Q. My concern was that I took all my money out of the TSP when I left the government in 1989 and then came back years later, in 2004. Does that affect my date of eligibility (SCD for retirement)? Related question: Will I be considered to have worked at this point (as of March 2014) 25 months (old service) plus now about 10 years, so about 12 years total, or only 10 years (my current service beginning in 2004)? Also, when my FERS annuity is figured, is that on 10 years or 12 years? Finally, am I currently eligible to…
Monthly Archives: May, 2014
Q. If a Thrift Savings Plan in-service withdrawal is used to purchase rental (investment) property, are federal taxes on the TSP in-service withdrawal deferred until the rental property is sold? A. No. The withdrawal will be considered ordinary income in the year it is distributed.
Q. I have funds in my TSP account, turn 70 ½ in 2015, and have recently been furloughed from federal service but have not resigned or been separated. I am eligible to return in 2015. I understand that if I return to federal service in 2015 without separating, I can resume TSP contributions and do not need to take RMD until I separate. However, I understand that if I am separated from federal service in 2015 and do not choose either an annuity or a monthly distribution plan, I must accept full distribution. In that case, can I call the…
Q. I have two years of temporary services. What are the pros and cons of buying back the temp time? I am approaching my 27th year of federal service. I came in under FERS; at what age can I retire and get my TSP monies without being penalized? A. You may avoid the early withdrawal penalty on TSP distributions at any age if you meet one of the exemptions listed on page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. One of these exemptions is for those who retire during or after the calendar year in which they reach age 55.
Q. I am eligible to buy 12 years of military service credit for my civil service retirement. I am curious if I can take a 401(k) from a previous job and roll it over into the FERS system without a tax penalty. Can you help me with this? A. You may not.
Q. I am a single 24-year-old in the Army Reserve. I am interested in contributing to one of the two TSPs and wanted to know which would be the better route? I also have a 401(k) at my civilian job and contribute 6 percent to their 4 percent they match. I plan on working until I am at least 65. I am aware it is a broad question, but any information would be helpful. A. It’s impossible to say which will work out better for you. It will likely matter far more that you save the money, than which account…
Q. A friend is close to being 59 1/2 and is seeking to either take a loan from his Thrift Savings Plan or make an in-service withdrawal. Does an in-service withdrawal count as one of the two that he can make once in retirement? Or long as he works will he still have two left for when he starts retirement? A. An age-based in-service withdrawal counts as his single lifetime partial withdrawal.
Q. I turned 71 on 3 Feb. 3, 2014. I have not taken anything out of my TSP. I am still working, but not for much longer. Will I have to make two RMDs in 2014? Am I subject to any penalties as I stand now? A. Since you were working, there was no RMD due for 2013. Your first RMD, for 2014, will be due by April 1, 2015. Your second RMD, for 2015, will be due by Dec. 31, 2015. You may take the first RMD, after you retire, in either 2014 or 2015, or split between both. You’ll find more…