Browsing: TSP withdrawal

Q. I retired as an air traffic controller at age 50 in 2008. In order to take money from TSP, I had to do it based on life expectancy. Now at 57 I want to make a one-time withdrawal. I’m being told I will not be able to do this for some reason (which is not clearly stated anywhere). Why is this? Where is it stated I cannot make a withdrawal? What are my options now?

Q. I turned 70 ½ in April. I want to withdraw the minimum required before the end of this year to avoid getting taxed more next year. How do I request this? It seems they will send it at year’s end, but I would prefer getting it sooner.

Of the questions I receive from Federal Times readers, the most frequent must be “How can I avoid the IRS penalty on early withdrawals from my Thrift Savings Plan account?” and “How should I invest my TSP money?” The answer to the first question is straightforward and requires no more than an explanation of the rules. The second question is much more difficult to answer, and really can’t be answered properly without a fair amount of information, analysis and consideration. How you should invest your TSP account at any point in time depends entirely upon what the money is expected…

Q. I have retired from the United States Postal Service because of disability. I want to do the one-time withdrawal of $60,000 and monthly annuities of $1,000 dollars. I have $318,000 in TSP. I am also a 100 percent disabled service-connected veteran. Will I be charged the 10 percent early withdrawal penalty from the IRS? My monthly annuities will last well into my 60s. Also, what is the special retirement supplement?

Q. I plan to retire at age 69 and a half, and elect the monthly withdrawal option for the TSP. One year later, when I am 70 and a half, RMDs will kick in. Will my withdrawal option count as the RMD, or will I have to take the RMD on top of my monthly elected amount?

Q. I am thinking of making a partial withdrawal of my TSP. I saw on the TSP-77 withdrawal form that the federal government will charge me a 20 percent income tax when making the withdrawal. How much income tax will the state of California charge me upon the withdrawal?

Q. I will be 64 when I retire [Dec. 31, 2016]. I will have a mortgage of about $106,000 at 3.25% interest.  The state in which I live does not have state tax. My TSP should have about $157,585 when I retire. Should I take a lump sum payment and pay off my house or roll over the money into a Roth IRA? What is the tax rate the government would charge if I take a lump sum when I retire?

Q. Upon retirement, if leave my money in the TSP with a mixture of the G Fund and the C Fund, when I take monthly payments which fund will the payments come from? Can I designate monthly payments to come from the G Fund first?

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