Q. From what I understand, I must repay a TSP loan within 90 days of the date my agency notifies TSP of my separation from service, otherwise my loan is taxable. When does the agency notify TSP of my separation, upon retirement? A. You’ll have to ask your agency’s benefits officer.
Q. I am under FERS and contribute the maximum amount into TSP. When I am eligible to retire (57-1/2), do I have to immediately start collecting out of my TSP once retired, or can I roll it over into another bank or institution into a 401K without penalty? And how does one receive payments if I can’t roll it over?
Q. I am a FERS employee and plan to retire in December 2015 at age 68-1/2 with 30 years, nine months of government service. I presently invest my TSP with G Fund 60%, F Fund 10%, C Fund 10%, S Fund 10% and I Fund 10%. Should I switch the money out of the G Fund and invest in C Fund 60%, S Fund 20% and I Fund 20%, as they seem to be doing so much better than the G Fund?
Q. I’ll retire under FERS at the end of this year. Will the lump-sum payment for annual leave that I’ll receive early in 2015 would be considered earned income for the purposes of being able to contribute to my non-TSP Roth IRA? A. No.
Q. You recommend that if we do not feel comfortable managing our TSP, we should invest in the L Fund that most closely corresponds to our life expectancy. However, the L Funds are named for the year we expect to start withdrawing money, not the year we expect to expire. I expect that I will not be withdrawing much money the year I expire, and certainly none afterwards. So why do you word your advice that way?
Q. I am a FERS employee eligible for a TSP residential loan of $23,000. If I request this amount for a primary-residence home purchase, would my down payment and closing cost need to be at or above this amount of $23,000 on my signed purchase contract? Not sure if I will put down 5 percent (13K) or 10 percent (26K). If I put 5 percent on purchase contract, will TSP decline the request for the full $23, 000 loan? I don’t want to write 10 percent on purchase contract if I am not going to put quite that much down,…
Q. I recently retired under CSRS. I am 57. I would like to take a partial withdrawal from my TSP. What penalties and taxes will I have to pay on the amount I withdraw. A. As long as you retired during or after the year in which you reached age 55, there will be no early withdrawal penalty due. There will be 20 percent mandatory withholding taken from your payment, however, unless you roll the money over directly to an IRA.
Q. I am an operations manager for the FAA covered under CSRS. I plan to retire Dec. 31, 2016, at the age of 55 with 34 years of service under the controller bill. Can I make a total withdrawal from my TSP in 2017 without paying the 10 percent early withdrawal penalty? A. Yes.
Q. I understand I am allowed to roll or transfer other 401’s or Roth IRA’s into TSP, but can I just invest money saved in traditional savings accounts into my TSP? A. While you may transfer certain qualified tax-deferred retirement assets into the TSP, Roth IRA and taxable savings are not eligible.
Q. I am three years away from retiring (active-duty military officer) and have some credit card debt I would like to pay off before leaving active duty. I am not eligible for a TSP hardship withdrawal because of my income. What would happen if I take out a TSP loan and intentionally not pay it back? I understand I would be responsible for it becoming a taxable distribution and a 10 percent early withdrawal fee, but would there be any other negative effects against me or my credit? Would it even be ethical?