Q. I want to retire at age 58 and begin tapping my Thrift Savings Plan. I will have 15 years of federal service time. What can I do to avoid paying any penalty? A. Since you are retiring during or after the calendar year in which you reach age 55, your subsequent TSP withdrawals will not be subject to penalty.
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Q. I realize that the withdrawal of Roth earnings have different implications. But if I understand this correctly, the withdrawal of Roth IRA contributions can be done at any time without triggering a taxable event or penalty. Is the same true for the withdrawal of contributions from the Roth TSP? A. You may withdraw Roth funds without tax or penalty if you’ve had a Roth IRA for at least five years (starting from Jan. 1 of the year you first contributed to a Roth IRA) and you are at least age 59½. The same rule applies to your Roth TSP…
Q. I turned 70 years old in July and have been a CSRS retiree since 1997. I started the required minimum distributions in September 2012 from the Thrift Savings Plan and an IRA with DWS Scudder. Monies were invested in the G Fund with TSP and the DWS GNMA S Fund, which are very low risk. Before retirement, I felt more comfortable taking risk. I started withdrawing RMD only because I had to avoid penalty. My main concern at this stage in my life is to face as little risk as possible and to at least maintain my balance with minimum losses. My IRA…
Q. 1. I am retired at 52. If I take a life expectancy withdrawal through the Thrift Savings Plan from now until I reach 59½, can I then roll over the balance of my account to a privately held traditional TSP such as Vanguard? Or does taking the life expectancy withdrawal through the TSP commit me to them for life? 2. If I receive life expectancy withdrawals now through the TSP, can I still take a partial withdrawal (amount of my choosing) when I am 59½ without the 10 percent penalty? 3. If I roll over my entire TSP account now to a…
Q. I am 56 years old and I work for the Department of Justice. I expect to retire in the next year under CSRS. I have approximately $300,000 in the Thrift Savings Plan. I would like to withdraw $100,000 when I retire at age 57 to pay off a mortgage, and keep the remaining funds in TSP until I am 70. Is there any way to withdraw $100,000 before I am 59½ without sustaining a tax penalty? A. Yes. If you separate from service during or after the calendar year in which you reach age 55, your TSP withdrawals will be…
Q. Thank you for your answer on my question of investing my 100 percent G Fund into an L Fund. You recommended choosing an L that corresponds to my life expectancy. I expect to retire in about a year, will have about $500,000 outside of the fund after I transfer my 401(k) into the fund. My FERS will be about $1,000 a month, and I will defer drawing Social Security until after 67, maybe wait until 70 (I am 64). The issue is life expectancy. Our family tends to live into its 90s. I am thinking that the L2020 may…
Q. I am 62 years of age and have been in civil service for 12 years. Can I withdraw a portion of my Thrift Savings Plan funds prior to retiring and leave the rest in? If so, I realize I will have to pay tax on the amount withdrawn (but not sure how much), but will I have to pay a penalty? Also, can you direct me on where to go to do a withdrawal? I am currently in Okinawa working for the Marines. A. You may take one age-based, in-service withdrawal, which will not be subject to an early withdrawal…
Q. If I retire early at 50 years of age with 30 years of service under FERS, I understand I’d have to wait until my minimum retirement age to receive the special retirement supplement. What reductions would I have in my retirement annuity? Would I be able to receive monthly Thrift Savings Plan annuity at age 50? A. Mike: You may use your TSP money to buy an immediate annuity and receive monthly income payments at any age, once you are separated from service. Reg: If your agency offers you a Voluntary Early Retirement Authority, there wouldn’t be any age-based…
Q. I worked for the Department of Justice from 1989 to 2003 under FERS. I have worked in the private sector since that time. I will be 62 in 2015, at which time I think I qualify for a retirement annuity. Can I do all of the following: 1. Receive a FERS annuity based on my high-3 salary; 2. Continue to be employed in the private sector; and 3. Leave my Thrift Savings Plan money where it is for now. Is there any reason not to do this, or any value in deferring this? My impression is that the annuity…
Q. When I left federal service in 2001, I rolled over my Thrift Savings Plan savings to a private investment firm. Subsequently, I returned briefly to federal service and accrued enough money in my TSP account to permit me to return funds to the TSP from a private-sector financial manager. Should I do this? I am about to turn 65. A. The TSP is best retirement investment environment you’ll find. If it were me, I’d choose the TSP over a bank or broker any day.