Q. I retired Dec. 29 at the age of 70 years and five months. I plan to take my Thrift Savings Plan money out, according to the Internal Revenue Service required minimum distribution table, which I understand I must begin no later than April 1, 2014, the year after the year I turn 70½. However, I may decide to take my one partial withdrawal, as well, and at the latest possible time. I’m pretty sure I read that I must make that withdrawal option effective by Dec. 31, 2013, the year I turn 70½, but now I can’t come up with…
Q. I am a GS-04, Step 10. My account balance as of Dec. 31 would provide me with a lifetime Thrift Savings Plan monthly amount of $451. As of this time, I contribute $300 every pay period to TSP. Let’s say my goal is to have a lifetime TSP monthly amount of $1,000. By how much would I have to increase my TSP amount each pay period? I am 52 years old. I am under FERS. If I was offered an early retirement, should I take it? Or should take the chance of getting furloughed for an uncertain amount of time? A. Unfortunately,…
Q. You received a question asking if one could transfer money from a Simplified Employee Pension IRA to the Thrift Savings Plan after retirement and you said “yes.” Is the answer the same for making the transfer before retirement? A. Yes.
Q. I worked for the federal government for over 28 years. I retired last year under Voluntary Separation Incentive Pay provisions June 30, 2012. I am considering re-employing/reinstating. Am I eligible to return to work on July 1, one year after retiring? Can I repay the VSIP in cash or in payments? I read once that you can make payments for up to 36 months upon re-employment but am not sure whether this is correct. I understand the VSIP must be paid back before I return to work. Upon re-employing with the government, will I be able to contribute to…
Q. I was approved for disability retirement in November under FERS due to my diagnosis of a malignant, incurable brain cancer (my life expectancy is six to nine months). I withdrew my Thrift Savings Plan in lump sum ($29,000) to pay my medical and living expenses. I am including my TSP distributions in my tax return. If I understand correctly, my TSP money should be added to my earned income (for example, if I earned $50,000 + $29,000 TSP =$79,000 total year of 2012 income) and it will be taxed as ordinary income. Is there any way for a terminally…
Q. I will be retiring from the military at age 66 in June. I only have about $40,000 in my Thrift Savings Plan account and would like a lump-sum withdrawal. How can you figure out how much will be taken out of that amount in taxes? A. The information you’re looking for is here https://www.tsp.gov/PDF/formspubs/tsp-536.pdf on Page 3.
Q. I did a direct rollover from the California Public Employees Retirement System (a tax-deferred retirement) into the Thrift Savings Program. I have received a Form 1099 from CALPERS. I do not know why CALPERS would send me a 1099 as the monies went directly from one tax-deferred account into another. Do I have to declare the CALPERS monies, even though they went directly from one tax-deferred account to another? If I have to pay taxes on these monies, wouldn’t that make my contribution to TSP ineligible? If I have to pay taxes on this direct rollover, wouldn’t that mean I would,…
Q. I am retiring under FERS soon. I am now age 69. I have about $175,000: 74 percent in G Fund; 24 percent in C Fund. I would like to move some or all out of the G Fund to get a better return. Your advice would be appreciated. A. This is not nearly enough information to determine the proper asset allocation for you. I will note, however, that the additional return you seek will come with much greater risk of loss than that posed by the G Fund, so be careful.
Q. According to a letter I received from the Thrift Savings Plan, I’d save in account management fees if I transfer traditional IRA to TSP. I don’t feel comfortable with this transfer. How would we know that the federal government won’t decide to use our funds, like they borrow Social Security funds, and then it won’t be there when we want it? What are your thoughts on this? A. What you’re worrying about is against the law. I think you are worrying needlessly. Your money is probably at greater risk in an IRA.
Q. I am a retired federal employee, having worked for the Social Security Administration. I have funds accumulated in the Thrift Savings Plans. I am getting close to age 70 and am considering the purchase of a life annuity with some or all of those funds, and know that those payments will be taxed by the Internal Revenue Service. But what about the states — particularly, for me, Alabama? Are these TSP annuity payments taxable by Alabama? A. I don’t give state tax advice for each of the 50 states. You should ask an Alabama CPA for specific advice.