Q. I retired 2+ years ago under FERS with a substantial TSP account that I have not touched. I am looking at purchasing an annuity through TSP versus regular payments based on life expectancy (essentially the IRS required minimum withdrawals that I must start next year). I understand how the RMD is taxed. How will the annuity be taxed? Is there a source that explains the calculation?
Yearly Archives: 2014
Q. Hello, I’m a CSRS Special Agent that is planning to retire on Jan. 2, 2015. I also have been contributing to the Thrift Savings Plan. During a retirement seminar we were told that as law enforcement officers, we are allowed a one-time-only withdrawal from our 401(k), as long as we are 50 and older. We were also told that we are subject to income tax; however, we are exempt from the 10 percent early withdrawal penalty. Is this correct? Please advise.
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…
Q. I owe $25,000 military deposit. I have $30,000 in a Roth IRA. Can I transfer the money from the Roth IRA to the FERS basic benefit without incurring a penalty?
Q. I’ve got about $340,000 in C, S and I Funds. I have contributed regularly for past 13 years into just the C, S and I. I have $145,000 from a non-TSP balanced fund that I just cashed out of, so I could roll into TSP. Should I roll it all into G fund based upon the current market outlook? My guess is that stock funds are pretty much peaked out and will drop significantly. Might be the one chance I’d want to take at trying to time the market. The plan would be to transfer out of the G…
Q. I am 55 years old planning to retire under CSRS in the next year. I currently have approximately $200,000 in TSP using my own distribution choices rather than an L Fund. Although my distribution selection falls between the L 2020 and L 2040 Funds, I am considering movement to an L Fund once I retire. If I understand the TSP descriptions correctly, they suggest I use the L Fund closest to my retirement year (L 2020), but my thought is that I can afford to be a little more aggressive considering I will be receiving a decent pension ($70,000).…
Q. I have three IRA accounts and I turned 70 in March. Do I combine the three to figure the required withdrawal? What would the tax be if I do a lump-sum withdrawal from all three? A. You must obey the aggregations rules for calculating your IRA RMD spelled out in IRS Publication 590. The taxable portion of each withdrawal will be added to your tax return as ordinary income for the year, where the tax you owe on the withdrawal will be calculated. Whoever prepares your tax return for the year of the withdrawal is responsible for making sure…
Q. I am 50 and I retired as a firefighter (Special Category) on Dec. 31, 2013, with 25 years and 10 months of service. I want to withdraw my TSP but I’m being told by TSP that they withhold 20 percent for taxes and my accountant is telling me that I will have to pay 10 percent for a penalty because I retired early. I looked into the IRS publications 575 and 721 and they state I don’t get charged a penalty.
Q. Is there a way I can get federal taxes deducted from my TSP withdrawals. I am currently receiving a monthly payment. A. Yes. Use form TSP-78: https://www.tsp.gov/PDF/formspubs/tsp-78.pdf.
Q. I retired nine months ago after 35 years of federal service. I am a CSRS annuitant. I am unsure of the best avenue to take regarding the opportunity to withdraw all or some of my TSP when I am 59-1/2 (I will be 56 in August). Like any investor, I am worried about the repeat of the 2008 stock market failure. I am considering withdrawing half of the balance and moving it into my money market account and converting the balance into a lifetime annuity.