Q. I am a federal law enforcement officer covered by FERS and, by Sept. 30, I will have more than 29 years of service plus more than a year of sick leave. To obtain my annuity beginning Oct. 1, I would like to retire on Sept. 30, but it is in the middle of a pay period. I plan on front-loading my Thrift Savings Plan and TSP catch-up contributions starting in April for the rest of this year to reach the maximum for both. Would there be any TSP match in my last, partial pay period, or should I just…
Q. Can traditional Thrift Savings Plan funds be transferred/rolled to Roth TSP funds after retirement, while paying taxes on the amount transferred? I’m trying to at least save the taxes on the five-year growth. A. You may not convert your traditional TSP funds to Roth TSP funds. I’d like to see the math that convinces you that this is a good idea in the first place.
Q. I will be 59½ this time next year. I would like to withdraw a one-time lump sum. What is the tax percentage rate I would pay in federal and state (Michigan) taxes? A. The answer will depend entirely on the tax code and your tax return for the year of the withdrawal.
Q. I been following the news about Cyprus’ banks. I want to find out if our Thrift Savings Plan I Fund money is invested in Cyprus’ banks. If yes, is it good to move money back to another fund? A. No.
Q. I am 64 years old and will be retiring in a year. I have 15 years with the federal government. Do all of my Thrift Savings Plan contributions have to be withdrawn prior to a specific age? I also understand that my total TSP account will be charged 20 percent. Am I to understand that after the 20 percent is subtracted from my TSP account, I have to pay income taxes per year for withdrawals I make from my TSP account that will be added to my total gross income? A. You will be required to begin taking minimum annual distributions…
Q. I am 66 years old and plan to retire in 2014, at which time I would transfer (convert) my Voluntary Contributions Program monies directly into a newly created Roth IRA. However, I have an existing (non-TSP) Traditional (substantial) IRA (never taxed), and know the Internal Revenue Service will aggregate my Traditional IRA balance for purposes of determining the taxability of this VCP-to-Roth conversion. If, prior to retirement, I (in 2013) transfer (direct rollover) my Traditional IRA into my existing Thrift Savings Plan account, will those monies now be considered 401(a), and therefore, making my subsequent VCP-to-Roth conversion occur with…
Q. I’m a 58-year-old FERS employee with 29 years of service. I have two years of leave without pay from while I was mobilized in the Army Reserve (2004-06). I am in the process of paying my military deposit to buy back this time. After returning to federal service, I did not identify that I wanted to catch up on the Thrift Savings Plan and get my TSP matching contributions. I recently read on the TSP website that I could still use the substantial contributions I made to the uniformed services TSP to request my civilian matching contributions. I have…
Q. I have a non-401(k) Roth IRA. Why can’t I roll it over to a TSP Roth IRA? Both are after taxes. A. The rules are the rules.
Q. When retiring, can I take a large sum of my Thrift Savings Plan out before starting my monthly allotment with the remaining amount? A. Yes, as long as you haven’t taken an age-based, in-service withdrawal before you retire.
Q. I just finished paying off a Thrift Savings Plan loan, and the last loan payment was greater than the necessary last payment. Apparently, the difference will be sent to me by check. Does this count as a disbursement? Will I have to pay a penalty on this money? How can I just put it back into the TSP where it belongs? A. It doesn’t belong in the TSP. It’s an overpayment and will be refunded to you with no distribution or tax liability accruing.