Q: I retire April 30 and plan to start monthly payment withdrawals from my TSP immediately to supplement a 31-year LEO/CSRS pension. I will withdraw no more than 5 percent in order to maintain, and maybe even grow, my balance. What TSP allocation amounts do you recommend for retirees to keep a steady flow of income? A: There is no single allocation that will magically support a steady income stream. The best method is to select the allocation that will most likely support your needs going forward, then monitor your progress and adjust the allocation when necessary to either reduce…
Browsing: CSRS
Q: I am CSRS with more than 30 years of service, and if I take a VERA before I reach age 55, can I withdraw money from my TSP without the 10-percent penalty? A: Unless you separate from federal service during or after the calendar year in which you reach age 55, or qualify for another exception under IRS rules, you will incur the 10-percent early withdrawal penalty. Your service time or retirement terms have no effect on the penalty.
Q: I am a CSRS employee and plan to retire Dec 31. I will meet the minimum age and years-of-service requirement for retirement. If I close my TSP account and withdraw all my funds prior to my retirement date, will I incur the 10 percent early withdrawal penalty? A: You’ll have to wait until you retire to close your account. If you withdraw your funds while still in service after you have reached age 59½, you will not be penalized for an early withdrawal. If you wait until you retire during the year in which you reach age 55, you…
Q: I am a CSRS employee with 36 years of service and will turn 55 in October 2011. If I withdraw all my TSP funds, will I incur the 10 percent penalty tax? I do not plan to retire for a couple of years. A: You may only withdraw your funds for a demonstrated financial hardship and you will incur the early withdrawal penalty.
Q: I’ve retired from the post office (CSRS) but haven’t decided just what to do with my TSP. Just to keep it safe, I’ve left all of it in the G-Fund. Do you think I should move it to one of the L-Funds. I probably won’t touch it for another year or two. A: Not until you know what to do with it, which is what a good investment adviser is for. How you prudently invest your money will depend upon a number of important variables including your age, your marital status, your health, where you live, your current and…
Q: I retired in 2008 and I am collecting my annuity from CSRS. I made a one-time withdrawal from my thrift in 2010. Can I now transfer my IRA into my TSP or am I too late? A: You may transfer money into your account.
Q: I am a CSRS employee and am going to retire in May 2012 from federal service/military service (Air National Guard) at age 55. When I retire, I want to withdraw all TSP contributions I made as a CSRS employee. I have 3 questions that I would like to get the answers to: Will I have to pay taxes on the amount (currently a little over $55,000)? Are there any penalties I will have to pay when I request a full withdrawal of these funds? What is the tax rate that I would be expected to pay if I have…
Q: I have $37,000 in my TSP L-Fund plus a $21,000 cash value on my life insurance policy. I plan to leave the USPS with 32 years of CSRS service at the age of 58. I have had a financial adviser suggest I put the combined money into an annuity-life insurance combination he says will give me a better rate of return over a period of time, without the $40 life insurance premium, for transfer of wealth to my family. I have put the extra money into the TSP to use for extra expenses after retirement (new roof, newer car,…
Q: I am a retired CSRS post office employee. I am 65 1/2 years old and have left my funds in TSP. How long before I have to start withdrawing the funds? I plan to rollover my deposit to my IRA with my postal credit union. A: You’ll have to start withdrawing funds by April 1 of the year following the year in which you reach age 70 1/2. You can’t rollover your Required Minimum Distribution (RMD) to an IRA, however, since that would defeat the purpose of the RMD, which is to collect taxes.
Q: I am a federal firefighter under CSRS Special Retirement due to retire in November of 2011 at age 50. At what age will I be able to collect on my TSP retirement? A: While you can access your TSP account any time after you retire, you’ll be subject to the early withdrawal penalty rules until you reach age 59 1/2, unless you qualify for one of the exceptions. See page 4 of the tax notice at https://www.tsp.gov/PDF/formspubs/octax92-32.pdf for details.