Q. I just read an article on IRS 72(t) and SEPP regarding withdrawal of funds from 401(k) (TSP) and IRA prior to age 59.5. I’ve never heard of this and haven’t seen it mentioned in your column either. Is there a specific amount of withdrawal I should be taking monthly according to IRS rules and calculations in order to avoid penalties? I retired at age 55 from the U.S. Postal Service on a VERA retirement (FERS) in March. I started withdrawal of TSP in May. Does this IRS 72(t) and SEPP apply to my situation? Will I be slapped with…
Q. I am a FERS employee with 33 years of service and will be eligible to retire at the end of the year when I turn 56. Upon retirement, I would like to keep my 401(k) money in my TSP account, but would like to take out approximately 4 percent per year in monthly payments. Would this be subject to the 10 percent IRS penalty for withdrawals before age 59 1/2?
Q. I plan to retire from federal service in about three years and start my TSP withdrawals then. My wife will continue working at that point; she has a 401(k)-like plan at her job that she contributes money to now. She also gets a fixed contribution from her employer, i.e., it does not depend on her contribution. Once I retire, should she continue contributing to her 401(k) or not? That is, she could keep contributing $X a year and I would end up taking $X more out of TSP. Or, she could stop contributing and I would take $X less out…
Q. My husband after 33 years of marriage has decided on a divorce. He is 63 and I am 61. He has a TSP. I will be receiving 50 percent as part of the divorce settlement. Will I have to pay tax on my share upon distribution or can I roll over my portion into an IRA? I do not have a 401(k). If I have to pay tax, would it benefit me and lower my tax penalty to take a portion over a series of years?
Q. I am 86 years old and going to retire in 2018. I want to know how much will I have to take out of my TSP account each month? My wife is 18 years younger than me; can this be used to lessen my required funds that I must take when I retire?
Q. I am retired from federal service (age 63) and have a part-time job. Do IRS rules allow me to contribute to an existing Roth IRA I have had since the 1990s (up to $6,500 a year) as long as my earned income exceeds $6,500? Can my wife (age 60) contribute to her Roth IRA up to $6,500 also, as long as my part-time income exceeds that combined total? Does the fact that the company I work part-time for has a 401(k) plan that I contribute minimum to just for the match matter?
Q. I am CSRS Offset. I withdrew my retirement funds years ago, and need to make a redeposit. I want to move money from my individual 401(k) to the Office of Personnel Management to make the redeposit. Will OPM report it to the IRS as a rollover, or will it be taxed as if I never re-deposited it?
Q. Is the TSP technically a 401(k)? I know all the same rules apply and, for example, when the contribution max or catch-up max goes up for 401(k)s, the TSP max also goes up, but I’ve never actually seen it referred to as a 401(k). If Congress changes the rules for 401(k)s as they are apparently considering, would the TSP rules also change, or would Congress have to address those separately?
Q: Because of the limited ability to withdraw TSP funds in a totally efficient manner for me, I am considering rolling my TSP account to Vanguard in two years when I retire. Vanguard provides the ability to withdraw Roth funds separate from 401k funds in any amounts I desire. As I understand, TSP requires withdraws to be equally prorated between 401k and Roth, based on the total balance. How does a TSP transfer occur … are the TSP Roth funds moved to a Vanguard rollover Roth fund and the TSP 401k funds placed in a taxable rollover account? It seems…