Q. I am a veteran and a federal employee at a VA Hospital. I am under FERS. I just turned 56 on July 30, 2016, and I have a total of 27 years-plus of federal service. Last August I filed my disability retirement because of my disabilities, and the papers are still being processed. Hopefully they will finalize it by next month or this month. If I withdraw all my TSP (lump sum), will there be a penalty?
Browsing: TSP withdrawal
Q. I have been considering moving TSP money into the G Fund to have it exempt from New Jersey state income tax. My search for an answer leaves me with confusing information regarding exemption from state tax which talks about “direct” obligations and qualified mutual funds which invest in federal obligations and bonds. To summarize: Since savings bonds, etc. are exempt from state tax, and the G Fund is made up entirely of federal obligations, couldn’t that fund be exempt?
Q. I’m retired, and for 2017, I increased the amount I’m taking out in monthly TSP withdrawals. I received a letter today from TSP acknowledging my payment had increased, the correct amount and the number of months these payments are expected to last. The letter went on to say if my payments are expected to last less than 120 months, they’re considered eligible rollover distributions, not periodic payment for tax purposes. I really don’t know what this means, but somehow I suspect it means I’ll pay more in taxes. Can you shed light on this?
Q. I am retiring in 15 months with 34 years of service at age 56. I am downsizing my house for a lower house note. I have enough in my TSP to purchase a home. Is this a good idea? The note on the house would be equal to what I would receive from my TSP. I will still have my FERS supplement and my FERS.
Q. I will be eligible for retirement on July 7, 2017. I will be age 56 and have 30 years in. I came in under FERS. I’ve been told I would fall within the exception, meaning I would not be penalized an additional 10 percent if I take my money from my TSP before age 59½. As you know, when someone gets close to retirement, there are a lot of financial advisers showing up to guide you. The problem I have is they are telling me I can’t take my TSP until age 59½, and I know this is not true. Can…
Q. I am in a position to buy back five years and nine months of service for just fewer than $5,000. At 63 years old, I have 26-plus years of service before the buyback. I wanted to take a TSP withdrawal to pay it back. If I withdraw that amount, do I have to pay it back? Would it make a significant difference for my retirement to buy that time back? What would the trade-off be concerning a withdrawal to the benefits received with the bought-back time?
Q. I heard that if you have a Roth TSP and make withdrawals before 59½, the exception under the Defending Public Safety Employees’ Retirement Act does not apply to the earnings portion of the Roth TSP. (I know if you transfer money to a an outside Traditional IRA or Roth IRA, you lose exception). I am a federal agent who qualifies as a public safety employee, and I’m retiring at age 56. I have money in both a traditional TSP and Roth TSP. I plan to start withdrawing upon retirement. Will I be penalized for having a Roth TSP?
Q. I am 58 years old and have been with the Transportation Security Administration for 14 years. My TSP account is down to whatever the government has put into it. I had taken out money to live on, as I am looking at a disability retirement due to some vertigo issues. They told me I can’t take out the final amount until I am 59½ — that will be another year. Is there a way to get those funds released prior to that due to hardship? I have used up all my sick and annual leave and savings due to this…
Q. I’m a few years out from retirement but want to plan carefully for that day. A lot is written about earning money from outside sources (e.g., non-federal employment or self-employment) and how it affects Social Security benefits. What I want to know is if I retired today under the $15,480-allowed outside-income criteria, would my FERS annuity and any TSP income (either annuity or withdrawal) be included in that $15,480-income ceiling, or are they treated separately thereby allowing me to receive my full Social Security benefit, FERS annuity, TSP income and outside income together without reductions?