Q. I left federal service in 1998 after almost seven years. I left the Thrift Savings Plan intact and have seen it grow quite nicely. It is approximately $95,000. My husband has been in federal service since 1995 and will most likely stay in until retirement age (we are both 49 yrs old). My husband’s TSP has also grown nicely. However, being a stay-at-home mother of five, we are seriously struggling. Our oldest child is two years away from college and our next oldest will be starting at a very expensive parochial high school in September. Our other children are 11, 9 and 3. Our biggest…
Q. I am a contractor in between jobs and would like to withdraw my Thrift Savings Plan. If there are any owed monies to the government, will that be taken from my TSP? How much tax will be taken from me if I do a lump sum? And is there a difference in taxes if I do a monthly payment? Lastly, is there a hardship exemption rule if unemployed? I am retired from active duty (20 years) and 42 years old. A. There is an “it depends” at the beginning of the answer to each of your questions and I can’t…
Q. I am retiring under FERS in a few months, and am looking for recommendations on how to best invest my Thrift Savings Plan dollars. I believe my options are to buy a MetLife annuity, leave the funds in my TSP account until I turn 71 years old (I am now 60), or roll the TSP dollars into an IRA or other type of investment account. I have approximately $350,000 and will receive my FERS retirement and eventually Social Security. Do you have any recommendations to roll the dollars into an investment account that I could occasionally draw from and that could draw…
Q. If I resign after 14 years of civil service and do not wish to cash out my Thrift Savings Plan, can I roll it over into a private-sector employer’s 401(k) without penalties? A. Yes.
Q. I read one day this past week that federal employees who are retiring may be allowed to make a one-time withdrawal from there Thrift Savings Plan account at age 55 without penalty due to the fact they will receive a six-month reduced (estimated to be 50 percent) annuity until the Office of Personnel Management can reconcile the employee’s account. Where is that information in writing? A. I haven’t seen this in writing. If you read it, I presume that it must have been in writing. Where did you read it? The current law allows you take one or more…
Q. How many annuities can I purchase from MetLife with my Thrift Savings Plan funds? A. As far as I know: One through the TSP’s program and as many as you’d like through MetLife’s retail operation.
Q. I am expecting to receive a payment from a pension plan for which I am expecting to be charged the 10 percent early withdrawal penalty. What is the best method to pay that penalty and avoid any additional penalties for not withholding sufficient taxes when I file my annual returns in April? Can I send the money to the Internal Revenue Service ahead of my regular tax filing? If so, what form do I use to remit it? A. This is a question for your tax preparer.
Q. Is there any way to have the Federal Retirement Thrift Investment Board add an investment option to the Thrift Savings Plan offering for religious reasons? The holy books of the Christians (Bible), Jews (Torah), and Muslims (Qur’an) all forbid earning or paying interest (aka usury-defined as a “use fee” for cash). Since I practice my faith as best I can, that leaves me no option to participate in the TSP program because all the offerings have some element of interest derived income in them. Although in modern times “usury” means exorbitant interest, in the holy books it was just a blanket…
Q. Can you leave a percentage of your Thrift Savings Plan account to grandchildren’s 526 college fund? A. This is really a question for an estate planning attorney, but it seems to me that this is like asking if you can designate a person’s Roth IRA as a beneficiary — and the answer to that questions is no.
Q. My understanding is that a spouse’s traditional IRA (not a Roth IRA) cannot be transferred into a government employee’s Thrift Savings Plan 401(k) account? Can you tell me if that is correct? A. That is correct.