Browsing: TSP withdrawal

Q. I am 50 and I retired as a firefighter (Special Category) on Dec. 31, 2013, with 25 years and 10 months of service. I want to withdraw my TSP but I’m being told by TSP that they withhold 20 percent for taxes and my accountant is telling me that I will have to pay 10 percent for a penalty because I retired early. I looked into the IRS publications 575 and 721 and they state I don’t get charged a penalty.

Q. Is there a way I can get federal taxes deducted from my TSP withdrawals. I am currently receiving a monthly payment. A. Yes. Use form TSP-78: https://www.tsp.gov/PDF/formspubs/tsp-78.pdf.

Q. I want to pay off a few student loans before I retire from the military. I want to use my TSP to do so. Should I convert my TSP to a Roth IRA so I can avoid the heavy withdrawal fees? A. There are no fees for withdrawing money from the TSP. All withdrawals from the TSP (except contributions you made from tax-free combat pay) will be subject to income taxation and, 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, any withdrawal you take before reaching age 59-1/2 will be…

Q. Is a TSP age-based withdrawal, taken while an employee is still working, credited toward the required minimum distribution when the employee later retires? A. Only if it is taken during the year subject to the RMD.

Q. I retired April 1st this year at age 72. When do I have to start taking money out of my 401k and what percentage would it be? A. I don’t answer questions about 401k accounts in this forum, but I will answer the question as though it was posed about the TSP. Your first RMD is due by April 1, 2015. I can’t calculate the amount of the RMD from the information you’ve provided, but you can do it using the instructions contained in IRS Publication 590 or using an online calculator from a trustworthy source.

Q. I retired over a year ago and just started working again. Can I transfer my TSP account to my new company’s retirement savings plan without a penalty? I’m 54 and plan to work until age 65. A. Yes, but it might be a bad idea. You’ll probably be better off keeping your TSP account and transferring your private-sector plan balance into it after you retire.

Q. I want to make a one-time partial withdrawal from my TSP account. I realize this withdrawal is subject to the Virginia state and federal income taxes. Who should I contact to learn how much taxes, both federal and state, I have to pay? A. The withholding requirements are listed in the table on Page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. You won’t know how much tax you’ll actually owe until you file your tax returns for the year, however.

Q. I am a retired law enforcement officer with 25 years of service. I retired from the Bureau of Prisons in December 2009 at age 48. I am receiving my pension and the supplemental annuity. I have $300,000 in my TSP account and want to start withdrawing it. What are my options to begin receiving money from the TSP without buying an annuity and not having to pay the 10 percent early withdrawal penalty? Can I take a one-time distribution of say $100,000 without penalty? Can I withdraw the whole amount without penalty? Can I take $2,400 per month out…

Q. I am a 57-year-old FERS employee with over 38 years of federal service (including seven years of military service which I bought back). I have approximately $470,000 in my TSP account and plan to retire in January 2015. Can I take an immediate one-time-only partial withdrawal when I retire and elect to receive a specific dollar amount of monthly distributions immediately thereafter and, in a few years, halt the monthly distributions and roll over my remaining TSP balance to an outside IRA? A. Yes

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