Browsing: Tax

Q. I retired after 26 years of active military service at the age of 52. I’m now 61 years old. I would like to withdraw all the funds in my TSP account for use in various home improvement projects. Am I subject to a 20 percent income tax and 10 percent early withdrawal penalties?

Q. I am 69 years old and will be 70 in November. I haven’t received notice that I have to withdraw money — or how much for that matter — from my TSP. I am still working as a military civilian, and I don’t plan to retire anytime soon, as my TSP only has $54,000 — not enough to retire on. When I receive notice after my 70th birthday, will it be before the end of 2016 when I turn 70? Should I plan to begin the withdrawals before the end of 2016? And with my Social Security, I am now in the 25…

Q. I retired April 30, 2016, under FERS law enforcement and was considering taking a one-time, partial withdrawal to pay off our mortgage and complete some home improvements. The withdrawal would be substantial — in the $400,000 range. Is there any advantage or disadvantage in withdrawing the money now or is it better to wait until the following year? My wife and I are uncertain if we would be taxed beyond our current rate and if the withdrawal is viewed by the IRS as “income” for purposes of filing at the end of 2016.

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…

Q. I understand that I can take a TSP loan just prior to retirement, not pay it and have it become a taxable distribution after 90 days. If the 90 days fall after the first of the year, will the tax be on the new year income or at the time of the loan? I’m a rehired annuitant, if that matters.

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