Q. I deposited a little money into my Thrift Savings Plan, tax free, about five years ago, when I was in the military serving in Iraq. Since this money is in effect post tax, would it be possible to transfer it from my traditional TSP account to a Roth TSP account, thus allowing it to accrue tax-free interest? A. It is possible. Consult a competent tax adviser for advice about if, when and how you should do it.
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 am planning on rolling over my voluntary contributions account in the very near future. Can I roll my contributions to the new Roth Thrift Savings Plan once it is operational? I understand that any earnings I have from my VC account can roll over to my regular TSP account. A. Based on the guidance provided by the TSP so far, this should be possible. We’ll have to see how things develop to be sure.
Q. Will retirees be able to roll over funds from the Roth TSP option into a Roth IRA, even if we exceed the income limits for a Roth IRA? A. Yes, you will.
Q. I worked for DoDDS schools from 1987 to 1990. At that time, vesting was five years with FERS. When I resigned, I believe I had to forfeit my retirement and was made to withdraw my Thrift Savings Plan. Would this have been correct for that time period with FERS? And DoDDS? I came back to work for DoDEA in January 2001. I called to make certain that I was going to get credit for those three years. I wanted to redeposit my TSP money but was not allowed to, and was told there was no provision for repayment. It…
Q. Is there any way of structuring an annuity purchased through the Thrift Savings Plan into a qualified longevity annuity contract? A. Since, under the proposed regulation, this would require the purchase of a deferred annuity contract and the TSP does not offer such a contract, this is not possible.
Q. I have worked for the Postal Service for 24 years as postmaster. I would be able to take an early-out offer. I want to borrow on my Thrift Savings Plan for a residential loan. If I do a 10-year loan from my part of the TSP next month and then they offer early retirement and I take it, will I still have to continue making the payments? Also, when I retire, will I be able to pull out all my savings in TSP? A. If you retire, your outstanding TSP loan will become due. If you don’t repay it…
Q. I have worked for the Postal Service for 24 years as a postmaster. I would be able to take an early out if it was offered. I want to borrow on my TSP for a residential loan. If I make a 10-year loan from my part of the TSP next month and then the Postal Service offers an early-out retirement and I take it, will I have to continue making the payments? Also, when I do retire, will I be able to pull out all my savings in TSP? A. If you retire, your outstanding TSP loan will become…
Q. I am a federal employee and I have a TSP account from which I am trying to take out a residential loan. So far I have faxed in my information four times and I am told every time that a different page is unreadable. The issue is I have sent each fax from a different fax machine and there is an issue every time. I would like to follow a complaint, but the thrift line is no help. How would I go about filing a formal complaint? A. The Federal Thrift Retirement Investment Board administers the TSP. You can…
Q. I left federal service and have $4,019.42 in my TSP account. I requested a full withdrawal. Will I get the full amount less the 10 to 20 percent that is with held for taxes? A. Your payment will be subject to 20 percent mandatory tax withholding.
Q. I read your article that Traditional IRA funds can be transferred to the TSP either before or after a person’s retirement. My question is, can I transfer SEP IRA funds into TSP after retirement also? How about 401K-SOLO? A. Yes and yes.