Browsing: TSP withdrawal

TSP withdrawal

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Q. I retire next August. If I start taking monthly withdrawals, will I ever be able to make the one-time withdrawal for something big that might come along and keep the monthly payments. Or do I have to take it before the monthly payments start?

Monthly payouts

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Q. Are FERS retirement checks, TSP distribution checks and Social Security checks a monthly or bi-weekly distribution? Is there an option to make requests for either method? A. All are monthly.

TSP and divorce

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Q. I am 56 and have been drawing on my TSP by monthly payments (not annuitized)for 2-1/2 years. I am getting divorced and having to split assets. My understanding is that you can’t switch to lump sum after starting monthly payments until 59-1/2. However, divorce being a life event, does the TSP allow you to choose a lump-sum option to the TSP owner once assets are split by court order? A. You may end your monthly payments in a full and final lump-sum distribution at any time.

Permanently disabled

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Q. I am totally and permanently disabled by the VA due to service-connected disabilities. Can I withdraw some of my TSP without the 10 percent penalty? I’ve done some research and all I can find is the 10 percent penalty does not apply to people with total and permanent disabilities, but all the literature implies this rating comes from the Social Security Administration. A. The TSP does not levy the penalty. You must convince the IRS that you meet the disability exemption requirement. You are permanently and totally disabled if you cannot engage in any substantial gainful activity because of…

TSP distributions

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Q. I’m in the FERS retirement plan and will retire March 31 from the Defense Department. At the time of retirement, I will have more than $300,000 in my 401k. I have two multiple-part questions:  1. Can I decide how much I want to take in monthly withdrawals and, if so, do I pay the 20 percent penalty monthly or do they take the 20 percent off the $300,000 before I even start getting my monthly payments? 2. If I leave my money in the TSP, do they continue to invest my money, and will I continue to earn interest…

TSP withdrawals

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Q. I retired September 2013 in CSRS after 40-1/2 years. I want to take out a one-time distribution equal to about 25 percent of my TSP account. Is is true I can only take out a one-time distribution or payout? I am over 59-1/2. A. You are limited to one partial lump-sum withdrawal and a full withdrawal, which may be taken in the form of monthly payments. You must take the partial lump-sum withdrawal before beginning monthly payments.

Lump-sum withdrawal

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Q. Upon retirement, can I elect to take a full withdrawal in the form of monthly payments, and then at some later date choose to take a one-time lump-sum withdrawal? For instance, three years after retiring, can I choose to remove $50,000 if I have never taken a lump-sum amount. A. Only if the lump-sum is the entire balance remaining in your account.

Girlfriend on annuity

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Q. I am 63 and will be retiring under FERS probably within the next two years. Am I allowed to have my long-term girlfriend on my TSP annuity? A. Maybe: “If you chose a TSP annuity that provides for a joint annuitant other than your spouse, the joint annuitant must be either a former spouse or someone with an insurable interest in you. This means that the person is financially dependent on you and could reasonably expect to derive financial benefit from your continued life. Blood relatives or adopted relatives (but not relatives by marriage) who are closer than first…

Tax withholding

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Q. I’m 68 and still working, and I started drawing Social Security when I turned 66 two years ago. How do I calculate how much taxes will come out of my Social Security, TSP and FERS retirement checks? A. You will find the rules for tax withholding from TSP distributions in the table on Page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.

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