Q. Federal employee age 58, retiring with 30 years’ service and would like to take $109K from my non-Roth TSP to pay off mortgage. Besides Federal tax, would I also have to pay a 10 % penalty because I am not 59 1/2 years old? Would the federal withhold 20 % tor taxes or would it be more?
Monthly Archives: June, 2014
Q. I’ve looked through the various combinations of possibilities on your web page (very helpful, thank you), but have not seen my exact question answered. I am having financial difficulties. I am 57 years old with 20 years of service and don’t plan on retiring for at least 5 years. What I would like to do is take out a TSP loan, then when I turn 59 ½ take an age-based disbursement for enough to pay back the balance of the loan and have some money left over. Can I do it that way? Or would I be required to…
Q. I will be retiring on 01/02/2015. I am a CSRS employee and would like to put my unused annual leave lump sum payment into my TSP account when I receive it in calendar year 2015. My agency HR Representative told me there is a way to complete this transaction, but was unable to tell me how this process works. She directed me to TSP for assistance, but they could not help me. The TSP Representative stated I should engage a tax accountant to disposition my unused annual leave lump sum payment. Could you please clarify what is actually permitted?
Q. I plan on retiring in August with 31 years FERS service at MRA. I have an outstanding loan of $15,000. I know they will report it as income earned. Will I have to pay a penalty since I will only be 56 on the balance I owe?
Q. I am 57 with 20 years of service and don’t plan on retiring for at least 5 years. I would like to take out a TSP loan, then when I turn 59½ take an age-based disbursement for enough to pay back the balance of the loan and have some money left over. Can I do it that way? Or would I be required to pay off the loan before getting an age-based disbursement? I would think they would just deduct the amount of money I still owe from the disbursement. For example, say I took out a $50,000 loan…
Q. I have applied for FERS Disability Retirement and am 52 years old. To relocate my family, I will have a need for a withdrawal from my TSP. Will I be subject to the 10-percent penalty on early withdrawals, and how long would it normally take to receive my withdrawal?
Q. Can you roll an existing Roth IRA into your Roth TSP fund? A. No.
Q. I’ve been reading your Q&A as well as information on tsp.gov and still do not have a full understanding of my dilemma. I have about $225,000 in TSP and would like to use it to supplement my CSRS pension when I retire at age 56. I’m confused about what happens to my balance once I start the monthly payments option. Would I continue to receive earnings on the the remaining balance at its current distribution? Can I change the distribution in the future? If not, would I be better off rolling TSP over to an IRA somewhere?
Q. I’m a federal employee aged 58 retiring with 30 years’ service, and I would like to take 109,000 from my non-Roth TSP to pay off mortgage. Besides federal tax, would I also have to pay a 10 percent penalty because I am not 59 1/2 years old? Would the federal government withhold 20 percent penalty or taxes or would it be more? A. There will be mandatory withholding of 20 percent, but the early withdrawal penalty will not be assessed. Details are available at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
Q. I’m a Federal Technician (military employment required) employee age 55 with 37 years of service. I’m going to take a VERA and leave with 37 years 7 months on Aug. 31. I turn 56 in January 2015. I will receive a substantial military retirement check at age 60 and won’t need my TSP income at that point. I want to use my entire $113,000 TSP using a 72t starting at age 55 and going for 5 years until I’m 60. Can I use the entire TSP amount or will I be forced to only get the small payments using the life expectancy…