Q. I contribute the maximum amount to my Thrift Savings Plan each year. Can I also contribute the maximum amount to a traditional IRA? Are there any prohibitions to me doing this? Is there a limit to tax deferring compensation? What I am considering doing, if possible, is to contribute to a traditional IRA for a number of years, then roll it over into my TSP if that could possibly provide a better benefit, such as when it comes time to purchase an annuity. A. If only it were that easy! There are limits, and the amount you can contribute…
Q. I am trying to decide whether to withdraw from my TSP account or take out a loan to purchase rental property. I am no longer employed with the federal government and I am 55 years old. What would your advice be? A. I won’t give you advice since I’m not familiar with your circumstances, goals and preferences. Also, you should avoid taking advice from someone who’s not responsible for the outcome it produces. I will give you some things to consider in deciding what to do, though. If you separated from federal service before the calendar year in which…
Q. I am 50 years old and have 32 years of government service. If I defer my retirement until I am 56 years old, can I receive payments from my Thrift Savings Plan account through a life annuity. Also could I get another job and still receive the life annuity payments? A. Once you’ve separated from federal service, you may use your TSP assets to buy a life annuity at any time. Your annuity payments will continue regardless of your employment status, once they have begun.
Q. I had a 401(k) plan with my previous employer. I rolled over into an account with Fidelity after I left and haven’t added any money to it since. Can I roll it over again to my current Thrift Savings Plan account? What form would I need to use? A. You may transfer the assets into the TSP as long as the account contains no after-tax dollars — that is, money you contributed after it was taxed. Visit www.tsp.gov for more information and use form TSP-60 to request the transfer.
Q. I am under the Federal Employees Retirement System. I am 49 with 21 years of service. I am being told there will be a Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay offered this fall and next spring. I will turn 50 during the VERA/VSIP timeline. If I take the VERA, will my government annuity be reduced by 5 percent per year? Will I be able to receive both my government annuity and my Thrift Savings Plan annuity as soon as I leave service? Is there a penalty in taking the TSP annuity now? Will I qualify to get the Social…
Q. I would like to withdraw monthly payments from my Thrift Savings Plan that are less than the monthly interest might be. Is this possible? A. Yes, but you’ll have to pick the dollar amount.
Q. I did a hardship to take care of my mother who had become ill, taking a pay cut on the way, and leaving behind the house I bought in 2005. After a year and a half on the market, the house I used to live in has become a short sale. The bank wants $25,000 in cash, which I don’t have at the moment. The bank also wants to see my Thrift Savings Plan account. I know they cannot levy against it, but I assume they want me to, in order to make up some of the difference. I would like to retire…
Q. We are getting ready to be offered an early retirement under the Voluntary Early Retirement Authority. I’m a Civil Service Retirement System employee, and I’m thinking about taking the offer. I would like to withdraw my Thrift Savings Plan, but I won’t be 55 until Feb. 22, 2012. Is there any way of getting around paying the 10 percent Internal Revenue Service penalty for early withdrawal under the age of 55? A. If you actually separate from service on or after Jan. 1, 2012, your TSP withdrawals will not be subject to the early withdrawal penalty. If you separate…
Q. My spouse has a 401(k) from a previous job. Can I add my name to this 401 and transfer it to the Thrift Savings Plan? A. No.
Q. I am a 66-year-old female who retired in January 2007, with more than 30 years Civil Service Retirement System service. I am thinking of withdrawing my Thrift Savings Plan savings. I understand that I will not be penalized the 10 percent, and I would have to pay the mandatory 20 percent if I decide to withdraw. Does the 20 percent also apply at age 70½? Does this also apply to partial withdrawals, and do you have to pay back if you do a partial? Is the amount taxed by the Internal Revenue Service on your entire TSP earnings? What percentage…