Purchasing a QLAC with TSP money


Q. Could a retired federal employee transfer funds out of TSP into an IRA near the end of one year, then buy a QLAC at the beginning of the next year with 25 percent of the funds in the IRA, and then transfer the remaining balance of the IRA money back into the TSP? If so, this would be a way to use TSP money to purchase a QLAC, thus reducing the minimum required distributions from the TSP account.

A. As long as you don’t close (empty) your TSP account, you may transfer pretax IRA money into it, even if that money came into the IRA from the TSP. What you do with the money while it’s in the IRA is up to you and your tax accountant or attorney.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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