Q. I am a retired federal worker. I am in the Federal Employees Retirement System, a Thrift Savings Program participant, and, because I am over 70½ years old, I have been taking my Required Minimum Distribution in the form of monthly payments based on my life expectancy. I also have a traditional Individual Retirement Account with my local bank. I also have a Roth IRA at this bank. I want to consolidate some of my funds and increase my monthly payments by transferring my traditional IRA to my TSP account. I was told by the bank that the time for…
Browsing: 70 1/2
Q. 1 will turn 70 in July 2012 and would like to know when I must begin withdrawing from my TSP and is there a certain amount that I must withdraw? A. Since you will not be 70½ until 2013, your first withdrawal will be due by April 1, 2014, the year after the year in which you reach age 70½. This withdrawal will be for 2013, and your subsequent withdrawals will be due by Dec. 31 each year beginning with 2014. The minimum amount due each year is a moving target based on your life expectancy. Fortunately, the TSP…
Q. I’m a widower retired on CSRS with a pension that provides me with enough to live on. I’ll turn 70½ in 2012 with about $200,000 in my Thrift Savings Plan. Starting in 2012, I plan to take the required minimum distribution from my thrift plan each year. The question is how to allocate my money in TSP — which plans to put my money in. A. The answer depends upon your goals for the money, and how important it is that it achieve those goals. Your question is like asking which way you should turn the wheel in a…
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…
Q. If I have more than 240 hours of annual leave when I retire, will I be allowed to cash that amount in also, or will I have to take the leave before retirement? If I retire at the end of a calendar year, will I be able to cash in my annual so that it is taxed the following calendar year? Does this also apply to TSP? A. You may delay your TSP withdrawals for as long as you like, subject to the Required Minimum Distribution rules that apply beginning at age 70½.
Q. I plan to take an early out (Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay) effective Aug. 31, 2011. I am under the Federal Employees Retirement System plan. At the time of my retirement, I will be 54 years old. I have read that if you retire before age 55, your withdrawal/rollover is subject to a 10 percent penalty. I have also read that any action can be postponed, but postponed to what age? 55 or 59.5? Does this mean I cannot withdraw and/or roll over to an Individual Retirement Account until I reach age 59.5? I don’t understand why I would have…
Q: I am 65 and plan to retire next year. When I turn 70½, will the dollars I have in TSP at that time be automatically included in the Federal Tax “Required Minimum Distribution” (RMD) calculation? A: I’m not sure that I understand your question. The TSP will remind you before your withdrawals must begin, but you must initiate the withdrawals. The TSP will automatically calculate the distribution amount if you select monthly payments based on your life expectancy.
Q. I am 73 years old and still working for the government. Am I still required to remove funds from TSP even if working for the government and depositing TSP funds with them? A. No.
Q. I am a widow, CSRS, retired. I will have approximately $55,000 (before taxes) when I am 70 1/2 (January 2017). My birthday is July 1946. I am a widow; file single; do not want an annuity. I know my circumstances and the law could change a lot before then. Would they take 20 percent or 30 percent before giving it to me? Any suggestions? A. Under the current rules, if you take a required minimum distribution as a single, partial withdrawal, it will be subject to 10 percent tax withholding unless you elect to have a larger amount withheld. If…
Q: I retired from Federal Service under FERS at the end of May of this year with 24 years of service. I also turned 70 in early May of this year. My plan had been to purchase a lifetime annuity through TSP (METLIFE) in August of this year as annuity interest rates had typically been higher in August for the past few years (2006, 2007, 2008 and 2009). Unfortunately the rates have steadily decreased since my retirement and are now down to 2.750 percent, which is equal to the low of March 2009. Obviously this was not a good time…