Browsing: conversion rule

VCP Roth conversion follow-up

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Q. This is a follow-up to a prior question. I had asked whether converting my Voluntary Contributions Program account to an existing contributory Roth IRA would be taxable in light of the fact that I had pretax money in the Thrift Savings Plan. You had advised that it appeared to be a nontaxable event but that I should check with my CPA. I do not have a traditional pretax IRA. My CPA didn’t know anything about it, so I asked an expert in the field. The expert cautioned me not to roll over my pretax TSP into a traditional pretax…

Converting TSP to Roth TSP

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Q. As a retiree, can I convert my Thrift Savings Plan account to a Roth TSP, or is this only available to active employees? A. You may not convert traditional TSP balance to the Roth TSP, regardless of your employment status.

Refinancing and VCP

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Q. I am a 59-year-old federal employee with 34 years of service under CSRS. I am retiring soon and heard about the Voluntary Contributions Program. I don’t have a wad of cash except accessing some of the equity in my home (I have about $200,000 of equity, and I could pull up to $100,000 out).  Is it worth refinancing (at a low 3.5 percent) to access the money and use the VCP to convert it into a Roth IRA? A. Probably not, unless you need the cash for expenses.

Roll over TSP to Roth TSP?

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Q. Can I roll over the funds in my traditional Thrift Savings Plan to the Roth TSP? I thought I had read that you couldn’t, but I see where you can roll over from a 401 plan, so it would make sense and just pay the taxes this year on the whole amount. A. You may not convert traditional TSP to Roth TSP money.

Converting TSP to annuity

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Q. I am a U.S. Capitol Police officer. I plan to retire in 2014 at age 55, although I can stay until 57. If I convert my TSP funds to an annuity, will I be able to draw on it right away? If not, when? Will I be penalized prior to age 62? A. If you retire during or after the calendar year in which you reach age 55, you will be exempt from the early withdrawal penalty for all of your TSP assets as you withdraw them and may take them within the usual TSP limits, including using some or all…