Q. Can I transfer funds from Simplified Employee Pension Individual Retirement Arrangement (SEP-IRA) to the Thrift Savings Plan, or does the distribution have to be an “eligible rollover distribution”? I would not move the Salary Reduction Simplified Employee Pension (SAR-SEP) funds if it would be considered an “eligible rollover distribution” due to the withholding for income tax. A. As long as the accounts do not contain any after-tax money, they can be transferred without withholding to the TSP.
Browsing: Uncategorized
Q. If I take money out of an IRA to make a redeposit into CSRS, do I have to pay taxes on the money taken out of the IRA? A. Yes.
Using your Thrift Savings Plan to maximize your retirement standard of living isn’t complicated if you’ll ignore all of the lousy “advice” swirling around out there. Twenty years ago, federal employees were ignored by the investment industry. Most advisers and brokers need to take custody of large sums of your money to take their fees and commissions. They are either investment sellers charging sales commissions or “asset gatherers,” skimming a percentage each quarter from every dollar you invest. But until recently, federal employees were assumed to have their retirement wealth tied up in pensions, with little left over to invest…
Q. I’m unsure of what to do with my Thrift Savings Plan account. I understand that I could leave it in the account as it is until I’m 70½. I can also make a full or partial withdrawal. Full withdrawal is not an option for me. A TSP life annuity (both single or joint life) option is based on life expectancy or until the money runs out. Also there is the TSP annuity vendor (MetLife) where I could get the annuity but money used to purchase this annuity goes to the insurance company if you die before it’s used up.…
Q. I have an opportunity to retire under a Voluntary Early Retirement Authority. I have 30+ years of FERS service, non-law enforcement. My age will be 53 years and 11 months if I retire under this VERA offering. At what age will I have full access to my Thrift Savings Plan without the 10 percent early withdrawal penalty by “taking substantially equal payments over my life expectancy.” At what age will I have full access to my TSP without the 10 percent early withdrawal penalty by NOT “taking substantially equal payments over my life expectancy.” If immediately upon retirement I…
Q. I retired in 2010 and, at that time, I was informed that I was in the wrong retirement system (FERS). I chose to be put in the proper program (CSRS Offset). I was also told by my human resources manager that, since I was in retirement, I would be able to keep all of my Thrift Savings Plan contributions, including the agency’s matching contributions. On Dec. 3, the agency forfeited about a fourth of the value of my TSP account, without any notification that this was going to happen. Is this a legal action? Why was I not informed…
Q. My wife and I are getting a divorce. We are both federal employees with Thrift Savings Plans. My plan greatly outvalues hers. In my state, she is entitled to half of the value of my retirement account, and vice versa. Since we are both on the TSP, can I just transfer her entitlement from my account to her TSP account without a tax penalty, as this would be of greater benefit to her? A. She may request that her share be transferred to her TSP account using the appropriate TSP form.
Q. I will have worked four months short of the five-year mark when I leave the government to care for my aging mother. Can my FERS money be rolled over into my Thrift Savings Plan? A. No.
Q. After I retire, I am planning to withdraw $4,000 per month from the Thrift Savings Plan and I am not claiming Social Security. How will Social Security taxes be paid for the TSP I withdraw? A. Social Security taxes can’t be paid from your TSP withdrawals since they are not considered earned income.
Q. This is a follow-up to a prior question. I had asked whether converting my Voluntary Contributions Program account to an existing contributory Roth IRA would be taxable in light of the fact that I had pretax money in the Thrift Savings Plan. You had advised that it appeared to be a nontaxable event but that I should check with my CPA. I do not have a traditional pretax IRA. My CPA didn’t know anything about it, so I asked an expert in the field. The expert cautioned me not to roll over my pretax TSP into a traditional pretax…