Q. I have 38 years with the federal government. I have 240 hours of stored leave and, if I save my annual leave this year, I will have 208 hours of annual leave. This equates to 448 hours times my base pay, which is $33.92 for $15,196. When I retire at the end of this year, can I roll my lump-sum payment over to my Thrift Savings Plan account before taxes? A. No.
Monthly Archives: January, 2014
Q. I sent TSP Form 77 to the Thrift Savings Plan requesting that funds be withdrawn from my account and sent to a non-TSP IRA. When I returned from overseas, I discovered that a mistake had been made on the forms and instead of all of the requested funds going to the IRA, TSP sent 50 percent of the funds to the IRA and 50 percent to me less a hefty amount to the Internal Revenue Service. I asked for a reversal of the action, but the Federal Retirement Thrift Investment Board turned me down, saying that TSP had not…
Q. In your Dec. 16 column, you suggest leaving money in the Thrift Savings Plan as long as possible. I like the suggestion to withdraw only the required minimum distribution when the time comes. I am confused how this is done since, unlike the mutual fund companies, the TSP doesn’t seem to have an option of partial withdrawals. A. You’ll have to initiate monthly withdrawals to meet the requirement. Since you can’t go from automatic withdrawals based on your life expectancy to fixed monthly withdrawals, you’ll retain more flexibility by sticking to fixed monthly withdrawals. If your monthly withdrawals fall short of…
Q. A recent question read in part: “I have more than four years until military retirement (April 2018). At that time, will I be able to transfer all Roth TSP contributions to my Roth IRA? I have no plans of transferring the traditional TSP balance. The goal is to combine Roth TSP/Roth IRA contributions and pay cash for retirement home.” I agree that if you take a monthly withdrawal from the Thrift Savings Plan, they take from both traditional and Roth accounts. But I thought the TSP 90 form allowed transfer of Roth TSP contributions to a Roth IRA fund or…
Q. I’m planning on retiring this year at age 62 under FERS. I will have an outstanding Thrift Savings Plan loan balance of $16,000 and was not planning on repaying the rest of the balance and was needing to find out if the outstanding balance will be considered income and taxed with my other income for the year at the end of the year, since it will be tagged as taxable distribution? A. Yes, any loan balance outstanding 90 days after separation will be declared a taxable distribution at that time and reported as ordinary income for that year.
Q. I’m 66 and contributed money to a Roth IRA. I would like to withdraw all of it. Do I have any tax consequences? A. Not as long as you’ve had the Roth IRA for at least five years. The rules are a little tricky for figuring this out, so you should consult Internal Revenue Service Publication 590 and/or a tax adviser before proceeding.
Q. I plan on retiring just after I turn 59 with 30 years as a federal employee. Do I have to wait until 59½ to take anything out from my Thrift Savings Plan account either via partial lump sum or monthly amounts to avoid the 10 percent tax penalty? A. Not if you wait until you’ve retired to request the withdrawal. You will be exempt from the early withdrawal penalty.
Q. I am on federal disability retirement. If I make more than 80 percent of my high-3, I lose my disability retirement. If I withdraw from my Thrift Savings Plan, does it count as earned income, and will it make my disability pension stop? A. No.
Q. I am a CSRS postal employee retiring at age 56 with 38 years of service. Can I withdraw from my Thrift Savings Plan without penalty? A. After you retire, yes.
Q. My previous employer allowed post-tax contributions to the 401(k) plan after the maximum allowed pretax contributions had been reached. Can I transfer the post-tax contributions of my previous employer’s 401(k) plan to the Roth TSP? A. No.