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.
Q. I am my sister’s beneficiary for her TSP account. She recently passed away. I am retired and taking RMD on my IRA, 203B’s, etc. Is it possible to add the TSP funds to my IRA or must I take a lump amount and pay taxes on that amount immediately?
Q. I’ve been reading that the TSP is terrific for accumulating funds for retirement, but not so good when it comes time for withdrawal options when the time comes to tap my account. Do you agree with this? And would I be better off rolling over a portion of my TSP into a private IRA-type account so that I can more easily manage my account and withdrawals, for example, where the monthly distributions come from (because of the TSP proportional distribution rule, for example)?
Q. I understand the lump-sum annual leave payment at retirement cannot be put into the TSP for deferred tax or matching purposes. However, can you elect to defer to receive the lump-sum payment until the following calendar year, such that it counts as earned income in that following year rather than the year you retire? If nothing else, it would at least count as earned income on the basis of which I can make another year’s worth of contributions to my brokerage Roths.
Q. Although we are not there yet, it seems the expense ratio gap between the Thrift Savings Plan and Vanguard is continuing to narrow. Vanguard recently lowered its expense ratios considerably on many of its funds. Admiral Share-class expense ratios on some funds are within a whisker of being the same as TSP. Do you think that a firm like Vanguard can now offer advantages to individuals who want to roll over their TSP balances to them? At the very least, it should serve as a wake-up call to BlackRock and TSP management that they need to not let the…
Q. I plan to retire May 31, 2017, at 51 years old. I am a federal law enforcement employee eligible to retire at age 50 (I have 22½ years as a law enforcement officer and 26 total years). I need to access my TSP immediately to pay emergency expenses. If I request a hardship withdrawal prior to my retirement date, will I be subject to the 10 percent early withdrawal penalty?
Correction: A previous version of this post misidentified the the tax-exemption characteristic of a Traditional IRA. This post has since been corrected to explain a Traditional IRA is not tax-exempt. Q. I’m retiring at 50 years of age after 22 years in federal law enforcement. I’m considering withdrawing all my TSP funds to a financial institution under a tax-exempt traditional IRA. I understand there’s no federal tax liability; however, I reside in the state of California. Is there a state tax liability for the withdrawal?
Q. I have recently retired from the U.S. Postal Service under CSRS. I had been contributing the maximum amount toward my TSP. When I left, I received my balance of annual leave in a lump payment. I am rolling my TSP over to a Fidelity account to have more choices with regard to withdrawal options. Since the money from annual leave pay is treated as earnings, can I place some of it in the IRA account?