Browsing: TSP withdrawal

Q. I have been digging through the training materials released by the TSP on the new withdrawal options, but have been unable to find any guidance on when the quarterly and annual withdrawals are paid. If I change from monthly to quarterly or annual for 2020, when will I get the money? A. From the TSP website: “You should allow up to 10 days from the time you submit your completed withdrawal request until the time payment is sent. We will notify you when your payment has been disbursed. You can check My Account or call the ThriftLine to find…

Q. I retired from the U.S. Postal Service at the end of 2018 with 31 ½ years of service. I met my minimum retirement age at 56, so I believe I wouldn’t be taxed a 10 percent penalty if I withdrew from my TSP before age 59 ½. I would like to withdrawal a partial lump from my TSP. Would I be taxed for that withdrawal? A. If you receive a TSP distribution before you reach age 59 ½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10 percent of…

Q. My husband is a retired CSRS annuitant and I’m a retired FERS annuitant. I turn 66 this year, which is my full retirement age for Social Security. I haven’t yet begun to receive SS payments or withdrawn any funds from my TSP, but would like your opinion as to leaving the TSP funds until I need to make Minimum Required Distributions. My feeling is that if I predecease him, he will not receive any of my SS, but will inherit my TSP. Our accountant thinks I should start drawing down the TSP and invest those funds, since we don’t…

Q. What is the annual withdrawal strategy that would allow me to avoid selling stock shares (C,S,I) during years that the market is down? I’m sure I read in “Money Matters” a strategy where a person could avoid a sequence of withdrawals disaster early in retirement by moving to the F and G Funds just prior to the annual withdrawal then back to stock shares immediately after the withdrawal. If there is such a strategy, could you explain it more specifically? A. Here’s the article I wrote for the Federal Times in 2016: How to Take a Selective Withdrawal Your…

Q. I recently took a VERA retirement from federal service at age 55. My understanding is that the 10 percent withdrawal penalty does not apply to subsequent TSP withdrawals. Originally, I chose a monthly fixed dollar amount of a full withdrawal that could be changed during open season, but with the TSP Modernization Act I can start and stop installments, as well as change withholding. Originally, I had planned to withdraw the full amount of my TSP over 5 years, but last month I chose a lesser amount to take out and TSP sent me a letter that my TSP…

Q. I am divorced and my ex received a lump sum payment from my TSP account. When can she begin receiving benefits? She is 62 years old now. Are her benefits in anyway tied to my age and retirement? A. Once her share has been removed from your TSP account and distributed to her, it is hers to do with as she chooses. Her options are no longer connected with your age.

Q. I am happy that under the TSP Modernization Act governing TSP withdrawals that I have the options to withdraw my funds monthly, quarterly or annually. If I depended on my TSP for one of my retirement income streams, are there any advantages or disadvantages when I choose how to withdraw my money given the choices now available? A. You should start with monthly distributions since that will enable you to most closely match your withdrawals to your spending.

Q. My brother, and only sibling, died recently. I am the executor and beneficiary of his estate. He never married, nor did he have children. I am inheriting: $770,000 from an employer 401(k) managed by Vanguard; $73,000 from a past 403(b) pension; and $320,000 in life insurance proceeds. I am 59, receive a military pension ($60,000/year), and am employed full time by the federal government. I have $500,000 in the TSP. Can any of the inherited funds be rolled into my TSP? Can any or all of the inherited funds be combined into a single fund? What would you do? A. The TSP…

Q. My ex-husband has given me the forms to receive money from his TSP account, but what form do I use to roll it over into my IRA account?  A. The distribution request form should contain a section where you can direct the proceeds to be paid to your IRA custodian for your benefit. If not, you’ll have to roll the funds over yourself using your IRA custodian’s deposit form.

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