Q: I will be retiring at the end of March 2011. I plan to roll over my TSP to an IRA. Can I roll it over before I retire? If not, how long does it takes to roll over to an IRA after I submit the form? A: If you have reached 59 1/2 and have not already done so, you may take an in-service withdrawal and roll it over to an IRA. Otherwise, you will have to wait until you retire to roll over your account. I can’t tell you exactly how long the process will take, but I…
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 turn 56 in December and I am retiring from the federal government. I would like to take the lump sum out of my TSP to buy a house. If I wait until my separation date of Dec. 7, I won’t get paid until January 2011. The Bush tax cuts expire at the end of December this year. Can I cash out my TSP a few months before to my last day without penalty because the cash out and retirement are in the same year and only a few months apart? Or must I wait until my actual separation…
Q: I just got discharged from the Navy. I was told to look online to find out how to move my money out of TSP but I’m having trouble finding this information. A: Visit www.tsp.gov.
Q: I retired from federal service on Jan. 3, 2008. With accumulated sick leave I had about 42 years of service. I was 67 years old when I retired. I had been investing in TSP on a regular basis. When I retired I left my funds in TSP. I will turn 70 on Sept. 12. Am I required to withdraw the funds when I turn 70? I have heard from a financial adviser group that former federal employees with TSP must move their funds into either a lump sum withdrawl or an annuity when they reach 70. Is this true?…
Q: I contribute to TSP. I am a little confused about the maximum amount per year. It’s $16,500 for 2010. I contribute 15 percent to TSP and have been doing so for some time. My understanding is that I should have been doing the math and updating my TSP deposit amount over 26 pay periods of the year. I have not done this for a while but want to get back on track. My problem is that I’m not sure how to maximize. Is it as easy as dividing 16,500 by 26 pay periods? I don’t understand what that would…
Q. I am under the FERS program. Is the matching fund from the government included in my TSP balance now or will it be added when I retire? A. It’s being deposited as you go.
Q. A rumor is going around at work telling everyone to get their money out of the G Fund because the government is going to borrow from it and won’t be able to repay. They said that it almost happened once in the 90s and could happen again real soon, so people should avoid G altogether because, although it has the least risk, it’s not safe from the government getting to it. Sounds like another vicious rumor; what do you think? A. I agree — an unfounded rumor.
Q: Can a TSP annuity be purchased at any age upon separation from service? A: Yes.
Q: I will be 59 in October 2010. I retired about four years ago under the old CSRS system and contributed to the TSP while I was employed as a federal civil servant with the Navy. What is the earliest age I can withdraw from the TSP without penalty? I see information on being required to withdraw by the age of 70 1/2 but nothing on the earliest age to withdraw. A: If you separated from federal service during or after the calendar year in which you reached age 55, you may withdraw your money now without penalty. Otherwise, you’ll…
Q: You say, “If you are still employed, you will not be required to begin distributions from your TSP account until you retire.” Does that mean that contributions to the TSP can continue indefinitely after age 70 1/2 as long as you are working? A: Yes.