Q. When must I begin making my required minimum distribution? Since I turn 70-1/2 late in the month of April, I’m not sure about the requirement. A. If you’re separated from federal service, your first distribution, for tax year 2015, will be due by April 1, 2016. If you’re still working, then it won’t be due until after you retire.
Yearly Archives: 2014
Q. After filling out many beneficiary forms, I have found the standard beneficiary line to be Spouse, and then equal shares to offspring. This was my desired process anyhow. Does TSP have a similar beneficiary plan assuming no prior beneficiary designation?
Q. Are all TSP withdrawals subject to the 20-percent federal tax withholding, including full withdrawal by way of monthly payments? And is this done automatically when you set up your payout options with TSP or do you need to complete a form? A. Not all TSP withdrawals are subject to mandatory withholding. See the table on Page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for the rules. Mandatory and default withholding happens automatically. Anything else, you’ll have to request.
Q. I am 25 and just started my TSP and want to invest in a very risky fund. What would be best for risky? Or should I take a different approach or is risky fine for someone my age? I am a risk-taker in life.
Q. I am a FERS employee and plan to retire at age 56. Can I take a lump-sum withdrawal from my TSP to pay off my home? A. Yes, once you retire.
Historical investment returns seem to be the focus of most investors’ attention. What rate of return did the C Fund produce over the past month? The past year? The past five or 10 years? Visit any investment product website, and this is pretty much all you find. Historical data sliced, diced and cooked up in just about every way imaginable. And, the Thrift Savings Plan’s website is no exception. It is filled with an impressive assortment of historical performance data for the various investment funds it offers. Unfortunately, and most critically, there is nothing about the prospective — or expected…
Q. Since catch-up contributions must be renewed each year, is it possible to make non-payroll cash contributions? Or are all non-IRA rollovers required to be payroll contributions? A. You may not make direct contributions to your TSP account. The only way in is through payroll deferral or transfer from an eligible retirement account.
Q. I have 36 years of FERS service with retirement at MRA 56 and four months. If I wanted to take a partial withdrawal of TSP at retirement (early withdrawal, before 59.5), do I have to elect to do this immediately when I retire or could I wait a year and request this? A. You may wait as long as you like.
Q. I am going to separate from federal service on my MRA+10. I will be 56 with 25 years of service. Can I start taking money from my TSP at that time without penalty? A. Yes.
Q. I have a friend who resigned from civil service in 2004 (after 20+ years). He then took all his TSP fund, closed the account and rolled it over into an IRA. He will be 60 in 2014 and he heard that he might be able to collect a retirement pension from the federal government (GS-5) in 2016 when he is 62. Is he eligible for pension and is the retirement contributions and TSP the same? Since he took his TSP funding, will that make him ineligible to collect a pension? What is the retirement contribution?