Q. I understand there is a way to roll over a Thrift Savings Plan account to a Roth IRA so the funds transferred are not taxed. Can you point me to guidelines on how to do that? I am preparing to retire as a CSRS annuitant. A. This is only possible with a Roth TSP balance.
Yearly Archives: 2014
Q. I remember reading an article on ways to retire at eligibility of 56 years old and being able to draw my tsp before age 59½ without a penalty. Is there a way to do this? There is no disability involved in my retirement. A. Yes. If you retire from federal employment at age 56, you will be exempt from the early withdrawal penalty.
Q. I am a civilian FERS employee who will retire this summer at age 59 with 35 years of civil service. After retiring, I intend to start monthly withdrawals from my Thrift Savings Plan account ($2,000 per month). Even though I will have begun making monthly withdrawals from my TSP account, can the remainder of my money in the TSP continue to be invested in the various funds (G, C, F, S, I) and continue to grow via earnings within these funds? A. Yes.
Q. I’m about to retire at age 47 after 25 years as a federal law enforcement officer. I plan to roll my 401(k) (TSP) over to a traditional IRA and begin taking substantially equal periodic payments per 72(t) from the IRA, which, as I understand, once I start, I have to continue until age 59 ½. I plan to use the annuitization method to make equal monthly withdrawals, but I would like to take the first year’s withdrawal in a lump sum to help pay off some debt. Will the IRS allow that without the 10 percent penalty, or do I have to…
Q. I purchased the Thrift Savings Plan F Fund in September 2012 and, by Dec. 31, it had risen from 15.84 to 16.01, basically matching my expected returns. However, in 2013, it lost 1.63 percent of its value. It had never lost before in the 10-year listings of annual returns. How is it possible the lose money? Interest rates have been low for many years now and any 1- to 3-year bonds would have reflected these record low interest rates at bond purchase time. Why is the fund losing? A. When market interest rates rise, the value of existing bonds falls. If the…
Q. My agency, according to my W-2, overcontributed to my Thrift Savings Plan by $4 on the last pay period of the year. So, with total contributions, I have contributed $17,504 regular contributions and $5,500 in catch-up contributions for a total 2013 amount of $23,004. Is this a problem with the additional $4 being sent to my TSP account? If so, what do I have to do to fix it? Also, are there IRS penalties I am now responsible for due to my agency’s negligence? A. You may want to make sure that the TSP returns the $4 in overcontribution,…
Q. I retired from the Air Force Reserve last January and was transferred from Arizona to McChord Air Force Base, Wash. I also continue to work for the Defense Department. I plan on retiring as soon as possible from civil service. I contributed to a military Thrift Savings Plan and a civil service TSP. I cashed in both in December as I thought I was going to be able to retire this February. I planned to use the proceeds to purchase a home in Arizona. Now it looks like I have at least nine more months until I can retire. I spent some…
Q. I think I will be retiring Dec. 31, 2015 (under FERS) since my minimum retirement age is 56, and will reach it on Dec. 21, 2015. I will have 31½ years in federal civilian service. Can I start my Thrift Savings Plan monthly allotments right away (I have over $390,000 as a balance as of today) to supplement my 31 percent of salary from FERS retirement and special retirement supplement? A. Yes, you will be able to begin withdrawing from your TSP account as soon as TSP receives notice from your agency.
Q. I retired early with more than 20 years of service due to work-related injuries. I am 50. I have more than $314,000 in my Thrift Savings Plan. I want to withdraw either a partial or full amount but also want to avoid the 10 percent penalty tax. If I transfer my money to an IRA, then make a withdrawal, will I be able to avoid the penalty? What are my options? A. You should consult IRS Publication 590 for the exceptions to the early withdrawal penalty that apply to IRAs. See Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for…
Q. I am married, 60 years old and a FERS employee. I am not sure when I plan to retire, but I have a Thrift Savings Plan account and other investments. I would like to transfer as much as I can to the TSP account to have the best return. How will I be taxed on the money if it is going from one investment company to my account and then directly into TSP? Will it be taxable income for 2014 even if it was just a transfer? A. Transfers from a retirement plan account into the TSP are not taxable.