Q. I received a disability retirement four years ago. I had 25 years of service and will be 57 years old in February. I have rolled over my Thrift Savings Plan. At what age can I start receiving it? A. You can withdraw money from an IRA at any time.
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Q. I retired as a FERS employee in July 2011 under a Voluntary Early Retirement Authority. I was 56½ with 28 years of service. During my years of employment, a Roth TSP option was not available. Therefore, all of my Thrift Savings Plan money is in a non-Roth/traditional account. I would like to use partial withdrawals to move this money into a Roth IRA. I know I must pay taxes but wondered if I must wait until I am 59½ to avoid penalty? I see references that a 10 percent penalty may not apply in the case of VERA and…
Q. If I cash out my Thrift Savings Plan now that I am retired, will that income disqualify me from getting the retirement supplement? I am 61 years old and had 27 years in. A. No.
Q. I am taking the Postal Service Voluntary Early Retirement Authority on Jan. 31. I’ll be 56 then. I’d like to take a full withdrawal from my Thrift Savings Plan in monthly payments and then possibly roll the balance into an IRA at age 59½. I understand that 20 percent will be withheld automatically from my monthly payments for taxes. If I withdraw the balance a few years later, will the 20 percent figure still apply, or can I roll it into the IRA without the tax hit?
Q. In January 2011, I was forced into retirement at age 62 due to a surgery that left me visually impaired. I took a partial withdrawal to pay off personal expenses. The Thrift Savings Plan deducted 20 percent for federal taxes before the distribution was made. However, when federal taxes were filed jointly, I owed $16,000 in taxes due to the TSP money. Why did I pay taxes twice when I met the 59½ age rule? A. That’s a question that only your tax-preparer can answer, although I doubt you paid taxes twice, and there would have been no early withdrawal…
Q. There is around a $5,000 annual limit to a Roth IRA based on income and age. Does that limit apply to TSP? In other words, can I put all $17,500 plus the $5,500 catch-up contributions for those age 50 and older into the Roth TSP and pay taxes on it now, rather than later regardless of my income? I am a civilian over 50 years old in FERS. A. The Roth IRA limit does not apply to Roth TSP contributions.
Q. I just started a Roth TSP and wondered if there was a five-year waiting period to start drawing it out? I am almost 61 years old. A. Yes, the five-year rule applies to Roth TSP withdrawals.
Q. I plan to retire in 2013. I am 58 years old. If I want to pull from my Thrift Savings Plan will I have an early withdrawal penalty? A. No.
Q. I am an unmarried federal employee. I max out my contribution to the Thrift Savings Plan. I plan to work until at least 62, which will give me 21 years of service, or possibly until 65 with 24 years. As a federal employee in FERS and with TSP, what is the best way to provide income for two siblings when I die? I am not opposed to taking a reduction in monthly benefits if that is the best way to do so. My home will be paid off in 2014. I have no other debt and live on about…
Q. I am a firefighter with a county fire department in Florida. As such, I am part of the Florida Retirement System in the special risk class. I started my career early and will be eligible for retirement with full benefits and no FRS penalties by age 48. (This is 25 years of service.) However, because of the Internal Revenue Service penalty for retiring before age 50, I would receive a 10 percent tax penalty in addition to the normal taxes I will pay on my retirement income. I understand that I will receive the penalty of 10 percent. However,…