Browsing: income tax

Roth TSP

1

Q. Should I put some or all my TSP money into a Roth TSP? I’m almost 30, make around $59,000 a year and want to make aggressive choices so my money can grow. What should I do? A. The answer depends entirely upon your predictions about your future income tax rates.

Yearly TSP withdrawals?

0

Q. I am 56 years old and plan on retiring in October with 35 years of service. I am a civil service employee. Can I make yearly withdrawals from my Thrift Savings Plan with only taxes to pay on it? Or would I be better off taking all of it out and putting it into a bank account? I will need it for the next three years to make my house payment? A. You may not make yearly withdrawals from your TSP, but you could move your money into the G Fund and then set up monthly payments that are…

Postal disability retirement

0

Q. I am a 55-year-old postal worker of 27 years who has a work-related medical problem. Last year, I was let go on “no work available status” and have been on workers’ compensation since. I have applied for postal disability and am waiting to see what happens with that. So far, I’ve received no letter of separation nor postal job offer. Will I be able to access my Thrift Savings Plan without penalty if I become separated from the Postal Service and am granted disability retirement? A. The answer depends upon your specific circumstances. If you separate from service during the…

TSP withdrawals and tax brackets

0

Q. I am currently a GS-9, Step 1. So let’s say that when I retire, I would be a GS-15. How will my Thrift Savings Plan withdrawals be affected by the tax bracket based on my current 15 percent and, let’s say, 28 percent. A. Your TSP withdrawals will not be affected by your tax bracket. Your tax bracket may be affected by your TSP withdrawals, however. When you withdraw money from TSP, the amount withdrawn during the year is added to your gross income for that year. It is considered ordinary income. If you withdraw enough money to increase your total…

Double-taxed on CSRS payback?

0

Q. I am under Civil Service Retirement System Offset. When I took the break in service, I withdrew my CSRS funds (about $50,000; probably $60,000 or more by now). That was in 1998, so I will have to redeposit if I want it to count toward my retirement. I will be 58 next month and am considering retiring in 2013. I have been putting $600 in my Thrift Savings Plan account every payday. I can withdraw money at 59½ and not pay penalties, but it seems like I will be double-taxed. When I withdraw the money from my TSP to pay…

Taxes, penalties for cashing in TSP

0

Q: I plan to retire at the end of December 2009, and am thinking about cashing in some or all of my Thrift Savings Plan in 2010. I am on the Federal Employees Retirement System and I turned 62 this year. How much will I be penalized by TSP? I know I will pay income taxes on it in 2010, but I am wondering if I’ll get penalized, as well. A: You’ll pay taxes, but no penalties.