Q. I think I will be retiring Dec. 31, 2015 (under FERS) since my minimum retirement age is 56, and will reach it on Dec. 21, 2015. I will have 31½ years in federal civilian service. Can I start my Thrift Savings Plan monthly allotments right away (I have over $390,000 as a balance as of today) to supplement my 31 percent of salary from FERS retirement and special retirement supplement? A. Yes, you will be able to begin withdrawing from your TSP account as soon as TSP receives notice from your agency.
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Q. I am married, 60 years old and a FERS employee. I am not sure when I plan to retire, but I have a Thrift Savings Plan account and other investments. I would like to transfer as much as I can to the TSP account to have the best return. How will I be taxed on the money if it is going from one investment company to my account and then directly into TSP? Will it be taxable income for 2014 even if it was just a transfer? A. Transfers from a retirement plan account into the TSP are not taxable.
Q. I’m planning on retiring this year at age 62 under FERS. I will have an outstanding Thrift Savings Plan loan balance of $16,000 and was not planning on repaying the rest of the balance and was needing to find out if the outstanding balance will be considered income and taxed with my other income for the year at the end of the year, since it will be tagged as taxable distribution? A. Yes, any loan balance outstanding 90 days after separation will be declared a taxable distribution at that time and reported as ordinary income for that year.
Q. My wife is a federal employee with 28 years of service and is covered by FERS. She plans on retiring soon, and we have heard that she can take funds (post-tax) and dump them into the Thrift Savings Plan equaling the cumulative difference through the years of what she was unable to put into the TSP. Can you shed any light on this info? A. You may not ever deposit post-tax money into a TSP account, and, except for Federal Erroneous Retirement Coverage Corrections Act cases, there is no provision to make up past contributions that could have been…
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. Are TSP lump-sum withdrawals considered earned income for the purposes of the earned income test for FERS disability retirement? A. TSP withdrawals are not considered earned income.
Q. I have an opportunity to retire under a Voluntary Early Retirement Authority. I have 30+ years of FERS service, non-law enforcement. My age will be 53 years and 11 months if I retire under this VERA offering. At what age will I have full access to my Thrift Savings Plan without the 10 percent early withdrawal penalty by “taking substantially equal payments over my life expectancy.” At what age will I have full access to my TSP without the 10 percent early withdrawal penalty by NOT “taking substantially equal payments over my life expectancy.” If immediately upon retirement I…
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 will have worked four months short of the five-year mark when I leave the government to care for my aging mother. Can my FERS money be rolled over into my Thrift Savings Plan? A. No.