Q. What agency would I need to seek remedy on requesting a TSP withdrawal with paying no federal tax and the IRS withdrawal penalty? I am a 58-year-old FERS employee with four years to go before I can retire. I can get a TSP withdrawal at age 59½ years old without paying the IRS penalty, but I need the money now due to immediate financial needs, including not paying the federal/state taxes and penalty. A. Since you are currently eligible to contribute to the TSP and are under age 59½, there are only two ways to remove money from your…
Browsing: TSP loan
Q. I was offered VERA at office. I would like to accept, but have a TSP loan balance for a home loan that won’t get paid by the 90-day deadline. My retirement is set for July 2020. When I separate and still have outstanding balance, how will I get taxed and at what percentage rate? I was not due to retire until May 2027. Also, will it affect annuity payments, and how long do I have to pay the loan back? A. Any unpaid balance will be declared a taxable distribution and added to your tax return for that year as ordinary income. The tax…
Q. I have a balance of $15,000 on my TSP loan. If I stop payment because of hardship, will I be penalized 10 percent? I realize I will have to claim it as income, but the $500 extra would really help me.
Q. I am thinking of applying for a VERA/VSIP my current federal employer is offering. I have a TSP loan with a balance of $25,500, which I am still paying. Can I still apply for this early retirement if I have a TSP loan balance? If so, how do I continue to pay that loan?
Q. I currently am a GS employee and have a TSP residential loan; however, I may be transferring to an Overseas NAF job. Does anyone know if I can continue to pay on my TSP loan or do I have to pay it back to avoid penalties? I know NAF is federal but unsure about the TSP aspects.
Q. I am a few months from retirement. I have a small residential loan (circa $6,000) that I am still repaying, but would also like to take out some more money from the TSP via a general purpose loan just before retirement. This seems worth it to me, even with the eventual tax liability because I could use the extra cushion while my retirement income stabilizes with OPM. I am over 55, so am only going to have to pay the loan values at my regular income tax rate, money which I will set aside. My TSP account is very healthy, as is…
Q. I have a current loan that I am paying on in my TSP account. I am going to retire in May 2018 and I have already made a in service withdrawal from my TSP account. I will be 86 years of age when I retire, with more than 28 years of service. Is it possible to take a withdrawal to pay for the outstanding loan in the amount of $18,000? I do have a balance in my TSP account of more than $320,000. I have no other way to obtain these funds.
Q. I am a single/divorced female, 58 years old, and I have 38 years of federal civilian service. I retired December 30, 2017, with a small outstanding TSP loan balance – less than $900. I have about $55,000 in my TSP. I had previously left the federal service (eight years ago) and used my TSP balance earlier in my career. When I reentered the federal civil service I reinvested in TSP and currently have a balance amount of $55,000. I’m considering requesting the full amount of my balance. Will I be penalized if I do not pay this small loan back…
Q. I’m at my MRA (56 years old/35-plus years service time). I have a TSP loan balance of $30,000. How much is the tax if I retire and let the IRS penalize me?
Q. I just retired from the U.S. Postal Service as a FERS employee at 56 years of age. I have two outstanding loans against the TSP. My question is that if I elect not to pay them off within the 90 days and pay the tax on it for 2018, would that count as earned income against the $17,400 I am allowed to earn before being penalized on my Social Security supplement bridge? I am guessing that I would only be penalized 10 percent for early withdrawal in which case it still might be best for me to pay it off as…