Q. I am 73, retiring March 1. Is it possible to transfer or rollover my entire Voluntary Contributions Program balance into my Thrift Savings Plan account at my age? A. Only the untaxed earnings may be rolled over into your TSP account. The contributions may be rolled over to a Roth IRA account.
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Q. I am 37 years old, invested 100 percent in L2030. I have 25 years left to work, and I’m happy with 5 percent growth. I’m afraid of sequestration effects, so I’m planning to move 100 percent into G fund this week. I will move it back into L2030 after sequestration, when it posts three months of positive share price gain. Good plan or bad? A. Bad.
Q. The Thrift Savings Plan allows contributions this year of $17,500 plus a $5,500 catch-up, whether to Roth or traditional IRA. Internal Revenue Service rules also allow (for certain income brackets) a Roth contribution of $5,000 plus $1,000 catch-up. Can a person over the age of 55 make the $6,000 Roth contribution allowed under IRS rules to a secondary Roth IRA and still make the difference ($13,000) in a contribution to the TSP? A. You are always free to make the full Roth TSP contribution. It’s your eligibility to make the Roth IRA contribution that may be limited, depending upon your tax…
Q. I am separating from the military in January 2014. From there, I will be pursuing my education. I will be 60 in 2042. My Thrift Savings Plan is 100 percent G Fund. I stopped my TSP contribution and started the Roth TSP because I like the idea of not paying tax when retirement comes. I am aware that the account needs to be in place for five years and can only be withdrawn at age 59½, and that the money is deducted from taxed income. Is this a wise decision? Since my traditional TSP can’t be transferred to TSP…
Q. I’ve been retired a couple of years now and I’ve transferred the money I had sitting in the G Fund to one of the L funds. I chose the L 2020 fund, mainly because I’ll turn 70 in five years and will be forced to start withdrawing the required minimum distribution. I’ve read that you suggested putting money into the L Fund that closely corresponds to one’s life expectancy. Does that mean how long I plan to live, or is that determined by a doctor or some other expert? A. If you’ve had a full physical exam within the…
Q. I am 62 years old and still a federal employee (for the next several years). I am thinking of withdrawing $100,000 of the $250,000 I have invested in Thrift Savings Plan. The purpose behind this withdrawal is to save paying federal taxes on this amount. That is, we will be selling an investment property that has $100,000 in “unrealized tax losses” and we should be able to offset the taxes owed on the $100,000 TSP withdrawal with the $100,000 loss from the sale of the property. I am confused by a statement on the TSP website that says if…
Q. I am an active federal employee, over 70½ in age. Am I required to start my Thrift Savings Plan required minimum distribution withdrawals, even though I am not retired? A. No.
Q. I am 55 years old and in the process of obtaining Postal Service disability. I want to know the tax ramifications if I withdraw my Thrift Savings Plan at 55 after separating from service. I will have 24+ years in. I have $200,000 and want to make monthly payments, not based on life expectancy. I want to withdraw $1,000 a month at 55 for 25 years or so until it is depleted. Am I subject to any additional penalty taxes? I called TSP and the Internal Revenue Service and was told that because I am spreading the monthly payments over 10 years, they would…
Q. I am planning on doing an age-based in-service withdrawal of all of my funds prior to retiring. I have a 10 percent contribution going into my Thrift Savings Plan account. Do I need to stop the contributions before withdrawal to make sure no more funds are put into my account after the fact? Or are they automatically turned off once my request is processed? A. You’ll need to stop your contributions.
Q. I am a federal firefighter and a FERS employee. In 2022, I will have 21 years of creditable service and four years of bought-back active military time and be 48 years old. 1. Will I be able to retire under the provisions of 25 years of service at any age? 2. Will I receive the special category retirement percentages (1.7 x high-3 x creditable service, etc.)? 3. Will I receive the special retirement supplement until 62? 4. Will I not be able to withdraw any Thrift Savings Plan annuities until 62? A. Reg: 1. No, you won’t be able…