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…
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Q. Effective Feb. 29, 2012, I am a CSRS retiree from federal service; I participated in both the Thrift Savings Program ($201,000), and the Voluntary Contributions Program. I must make an election soon of the funds now in the VCP: $87,637 (nontaxable); $34,682 (taxable). I am married, and I will be 66 years old in October. I (we) do not foresee needing the money from these two sources in the near term. I will likely convert everything to a traditional IRA then Roth IRA in April of the year after I turn 70½, to be left to my son after I…
Q. I am 69 and have annuities and some IRAs. When I bought them, I assumed that I would need them when I retired. Fortunately, my luck has made it possible that I do not need to start getting these annuities at 70½. How can I save this money for my daughter to inherit without paying taxes? A. Are the annuities qualified or nonqualified?
Q. My mom, who doesn’t know English, turned 70½ on Aug. 4, 2011. She has IRAs at two different places: Vanguard and Bank of America. My mom has already satisfied her 2011 Vanguard required minimum distribution before April 1, 2012, because it was her first RMD. The Vanguard 2011 RMD was calculated by Vanguard and mailed to my mom, by the way. Was she also required to take a Bank of America RMD? If so, oh no! What’s the best way to proceed? A. In general, an RMD must be calculated for each IRA, and the total RMD for all…
Q. I retired as a CSRS employee after 31 years of service. I will be 70½ in June and, as I understand, I will have to begin taking out from my Thrift Savings Plan account then. If I am reading the information correctly, I have until April 2013 to do this. If so, when is the deadline for me to send in my request for withdrawals? Also, I have checked the TSP forms on the website but could not determine the appropriate one to use. I am planning to take out my TSP savings in monthly withdrawals. A. Your first required…
Q. I retired from the Department of the Interior on Dec. 31, 1997, and left my Thrift Savings Plan intact until 2003, when I rolled it into a traditional IRA. On the paperwork for the rollover transaction, I find no reference to TSP contributions versus TSP account balance. As I approach age 70½ next year, I realize that I need to know what my contribution (or basis) was. I have filed with the Internal Revenue Service for a tax extension in the hope that I can retrieve contribution/basis info from TSP archives and accurately represent the TSP account in my total IRA…
Q. If I am still working full time for the Veterans Affairs Department at 70½, do I have to take a minimum distribution from my TSP account? A. You don’t have to begin distributions from your TSP until you stop working for the government.
Q. I reached my 70th birthday in November. When must I start taking payments from my account? A. If you are separated from federal service, you must take your first required minimum distribution by April 1, 2013. If you’re still a federal employee, you can wait until after you leave service.
Q. I reached age 70½ in 2011, therefore must make my initial required minimum distribution from my Thrift Savings Plan account before April 1. Which table should I use to determine my RMD? My spouse is my only beneficiary and is more than 10 years younger than me; so, it seemed to me that the appropriate table is the Joint and Last Survivor Table. However, two different TSP customer service representatives have informed me that I must use the Uniform Lifetime Table, and that only those who have established annuities within their accounts (which I have not done) are permitted…
Q. I am a Civil Service Retirement System employee, hired in 1979 and contemplating retiring April 3, 2013. 1. I will be subject to the windfall elimination provision because I earned 40 credits of Social Security eligibility prior to my federal employment. But my spouse is also eligible for Social Security and started receiving Social Security benefits of more than $1,900 a month (gross) starting last month (January 2012), whereas the Social Security Administration has estimated that my Social Security benefits would be approximately $385 a month (gross). Would I be eligible for spousal Social Security benefits? 2. A financial planner…