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Q: I am a postal worker for 23-plus years of service. I am 45 years old. Is there a way to withdraw all my Thrift Savings Plan funds without penalties? If I can do this, I can bring down my mortgage and not be in a foreclosure situation. I do remember that President Obama, in his campaigning days, promised we could withdraw from our retirement funds. What happened to that? A: As an active employee, you would only be able to withdraw funds from your TSP account under the financial hardship allowance. Your withdrawal will be subject to penalty, however,…

Q: I plan on retiring in 2010 under the Civil Service Retirement System. I have recently opened a voluntary contribution (VC) account but only have put $25 into the VC account. I plan on putting a large amount of money in the VC account once I retire and then roll over only the after-tax contributions in the VC account into a Roth IRA. Will conversion of the VC account into a Roth IRA require that I aggregate my other IRA balances for the purpose of figuring out the taxable amount of this conversion? A: This is really a question for…

Q: I plan to retire at the end of December 2009, and am thinking about cashing in some or all of my Thrift Savings Plan in 2010. I am on the Federal Employees Retirement System and I turned 62 this year. How much will I be penalized by TSP? I know I will pay income taxes on it in 2010, but I am wondering if I’ll get penalized, as well. A: You’ll pay taxes, but no penalties.

Q: If I leave before I reach my Minimum Retirement Age, will I be able to start withdrawing from my Thrift Savings Plan when I reach my MRA without a penalty? A: Yes, but restrictions will apply if you separate from service before the calendar year in which you reach age 55. See the notice at http://www.tsp.gov/forms/octax92-32.pdf for more details.

Q: I am a 59-year-old Federal Employees Retirement System employee and have 35 years of service. I am considering retirement next year after reaching my 36th year. I would like to know my options concerning the Thrift Savings Plan. The questions I have deal with both leaving the funds in the TSP and moving them to another form of retirement account, which would not result in an immediate tax liability. Could you please explain the options available and what the benefits are to each? A: You may leave your money in the TSP or roll the balance over to any…

Q: I have mutual funds and Roth IRAs with an outside company. Could I roll everything into my Thrift Savings Plan account? A: You can transfer traditional IRA or Qualified Employer Retirement plan balances that contain no post-tax dollars (non-deductible contributions) into your TSP account. You may not transfer Roth IRA money or non-IRA mutual fund balances into the TSP.

Q: I have recently taken Voluntary Early Retirement from the Postal Service as of Oct. 31, 2009. I want to withdraw money from my Thrift Savings Plan account under the 72(t) section, but am having difficulty filling out the TSP 70 form correctly. I want to do it right the first time so that my case is handled properly and I do not have to encounter any complications later on. Can you guide me on how to fill out this form correctly? I turn 55 on Dec. 2, I am married, and my TSP balance is approximately $400,000. A: The…

Q: I read your column about getting expert advice on financial planning for retirement from someone who will not have a conflict of interest. I am planning on retiring from the Civil Service Retirement System in February after 40 years of service and suddenly realize I need some help. I will also be rehired as an annuitant and will have another income stream for at least another year. Can you provide help or at least a recommendation to whom to contact? A: You can contact me through my Web site at http://www.variplan.com or at mmiles@variplan.com.

Q: Due to some less-than-intelligent decisions I made 10 years ago, I have a tax bill with the IRS for over $100,000. The only asset I have that would enable me to pay this bill is my Thrift Savings Plan. The IRS has put a levy on my wages and won’t discuss an offer in compromise because I have $280,000 in my TSP. I am 58 years old and didn’t plan on retiring until I turned 60. Can I liquidate my TSP, transfer the funds directly to a tax-deferred IRA and avoid the tax bite, but still liquidate enough funds…

Q: I am a 62-year-old federal employee who will retire in January 2010 under the Civil Service Retirement System. I have put after-tax money into the voluntary contributions (VC) program and plan upon retirement to roll the interest earned directly to my Thrift Savings Plan account and the after-tax contributions to a Roth IRA. I understand that the IRS says that the VC program is a Qualified Retirement Plan. Can the after-tax contributions can be rolled directly to a Roth IRA without paying taxes on the rollover? A: In general, it is possible to roll your VC balance into a…