Q. If I retire at 59, leave my money in TSP and immediately start taking monthly payments, can I leave my money there past 70 ½ and continue drawing monthly payments? Someone told me at 70 ½ I have to take it all out, but that’s not the way I understand it. A. You were misinformed. You may leave your money in the TSP for life, as long as you take the Required Minimum Distribution each year after reaching age 70 1/2.
Q. Age: 56 (will be 57 in July 2011) Service comp date: May 1983 Hired: July 1984 Retirement: FERS from the start Break in service: May 2007-February 2009 (about 22 months) Military: USMC 1975-1978 (“bought” the time) VER Authority: Application deadline and irrevocability date 4/25/2011 Effective date 5/31/2011 RIF Effective Date: Sept 9, 2011 Questions ========= If I lost my job on Sept. 9 (with 28 years and about four months service) and took a discontinued service retirement, would I be eligible for: a) Annuity supplement (Social Security offset) b) No “+ 10” reduction of my FERS annuity c) TSP…
Q. What are the answers to the below questions if under age 55? For instance, taking a early retirement option at age 53 — how would the TSP 10 percent penalty apply using the original scenarios in the question?? Original question: Q. I have read many of the articles and TSP literature and I am still a bit confused. As a federal law enforcement officer over age 55, I plan to retire later this year. I have read that if I want to take withdrawals from my TSP account prior to age 59½, I can do so without having to…
Q. I am exploring the idea of retiring from the postal service as a CSRS with 32 years at age 55. Can I just leave my money in the TSP? Some answers I read say you can keep it in, but I have also read that I have to withdraw it when I retire. I prefer to leave it and not touch it for at least 10 years. So what is it? A. You can, and should, leave your money in the TSP until you have to begin withdrawing it -– usually at age 70 1/2.
Q. I am still employed by the federal government and am 63 years old. Am I permitted to transfer a portion of my TSP to an traditional IRA now, before I retire? I expect to retire in December. A. You may take a single age-based, in-service withdrawal and transfer or roll it over to an IRA.
Q. What fund diversification strategy percentages would you recommend for low to moderate risk tolerance for my TSP account? I am 57 with 27 years of FERS service. I plan to retire at age 60. I currently have $425,000, all invested in the G fund. I moved it to the G fund in October, 2009 after recouping all my losses of 2008. I figured the market would tank again and I would jump back in to take advantage of low share prices. Obviously, I was wrong. I want to get back into the riskier funds to maximize my returns without…
Q. I have read many of the articles and TSP literature and I am still a bit confused. As a federal law enforcement officer over age 55, I plan to retire later this year. I have read that if I want to take withdrawals from my TSP account prior to age 59 ½, I can do so without having to pay the 10 percent IRS penalty for early withdrawal, so long as I do it in an annuity (not interested) or, based on life expectancy (not interested as it provides more funds than I want at the beginning of my…
Q. I am retired (2008) and still maintaining my TSP fund. I don’t plan to dip into it for at least 5+ years. I am now 67 years of age (68 in July), and would like your opinion on the feasibility of moving my entire TSP holdings into the L 2020 Fund. Also, should I take that step, what are the penalties for withdrawal before 2020? A. It is possible for you to move your money into the L 2020 Fund and there are no penalties for withdrawals from the fund.
Q. On the TSP calculator “How Much Will My Savings Grow?” there is a field asking me to “Enter the number of years that you expect to keep your money in the TSP” I am trying to figure out how to answer this field. If at age 56 I choose the annuity or TSP monthly payment option, a large portion of my dollars will remain in the account. Only the monthly payments will be deducted. So, would I tell the calculator that the number of years my money will remain in the TSP would the number of years I am…
Earlier this year, many annuitants were surprised to see the size of their monthly retirement checks shrink. This happened because the formula used to calculate withholding was changed because of changes in the tax law. The change in law was not an under-the-table tax increase. Instead, the Dec. 31 expiration of the Recovery Act’s Making Work Pay tax credit caused the Internal Revenue Service to adjust the 2011 tax withholding tables — which increased the amount withheld. However, the change does not likely affect the taxes owed by an annuitant. The increased withholding rate does not necessarily correspond to an…