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 in September 2018 at the age of 58. Does it make sense to withdraw the max amount from TSP annually and remain in the 12 percent tax bracket or just take the minimum I need and pay more on taxes when I turn 70 and start drawing Social Security and required minimum distribution? If I choose option 1, I would probably invest the extra somewhere.
Q. The state of Hawaii does not tax social security and government pensions and annuities. If I purchase an annuity through TSP with my TSP balance when I retire and begin receiving lifetime income, is this considered a “government annuity” and therefore not subject to Hawaii state income tax?
Q. I have 29 1/2 years in with the U.S. Postal Service. In February 2011, it will be 30 years and I will be 55. Can I withdraw all my TSP contributions then or do I have to wait to be a certain age? Also, is it taxed then? Any early penalties?
Q. My RMD for 2016 was withdrawn March 2017 and my RMD for 2017 was withdrawn in April and December 2017. My 1099-R reports the total of the RMDs with no distinction for how much was for 2016 and for 2017. Am I supposed to use Form 8606 for the TSP RMD? Form 8606 asks for the value of the IRA on Dec. 31, but I have two values (one for 2016 and one for 2017). Also, if TSP is not an IRA, what is it? Is there another form to put this info?
Q. I live in the state of Massachusetts and am receiving survivor annuity benefits. I am having taxes taken out of my benefits each month. Are benefits for federal CRS deceased employees’ spouses suppose to subject to taxes or are benefits tax free?
Q. I plan on retiring from 33 years of federal service with the Department of Defense. I have $1 million in my TSP and want to convert some of it each year to a Roth account. After retiring, I expect my taxable income to be about $100,000 per year. After retiring, if I transfer $50,000 per year from my TSP to a Roth account, what will my tax rate be? Note: I’m assuming the federal tax rate between $77,000 and $165,000 is 22 percent, for over $600,000 is 37%. Would I be taxed 22 percent on the $50,000, since $100,000 +…
Q. I am a federal dual-status technician with the LA guard. I am 50 as of March 2018 and will have 28 years federal technician time on Sept. 22, 2018. Can I voluntarily retire and draw my FERS retirement, the supplement and my TSP without being penalized the 10 percent? My actual minimum retirement age is 56 years and 8 months.
Q. I retired from the United States Postal Service at 65 and have a one-time/full withdrawal of my TSP that has a withholding of 20 percent. Is the amount I received still subject to tax for next year’s return and how much?