Q. I just discovered that my contributions to the Thrift Savings Plan don’t show up there until seven to 10 days after I’m paid, but that money doesn’t sit in my bank account all that time. Do you have any idea where that money goes for that time? Is the TSP earning interest on it? If so, does that interest get deposited in our accounts, or does the TSP get to keep it and put it toward administrative costs? At the speed money can move these days, I find it hard to believe it takes seven to 10 days to get…
Q. I am planning to retire next year. If Congress extends the Roth rollover provision, I am interested in pursuing the following scenario: I have funds in the Thrift Savings Plan that will be fully taxable upon withdrawal. If I withdraw them upon retirement (at 56), I will be taxed on them but not subject to the 10 percent penalty. I propose to take those funds and immediately (within the same day if possible) transfer them to the CSRS Voluntary Contribution Program account, which then could also allow a rollover into a Roth account. Therefore, am I permitted to fund the…
Q. In IRS Publication 575 on page 33, they list an exception from the 10 percent penalty on withdrawing from the Thrift Savings Plan fund for qualified public safety employees. As a federal agent, if I retire in the year in which I turn 50, am I exempt from the 10 percent early withdrawal penalty based on the qualified public safety employee clause? IRS Publication 721, pages 17-18 lists a law enforcement officer as a qualified public safety employee. If this is the case, why do they not mention this when doing pre-retirement seminars? A. The exception only applies to defined benefit…
Q. I’m a FERS retiree, age 64, with a $36,000 annual pension. My spouse has a $40,000 annual salary. We have a rental property that brings us $24,000 a year. And we have a home mortgage balance of $500,000. Our living expenses so far do not require me to withdraw my $600,000 Thrift Savings Plan fund. I plan to live until age 85. As I approach age 70½ with minimum distribution, what is the best tax strategy for transferring the $600,000 from the TSP into a private investment account? A lump-sum rollover into a Roth account after paying the taxes? A calculated…
Q. I have five years at the Veterans Affairs Department and 4½ years at the Transportation Security Administration and am about to be suspended/terminated (FERS). Being non-military, can I leave my Thrift Savings Plan and FERS with the government without penalty or roll over to Vanguard since I am not 56? I have more work time in the private sector than with the government. A. You may maintain and manage your TSP account for as long as you live. You may also roll your TSP money over to an IRA and close your account after you separate, without penalty, regardless…
Q. I am in FERS and I am planning to pay in full my CSRS redeposit service balance for my 17 years of prior CSRS service. I want to pay via direct transfer of a check sent on my behalf from the Thrift Savings Plan to the Office of Personnel Management. TSP tells me it is permissible, and all I need OPM to do is to fill out TSP Form 75 and have OPM check that it is an eligible retirement plan and include the address where to mail the check. This would be a trustee-to-trustee direct transfer. Three different…
Q. I am retiring from the Postal Service in 10 days. I have an outstanding loan for $6,500. I do not have the funds to pay off the loan now, and I need an immediate partial withdrawal for $30,000 when I retire. How do I get this done ASAP? A. Use Form TSP-77 to request a partial withdrawal following separation from service.
Q. I work for a defense agency and I am planning to retire after 28 years of service at the end of this year at age 66. Now I am considering my options for handling and managing my Thrift Savings Plan fund. I have a question regarding withdrawal. According to TSP 775, I can withdraw funds through a single payment, a series of monthly payments or and purchase an annuity. If I decide to go for a series of monthly payments, which TSP form should I use to submit my application? A. TSP-70 – Request for Full Withdrawal.
Q. I have 19 years of federal service (counting the 10 years active duty I bought back). I am 51, and I fall under FERS. I don’t trust the government retirement system with what is going on in the economy and would like to invest in gold or silver, but I don’t trust it being in some IRA in another state, that if everything were to go south, I wouldn’t get anything anyway. Is there any way of withdrawing some or all of my funds without penalties to invest in hard assets? A. Not until you reach age 50½ or…
Q. I am planning on retiring within the next two years. I have a few IRA investments that I would like to transfer to the Thrift Savings Plan, but when I retire, will I be able to them leave there, or do I have to liquidate all my accounts in TSP when I retire? A. You may continue to maintain and manage your TSP account for as long as you live. You may also transfer eligible assets into the TSP at any time, for as long as you maintain the account.