Browsing: TSP withdrawal

Q. I am federal employee and plan to retire in about six months or a year. I want to leave the money in TSP when I retire, but want to include TSP in a living revocable trust. I read online that it is not a good idea because the IRS considers that as a lump-sum transfer and I will be taxed at almost 35 percent. But when I consulted an estate-planning attorney, I was told that I can include TSP in the trust, and it does not make any difference in how I withdraw the money. I am confused. Please…

Q. When I retire, I plan to roll over the balance of my TSP to my IRA in a brokerage account. Can I keep my FEHBP health insurance without having an annuity? A. Your TSP account has nothing to do with your FEHBP coverage.

Q. I am under the CSRS retirement system. I have 32 years of federal service. I am 56 and plan on retiring at 60. I contribute to the TSP, $17,500 per year and an additional $2,600 catch-up to the TSP per year. I am a GS-13/7. My high-3 would most likely be at this pay grade. How can I calculate how much my monthly annuity would be upon retirement so my financial adviser will have a better understanding of my situation upon retirement? I know about the ballpark estimates, but I would like something a bit more concrete. When do…

Q. My husband and I are looking at investing into a new hotel being built. I have worked in the hotel industry for 15 years, and this is a great opportunity for us. He has been active duty in the Air Force since 2011 and has roughly $20,000 in his TSP. Can he transfer his TSP balance to a Self Direct IRA to invest the money into the hotel deal? Are there penalties involved? He would continue his normal contributions to the TSP account as we move forward, but we are interested in using the $20,000 to invest in the…

Q. I will be 70 in February 2016 and plan to retire and take all my money out of my TSP. I am a single divorced woman and do have monthly security for which I have been paying taxes. Can I take all my money out, as I have calculated that the $1,000 I am from Social Security is not enough for my expenses as I have calculated it. A. Yes, you may take all of your money out. Use form TSP-70.

Q. I recently lost a high-paying private sector job. I may be getting a much lower-paying federal job. The only way I can make it is to cash out of my 401(k) about $35,000 to pay off debts. But I was thinking if I get the federal job, how long before I can participate in the TSP? And how long before I could take out a loan?

Q. Can I withdraw from my TSP if I accept a VERA with 30 years of service and my age is 47, or is there a penalty? If so, how much? A. If you separate from service before the calendar year in which you reach age 55, you will be subject to an IRS 10 percent early withdrawal penalty unless you qualify for one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.

Q. How do I request a TSP partial lump sum after age 59-1/2? What forms do I need to fill out, and how long does the process take? I plan to keep working until age 63 and continue contributing to my TSP. A. Use form TSP-75 to request an age-based, in-service withdrawal. Allow weeks for the withdrawal to be processed.

Q. My birthday is June 30, 1944, so I turn 70-1/2 on Dec. 30, 2014. Do I draw on this by Dec.30? Or if I wait until April, do I have to do two payments in 2015? A. Deferring some or all of your 2014 RMD into 2015 will reduce your taxable income for 2014, but increase your taxable income for 2015.

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