Q. Can I withdraw money from my IRA in December and have it applied to my 2014 required minimum distribution? A. No.
Author Mike Miles
Mike Miles
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.
Q. I have a Vanguard 500 Traditional IRA and Roth IRA. Can I transfer these funds into my Thrift Savings Plan? If yes, what forms should I use to make this transfer? A. You may transfer your IRA money into your TSP account, if it is all pretax money, using Form TSP-60. You may not move your Roth IRA money into the TSP.
Q. I am retiring in the near future and I want to take my Thrift Savings Plan balance which is approximately $175,000 to $180,000 and purchase an annuity from MetLife. My concern is if MetLife were to fold. I think my state (Massachusetts) will insure me up to $100,000 in that event. I believe that is per insurance company. So would it be wise to split that total ($175,000-$180,000) and purchase an annuity from two different companies, so as not to exceed the 100,000 limit? A. I’m not confirming your statements about the limits of protection in a particular state,…
Q. Can the money in my Thrift Savings Plan account be lost if I am sued? A. I’m not an attorney, but as I understand it, the answer depends upon the state and the nature of the suit. Check with an attorney for advice.
Q. In Reg Jones’ column, he states, “Choosing to buy an insurance policy instead of a survivor annuity is seldom a good idea. Could you please expand on that thought? The financial planner I talked to, who also sells insurance, says if you are healthy, the insurance route will be cheaper to pay for and more lucrative in the end. If you plan on dying young, the survivor annuity is best. A. This is a complex decision, and you should proceed with care since it is irreversible once it’s made. The simple answer is “guarantees.” The federal survivor annuity is the…
Q. I am almost 47 years old and have applied for disability retirement from my federal job. I have 27 years of federal service and am covered under FERS. It was my understanding that upon disability retirement, I will not be able to contribute to my Thrift Savings Plan account any longer and the funds would basically sit in TSP until I’m 59½ years old. For that reason, I’m considering rolling over my TSP to a traditional IRA, in which I can then make contributions to until I reach 59½. I’d like to know why leaving the funds with TSP would…
Q. I’m 68 years old (under FERS) and have a Roth IRA that’s external to the Thrift Savings Plan and has been open and funded for more than 10 years. I started contributing to my TSP Roth IRA this year. When I retire in 2015, I want to be able to roll over my TSP Roth IRA into my external Roth IRA without any tax consequences. I understand that I’ve clearly met the age requirement (older than 59½), but I want to make sure I also meet the five-year rule. Does the five-year rule apply to the time that funds were…
Q. I contribute 5 percent to my Thrift Savings Plan, ensuring that I get the full matching. I would like to contribute more to my retirement and am not sure whether to increase my TSP contributions or contribute to my IRA. Aside from the low overhead of the TSP, are there any fundamental differences between contributing to either one? Are there other particular benefits to investing in the TSP or the IRA that I should take into account? A. The TSP’s low cost and the availability of the G Fund make it the best retirement investment vehicle you’ll find. Without a good reason…
Q. I have to retire in 18 months. I plan on taking a lump sum and monthly allotment from my Thrift Savings Plan at retirement. I understand both of these will be taxed at 20 percent. I am thinking of taking a TSP loan for the amount I had planned on requesting as my lump sum prior to my retirement date, with the understanding that I won’t have the time to pay it back in full and that the amount I don’t pay back will be considered disbursed income. My reasoning is that having the funds now will allow me to…
Q. If I have Thrift Savings Plan funds in both G and C funds when I am required to begin taking required minimum distributions at age 70½, can I specify which funds the RMD are taken from? (My concern is that the C Fund may be at a low due to market conditions, and withdrawals may be better to defer till the market improves.) A. TSP distributions are always taken proportionately from your various holdings at the time. I don’t see the rationale for your concern, though. Your account will be allocated exactly as it was before the withdrawal. If…