Q. I will be 55 this month and plan to retire in November with 33 years of service under CSRS. Do I have to wait until I am 59½ to withdraw from my Thrift Savings Plan? A. Not if you wait until you’re retired to request the withdrawal.
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Q. I retired from the federal government under CSRS. I turned 70½ years old in May. I have $40,000 in my Thrift Savings Plan account. I am thinking about withdrawing all of my funds in a lump sum. Is this a good idea? How will this affect my tax obligations? What do you recommend? A. The money you withdraw from your TSP account will be counted as ordinary income for tax purposes. If you need the money, then fine. If not, you should leave it in the TSP for as long as possible.
Q. I understand there is a way to roll over a Thrift Savings Plan account to a Roth IRA so the funds transferred are not taxed. Can you point me to guidelines on how to do that? I am preparing to retire as a CSRS annuitant. A. This is only possible with a Roth TSP balance.
Q. I am a CSRS postal employee retiring at age 56 with 38 years of service. Can I withdraw from my Thrift Savings Plan without penalty? A. After you retire, yes.
Q. I’m planning to retire Jan. 2 and would like your suggestions as to what to do with the $165,000 in my Thrift Savings Plan account. I thought about transferring the money from the TSP, buying an IRA and letting it remain there for a couple of years since do not think I will need the money at the present time. I am 63 years old and covered under CSRS. Any suggestions as to what to do with the money and the best company or companies to purchase an IRA would be greatly appreciated. A. The TSP is the best…
Q. I am a CSRS employee. I have decided to take the Voluntary Separation Incentive Payment and should be off the rolls by March 31. I am told that I can put in 10 percent of my basic total federal wages (could be in excess of $200,000) into the Voluntary Contribution Program and I should withdraw all of it when I retire. I am also told that I can deposit this withdrawn VCP money into a Roth IRA, which is the main reason I want to do this. Are my assumptions true? If it is, how can I open a…
Q. If I take money out of an IRA to make a redeposit into CSRS, do I have to pay taxes on the money taken out of the IRA? A. Yes.
Q. I retired in 2010 and, at that time, I was informed that I was in the wrong retirement system (FERS). I chose to be put in the proper program (CSRS Offset). I was also told by my human resources manager that, since I was in retirement, I would be able to keep all of my Thrift Savings Plan contributions, including the agency’s matching contributions. On Dec. 3, the agency forfeited about a fourth of the value of my TSP account, without any notification that this was going to happen. Is this a legal action? Why was I not informed…
Q. I am the 401(k) specialist for our tribal government. We have a former employee who wants to roll over his 401(k) into making a deposit in CSRS. Is this possible? A transfer from CSRS into a 401(k) is not allowed, so should his attempted rollover be allowed? A. This is not allowed. CSRS deposits are made with after-tax money.
Are you planning to retire soon? If so, you’ll need to figure out whether you’re financially able to make it work in the near and the distant future. Because there are few, if any, truly reliable financial guarantees, this can be a difficult thing to determine. The essential question is this: “Will I have the resources — usually cash — available when I need it to support my desired standard of living for the rest of my life?” If someone else is depending upon you for all or part of their financial support, your retirement decision will affect them, as…