Q. I have a question regarding TSP. I live in Pennsylvania, and when I filed my taxes a few years back, I received feedback that the forms were incorrectly filled out. I am supposed to pay up-front and not when I draw it. I explained to them that it isn’t a Roth — it is a traditional TSP account. The response I got back basically say to pay it up front. If I retire and move to a different state, and start to draw my TSP, will that state legally be able to collect taxes as well? Would that not be double taxation. People at TSP said they don’t…
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Q. I am a FERS Federal employee, turned 60 last December, and have 20 years civilian service in a few days. I have an outstanding TSP general purpose loan with $37,000 balance. I had planned to keep working a few more years but my health won’t permit (no disability claims or anything). We used this loan to make a down payment on a home. I am trying to find out what the taxable distribution might be if I retire in July this year. TSP account (no Roth) has $193,000 now after the loan and I would like to see if…
Asset allocation is a term that should be familiar to anyone with a Thrift Savings Plan account. It’s everywhere in the investing world, but I have found that few investors understand what it is and what it is supposed to do. This is a serious problem since asset allocation is the main driver of investment performance. Study after study has shown that asset allocation overwhelms things like market timing and security selection in its impact on investment results. The TSP recognizes this and makes allocating your investment assets about as easy as it could be. Before you can use asset…
Q. I started making Roth TSP contributions in late 2012. I will be 70 years old in May 2017. I would like to roll over my Roth TSP into a Roth IRA before having to make any Required Minimum Distributions (RMD) from my TSP account. I think I will meet the 5-year rule for the Roth TSP on January 1, 2017. The year 2017 is also the year I turn 70 1/2, which, means, I think, that I must take a RMD of TSP funds in 2017. When should I do the rollover of the Roth TSP funds into a Roth IRA…
Q. My wife and I are both federal employees and recently took out TSP real estate loans to use toward the down payment of a home. She is seriously thinking about a career change and leaving federal service. I understand that the unpaid balance, and accrued interest, of the TSP loan will be due upon her separation from federal service. However, we do not have enough personal funds to repay the loan within the 90 days. I understand that TSP will issue a taxable distribution on the unpaid balance plus interest, and we will be liable for the tax and…
Q. I plan to retire in April 2016 under FERS with 31 years of service at age 58. I plan to begin a second career and don’t expect to take money from TSP until I reach my mid-60s. My current TSP balance is about $1.1 million. I have a rollover IRA from a former employer with a balance of about $90,000. Does it make sense to transfer this IRA to TSP?
Q. I retired CSRS Jan 2, 2015. I will receive more than $20,000 in leave lump sums. Is this considered earned income? Can I contribute to my TSP civilian account for year 2015?
Q. I am aware that I do NOT have to take a RMD from my TSP if I am still working full time as a Fed beyond age 70. My Fed colleague and I would like to “Job Share”, with each of us working twenty hours per week after age 70. Will the IRS let me take only half what my RMD would have been had I retired full time? I don’t need the distribution money and prefer to leave as much as possible in the TSP.
Q. I am a FERS retiree and following your advice, I have not touched my TSP. This year I must start Required Minimum Distributions and am thinking of having TSP to buy an annuity. The news says “the Fed” may raise rates soon. Will that raise the TSP Annuity Interest Rate?
Q. Will TSP allow me to purchase one annuity from MetLife and a second annuity from a different provider? The state I live in only insures annuities up to $250,000 and I’d like the remainder of my TSP balance to be insured by purchasing a second annuity from a different provider. Are there any strategies I could employ to accomplish my goal of insuring the entire TSP balance that I’d like to use to purchase these annuities?