Q. Can you roll an existing Roth IRA into you Roth TSP fund? A. No.
Monthly Archives: June, 2014
Q. I retired a few years ago under the VSIP/VERA program under the MRA +13 years of government service. Can I take a withdrawal of my TSP funds out before I turn 59½? If so, what are the tax penalties and is there a 20 percent federal income tax I have to pay ? Also, is this income that will be reported on my federal and state taxes for that year? A. Your questions are too complicated for a simple answer, since they depend upon circumstances not explained in your message. You’ll find the information you need in the notice…
Q. Upon retirement, I want to take a mixed withdrawal. I would like to take partial withdrawal ($50,000), sign up for monthly withdrawals, and possibly buy a TSP annuity. Is it possible to hold off buying the annuity when the interest rate is better? I was under the impression that one had to make and take all of these options up front. Otherwise, you lock yourself out of making/buying any other options TSP withdrawal has to offer. A. Once you begin a full withdrawal, you lose the option to buy a TSP annuity at a later date.
Q. I understand TSP withdrawals will be taxed as regular income come tax time. However, when one takes/chooses monthly TSP payments upon retirement, are taxes taken out of these payments? In other words, when I run the TSP calculator, understanding it is only an estimate, can I expect these payments to be lower due to taxes being taken out?
Q. I Have $400,000 in the TSP at age 53. I am out of the government and I want to start SEPP. I have run 72t computations with single life expectancy option at 31.4 years, and the fed mid-rate interest, no more than 120 percent (using 1.5 percent in the computation, to be conservative and stay out of trouble). No problem on the five year or 59-1/2 requirement. After consulting with a CPA for the SEPP, we’re almost good to go, except for one question. Does the TSP calculate my monthly SEPP payment? Can they be relied on to do…
Q. I am almost 57-1/2 years old, and I have more than 30 years with the Defense Department. Can I roll my TSP into a self-directed IRA now without retiring or quitting? I want control over where it is and how it grows, and I am concerned about the government taking it to pay its debts before I can remove it normally at 59-1/2. A. No.
Q. I will be 57 in June 2022, meeting the criteria of MRA +30 years creditable service. If I postpone retirement to age 62 for 1.1 percent multiplier, will I be able to access my TSP funds in the meantime; i.e. at age 57 until retirement at age 62? A. Once you’ve retired; yes.
As a Thrift Savings Plan investor, what should you worry about? You might be surprised that my list doesn’t include whether to contribute to the Roth or traditional accounts, or that you’ll have to begin taking distributions someday, if you aren’t already. Here is my list of things worth worrying about: Political meddling. The greatest threat to the TSP, as an institution, comes from members of Congress. The TSP contains nearly $400 billion. It’s the juiciest single profit target for the financial services industry. So far, they’ve had to go after it one retired investor at a time, but they…
Q. I’m 53 with 30 years of government service. I’m invested at 15 percent to TSP. Looking at my account, I feel I am not going to have enough money in my TSP to retire comfortably. I have 6-1/2 years until I can retire without penalty to TSP. What can I do to maximize my investment? A. I suggest that you contribute as much as you can and direct all of your current and future investments to the L Fund that most closely corresponds to your life expectancy. If you’d like more certainty in predicting and producing the outcome of…
Q. I’m 53 years young with 30 years of government service. I’m invested at 15% to TSP. Looking at my account, I feel I am not going to have enough money in my TSP to retire comfortably. I have 6.5 years till I can retire without penalty to TSP. What can I do to maximize my investment (or get the most bang for my buck)?