Q. I withdrew the bulk of my Thrift Savings Plan account a couple of years ago and rolled it over to an IRA, thinking I could get better earnings on my investment. It has not worked out that way. Can I put this money back into my TSP account? I have not yet retired and am still contributing 5 percent of my earnings to my TSP. A. As long as the IRA contains only untaxed money, you can and should transfer the money back into the TSP. Use Form TSP-60 to do this.
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Q. I have an IRA with Prudential Insurance. Can I roll over my IRA into my wife’s Thrift Savings Plan account with the federal government? The money would be hers, not mine. This way, when she retires in a year or two, she’d have more money in her TSP account. I already have a pension and don’t need that money, but my wife’s retirement will be less than mine and I’d like her to have more in her TSP. A. No.
Q. My financial adviser is encouraging me to move my Thrift Savings Plan funds immediately to a Roth account. Is this a good idea if I am retiring in the next 12 months or earlier? A. No. It’s not a good idea unless there is a good reason to do so. I’ll bet that your “financial adviser” is nothing more than a salesperson trying to take your money. Confusing the two is usually a costly mistake.
Q. My wife and I are FERS employees. We are both considering retiring early if offered Voluntary Early Retirement Authority at ages 50+/- (both with more than 25 years of service). With children still in the picture for some time, access and flexibility with our Thrift Savings Plan accounts are crucial to any plan. I would like to accomplish two things: 1). 72(t) withdrawals until 59½ in one account. 2). Flexibility to roll over funds currently in TSP into a Roth IRA held at another institution (from an IRA as I see no method to do that while the funds…
Q. I am a federal employee who will be retiring Jan. 3 after 40 years of service at age 58½. I took a necessary loan on my Thrift Savings Plan and will still have a balance on my loan when I retire. I understand I have 90 days to pay back the loan or I will be taxed for the money owed. I do not need my TSP money now. I would like to keep it there or invest somehow, not sure yet. I do not want to pay the money back, which makes no sense to me since I can take…
Q. I am considering retirement at 62 (FERS) but not collecting Social Security until my full retirement age of 66. I know that once you start withdrawing from your Thrift Savings Plan account, you must continue to make withdrawals each year. To bridge the time from 62 to 66, I’m thinking of taking funds from my IRA instead. If I start taking withdrawals at 62, can I stop taking withdrawals from my IRA at 66 when I start Social Security and then resume withdrawals at 70½? A. You’ve got the right idea, and it will work. You may start and…
Q. I turn 70½ in April 2014. My required minimum distribution can be taken anytime during 2014. Is it calculated on the balance in my IRA for 2013 or 2014? If I take it in 2014, the year I turn 70½, will I also have an RMD taken out Dec. 31, 2014, on the balance in my IRA in 2014? Will I have two RMDs in 2014? A. Your RMD amount for each tax year is calculated for each account that is subject to the RMD, and is based on the preceding year’s ending account value.
Q. Are there any advantages and does it make sense to transfer my wife’s 403(b) account into my Thrift Savings Plan account before I retire? I am planning to retire in 2015 at age 55 with 33 years of service (CSRS Offset). Will TSP even allow a spouse’s account to be transferred into the TSP? She will be retiring in 2014. She is not federally employed. A. It makes sense, and there would probably be advantages to doing this. But, alas, it’s not allowed.
Q. I will be 56 this month and have 27 years of federal service. I plan to retire in February. Will I be able to draw an immediate monthly income from my Thrift Savings Plan upon retirement without incurring the 10 percent penalty for early withdrawal? A. Yes.
Q. If I roll over my military Thrift Savings Plan into my civilian TSP, will I pay taxes? A. Not on the rollover.