Q. I’m a CSRS retiree, age 66, and I want to withdraw a portion of my TSP savings to pay off a mortgage. Can I do this? If so, what are the tax implications or any future limitations that I may not be aware of?
Q. I am a FERS employee with the U.S. Postal Service. I plan on leaving this summer when I’m 58. I have read that I can be less than 59½ years old to withdraw from TSP and not be penalized for early withdrawal, as long as I am completely separated from USPS. Is this true? Also, along with my pension, I plan on with drawing about $1,200 per month from my TSP. Will I be taxed less by taking out monthly amounts than if I took out the entire amount?
Q. I have been considering moving TSP money into the G Fund to have it exempt from New Jersey state income tax. My search for an answer leaves me with confusing information regarding exemption from state tax which talks about “direct” obligations and qualified mutual funds which invest in federal obligations and bonds. To summarize: Since savings bonds, etc. are exempt from state tax, and the G Fund is made up entirely of federal obligations, couldn’t that fund be exempt?
Q. I received a check for my retirement from American Funds, and they had taken out federal income tax, so I received the net check. The check was dated Dec. 30, 2016, but I just received this check Jan. 12, 2017. My husband and I still file taxes, and I am 69½ years old. Do I have to show the net check on our 2016 income tax returns or do I show this on our 2017 taxes?
Q. I’m retired, and for 2017, I increased the amount I’m taking out in monthly TSP withdrawals. I received a letter today from TSP acknowledging my payment had increased, the correct amount and the number of months these payments are expected to last. The letter went on to say if my payments are expected to last less than 120 months, they’re considered eligible rollover distributions, not periodic payment for tax purposes. I really don’t know what this means, but somehow I suspect it means I’ll pay more in taxes. Can you shed light on this?
Q. I inherited part of a TSP account and got a check, with tax already withheld. Do I still have to pay state tax as well? I’m from Pennsylvania, and the TSP account is from my uncle who lived in Florida.
Q. I heard that if you have a Roth TSP and make withdrawals before 59½, the exception under the Defending Public Safety Employees’ Retirement Act does not apply to the earnings portion of the Roth TSP. (I know if you transfer money to a an outside Traditional IRA or Roth IRA, you lose exception). I am a federal agent who qualifies as a public safety employee, and I’m retiring at age 56. I have money in both a traditional TSP and Roth TSP. I plan to start withdrawing upon retirement. Will I be penalized for having a Roth TSP?
Q. I plan on retiring next August at 57 years old. I would like to buy an immediate annuity but do not want to buy the MetLife FERS annuity. Their interest rates for the annuity are extremely low compared to other annuities. When I retire at 57 years old, can I buy another annuity and avoid paying 20 percent upfront tax when buying that annuity? Also, can I get my payments without the 10 percent penalty for not being 59½?