Q. I plan on using a partial withdrawal to pay off my mortgage so I will retire mortgage free. I plan on transferring the money to the bank that I will be paying the mortgage off. Will I have to pay the IRS money later since I am not rolling this money to a traditional Roth IRA? What form should I use to transfer the money to the bank? I have a checking account there. I had thought since this is my money that it would not be hard, but I am getting confused. I am 62 years old and have 31 years of federal service. I am FERS and plan on retiring near the end of 2014.
A. Use form TSP-77 to request a partial, lump sum withdrawal from your TSP account. I can’t determine whether you’ll owe any tax on the withdrawal without more information. I suggest that you read the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf and then, if necessary, consult a qualified tax adviser before you proceed with your plan.
