretax IRA. My CPA didn’t know anything about it, so I asked an expert in the field. The expert cautioned me not to roll over my pretax TSP into a traditional pretax…
Q. I am really confused over the Roth IRA and Roth TSP. I have an individual Roth IRA through Vanguard. I have a Thrift Savings Plan account that I max every year, and because I’m over 50, I also max my TSP catch-up contribution. I’m thinking of changing the catch-up contribution from the regular TSP to the Roth TSP. If I contribute the max to a Roth TSP, can I still contribute the max to my Vanguard Roth IRA ($6,500 to Vanguard and $6,500 to Roth TSP for a total of $13,000). Or do I need to choose just one…
Q. I have reverted back to a more conservative Thrift Savings Plan allocation: 67 percent G Fund/33 percent C Fund. I put in the maximum, including the maximum catch-up and, with match, it’s nearly $30,000 per year. My balance at 60 when I retire in five years should be between $500,000 and $600,000 depending on the return. I am estimating a 4 percent return. I am wondering about keeping this asset allocation and taking monthly payments starting near 4 percent or slightly higher at age 60. Is a distribution with 70/30 as indicated above a bad idea? I like the conservative allocation and…
Q. I plan to retire next year with 35 years of federal service (FERS) at age 56, and eligible to receive a Thrift Savings Plan supplement of about $18,000 per year. Once I retire, I plan to work to earn approximately $38,000 per year. Of the earned income, I plan to contribute $17,500 to my 401(k) plan and an additional $5,500 toward the catch-up contribution. The remaining $15,000 will be reported as an earned income on my W-2 and Form 1040. I plan to earn $38,000 for the year, so that my supplemental income will not be deducted $1 from my…
Q. I am the 401(k) specialist for our tribal government. We have a former employee who wants to roll over his 401(k) into making a deposit in CSRS. Is this possible? A transfer from CSRS into a 401(k) is not allowed, so should his attempted rollover be allowed? A. This is not allowed. CSRS deposits are made with after-tax money.