Browsing: Roth TSP

Q. I recently retired and would like to start taking monthly payments from my TSP account. Unfortunately, in 2013 I started putting a small portion of my contributions into the Roth option. This money will not pass the five-year test until 2018. There isn’t much money there, but I don’t want the hassle of figuring out the tax penalty and would prefer to grow the Roth in a separate account. I called TSP and got no help figuring out options. I read your solution about transferring almost all of the account out of the TSP, separating them, then transferring back the…

Q. Is it possible to roll over just my Roth TSP account to a IRA and leave the non-Roth account in TSP? The big drawback that I see in the Roth TSP is not being able to direct it separately from the non-Roth account. What is your take on this issue, and is there any way to work around it?

Q. I plan on retiring Dec. 31, 2017. I will be 56 years old — my minimum retirement age — with 33½ years of service. I’m employed in a covered law enforcement position (DHS-CBP). My current TSP balance is approximately $465,000, and I only contribute to the basic TSP, not the TSP Roth. I would like to take a partial ($100,000) at retirement to pay off my house and also take a monthly set amount. Can I do both? Would I be subject to any early withdrawal penalty (under age 59½) on the partial $100,000 that I would use to pay off…

Q. I’m a Defense Department employee looking to retire in 2019. I attended an Air Force retirement seminar today; I’m not an Air Force employee, but they they allow Defense Logistics Agency employees to attend. The young man presenting the TSP training informed us that we could not or should not transfer funds from our TSP into a Roth IRA when retiring. He said I would incur a large tax that must be paid out of pocket not from my TSP transfer. He provided us with several option for TSP: full withdrawal. an annuity. a TSP monthly payout. an IRA rollover. He said the…

The Department of Labor recently enacted a rule requiring that “advisers” — meaning investment and insurance sales people — who offer “advice” to participants about their retirement accounts act as fiduciaries and accept the responsibility and liability that goes along with that role. In simple terms, this means that anyone who tells you to do something — anything — with your Thrift Savings Plan money, is obligated to put your interests ahead of all others. This poses a rather unpleasant problem for the “financial services” industry, which has built a massive profit generating machine upon a foundation that includes, as…

Q. I have read several of the Money Matters articles regarding the fact that the SEP IRA can be transferred into the TSP. However, when I looked at the TSP 60 Form, Section II, Block 13, it lists a Traditional IRA, SIMPLE IRA and Eligible Employer Plan as choices for transfer to the TSP. If a person has an SEP IRA to transfer to the TSP, would they select the SIMPLE IRA or Eligible Employer Plan for this situation? Would the person need to explain to the TSP in an attachment that it is an SEP IRA transfer?

Q. I have been investing in the traditional TSP during my entire career. I have approximately $585,000 in my account and plan to retire at 62 years old in 5 years from now. I’m contemplating changing my investments from the traditional to the Roth in order to lessen the tax burden later on in retirement when required minimum distributions kick in. My wife is self-employed and has been funding a Roth annually for the past 10 years. I began funding a Roth last year and we both plan to continue to fund a Roth for the next 5 years. Do you…