Q. My question has to do with choosing to withdraw my TSP account upon retirement. I understand I can leave my balance with the government and either choose equal payments for my expected lifespan or have the government purchase an annuity on my behalf. What I do not understand is the difference between choosing equal payments for the rest of my life and purchasing an annuity solely for myself? What are the pros and cons for each? I also don’t understand why I am also given a choice to choose a survivor benefit with my wife as the beneficiary should…
Q. What happens if the down payment made is less than the amount of a TSP residential loan? Would the borrower have to claim the difference as a withdrawal and pay the penalty and claim as income? A. I don’t believe that there is a requirement to commit the entire loan to the down payment, but you should consult your tax preparer to be sure.
Q. I started working for the government about 2-1/2 years ago. I am 56 and plan to retire in 10 years. I am contributing 15 percent of my pay to the TSP G fund. I want to earn more than this fund is paying. What are your recommendations on which fund I should contributing to? A. If you don’t know what else to do, then about the best thing I can suggest is that you use the L Fund that most closely corresponds to your life expectancy. You won’t know how much spending this will safely support, but at least…
Q. At age 57, can I pull all my TSP out and roll it over into a primary house without paying tax? A. No.
Q. I know partial withdrawals are limited to one in retirement under TSP. Does this apply to rollovers as well? I want to top off my marginal federal tax bracket each year until I hit 70-½ by doing a TSP rollover of a varying amount to my existing external Roth account. If I have to use the monthly payment option to do it, it’s just too much trouble. A. Only one lump-sum TSP withdrawal or rollover is allowed per lifetime.
Q. I plan on retiring with 31 years of service at age 57. I have both the Regular TSP and the Roth TSP. I plan to withdraw my Thrift Savings Plan in a single payment. Can I transfer 100 percent of the Regular TSP to a Traditional IRA, but take the Roth TSP funds as a direct withdrawal without penalty? A. I believe so, as long as you have held the Roth account for at least five years. You should consult a tax adviser for specific advice before you proceed.
Q. I am 62 and a FERS employee. Can I retire with my FERS annuity and TSP and wait until my full retirement age of 66? I do not plan to work after I leave. A. Yes.
Q. If a VERA/VSIP is offered next year, will I be able to draw income from TSP without penalty? I will have 33 years of creditable service, and as of March 9 I will be 54.
Q. I know you are not a CPA but I thought this has probably been asked before and that you might have an answer. Are annuity fees tax-deductible on traditional IRAs?
Q. I am 56 and had to retire under a federal service disability retirement because of cancer. I am also receiving Social Security, and I have 90 percent disability from the Veterans Affairs Department. Can I withdraw from the Thrift Savings Plan without the 10 percent penalty, or do I need to wait until I’m 59? I’ve read that if I am permanently disabled I can waive the penalty. But I can’t find any info as to how I prove permanent disability for tax purposes. I know I can’t work and retired with disability under federal service and Social Security, but is that permanently…