Q. If I want to withdraw all of my Thrift Savings Plan account at 59½, do I have to retire? Or can I keep working? A. You may take one age-based in-service withdrawal from your TSP account while you are still working.
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Q. I am an FERS employee and, for various reasons, have selected Nov. 28, 2015, as my retirement date, age 60+ with 21 years civil service and four years military, for which a deposit has been made. One of the many reasons that I selected this date was so that I could have a Thrift Savings Plan residential loan balance declared as a taxable distribution during the 2015 tax year, because I will have substantial withholdings by that time, and given my tax return history, would have a significant tax overpayment that would be useful in paying a portion of…
Q. I plan on retiring just after I turn 59 with 30 years as a federal employee. Do I have to wait until 59½ to take anything out from my Thrift Savings Plan account either via partial lump sum or monthly amounts to avoid the 10 percent tax penalty? A. Not if you wait until you’ve retired to request the withdrawal. You will be exempt from the early withdrawal penalty.
Q. I am 52 (FERS employee with 29 years of service including military buyback) planning on retiring at age 59-60. I have $400,000 in my Thrift Savings Plan account. I’m not sure that I’ll need TSP right away but want to have the option. My coworkers insist I can’t withdraw before 65, but I can’t find anything that indicates such a restriction. Are there any restrictions other than the 59½ rule that would affect me? A. No.
Q. I’m a 32-year FERS employee, 60 years old and about to retire in February 2014. I would like to take out some funds from my Thrift Savings Plan. Should I request an age-based, in-service withdrawal or take a partial withdrawal after I retire? A. Either will count as your single lifetime partial withdrawal. Will the tax cost for the withdrawal be significantly lower if the money is withdrawn in 2013? If so, you should consider taking the withdrawal now. If not, it will not really matter when you take it in 2014. If you need the money now but…
Q. I am in FERS (age 57 with 30 years). I have been offered the buyout and will have to be off the roll Jan. 31. How should I go about having a portion of my lump-sum annual leave payment go directly into my Thrift Savings Plan account? A. This is not allowed.
Q. I am a longtime CSRS employee with a pretty good Thrift Savings Plan balance. I plan to retire in two years and move to another city when I retire. My spouse is planning to retire in eight months, and we are planning to buy a house in the new city. We would like to buy the new house and begin the transition to the new city without selling our existing home until I retire. We are looking at a number of ways to finance the purchase of the new home and afford a mortgage payment on that house, a…
Q. My husband and I would like to participate in a fixed index annuity offered by a nongovernment company, but the information I gathered about Thrift Savings Plan transfers, withdrawals and annuities is confusing. It appears that if we want any type of annuity, we can only purchase if TSP does it for us, and the choices are extremely limited. Also, there seems to be no “non-hardship” type of distribution available before age 59½ that we can use to move our funds. Am I missing anything here, or are we just stuck with our limited options and no way to…
Q. I am a FERS employee and will have 30 years of service at age 56, my minimum retirement age. Thus, when I retire at 56, can I start withdrawing from my Thrift Savings Plan without any tax penalty? Or do I have to wait until 59½ to start withdrawing from my TSP to avoid any tax penalty? A. In the circumstance you describe, your TSP withdrawals will not be subject to the early withdrawal penalty.
Q. I am a FERS employee who turned 71 in September. I plan to retire in January 2015. When do I need to start taking my required minimum distribution? A. Under the current rules, and these circumstances, your first RMD, for tax year 2015, will be due by April 1, 2016.