Q: I am a Federal Employees Retirement System employee retiring on April 30, under the Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay at age 55. Can I take some or all of my Thrift Savings Plan balance and transfer it to a self-directed individual retirement account? What is the process for doing that? What are the estimated costs and penalties? A: You may roll over your TSP assets to an IRA following separation at at 55 with no penalty. Use Form TSP-77 to request a partial withdrawal or Form TSP-70 to request a full withdrawal of your account assets.
Browsing: Individual Retirement Account
Q: Both my wife and I contributed to a Thrift Savings Plan and an individual retirement account for the 2011 tax year. We filed jointly. My wife maxed out her TSP contributions, but I did not because I was hired midyear. We both maxed out our IRA contributions at $6,000: her to a Roth, me to a traditional. When using an electronic filing program, the software would not include our IRA, but it did so when I ran a fictitious sample filed as a single. Why did the program not deduct the IRA? Is a simultaneous deduction for TSP and…
Q: I understand that when an federal employee, through a rollover, transfers funds from an individual retirement account to the Thrift Savings Plan that the money transferred can only be pre-tax. My wife has both pre-tax and post-tax contributions in the same IRA. The IRA has grown for 20-plus years, so a lot of its value has had no tax has paid on it. Most of what I have read on the issue seems to indicate that because the IRA has some after-tax money in it, none of the money can be transferred into the TSP even though the amount…
Q: I’m a Federal Employees Retirement System retiree, 70 1/2 years old, and have been receiving fixed monthly payments from my Thrift Savings Plan account to cover my living expenses since my retirement in 2006. I will begin required minimum distributions this year and would like to know if the IRS will allow the amount of my annual TSP withdrawals that exceed my TSP yearly RMD to be credited against the RMD requirements due to start this year for the standard individual retirement accounts I hold from credit unions, banks, etc. A: Your RMD must be calculated separately for each…
Q: I am a 52-year-old law enforcement officer, 6(c) designation, and retired under the Federal Employees Retirement System this past year. Although I thought I had a good handle on this from your website, I am confused by a retirement guide an LEO put out indicating the following: “If you continue your agency employment at least one day into the calendar year of your 55th birthday, you may make unabated penalty-free withdrawals from your TSP account upon retirement. You cannot roll over your TSP and make penalty-free withdrawals at 55.” The first part indicates than an LEO must work until…
Q: My wife retired in February. Our current plan is to take $50,000 from her Thrift Savings Plan to pay off some high-interest debt and leave the rest in the TSP to be invested into a monthly annuity. Is this allowed? Does she have options as to what annuity the money is invested in? Is their an option for a lump-sum survivor payment of the unpaid balance at the time of death? How does she proceed with implementing her final decision? A: She may take one partial withdrawal from her account, if she hasn’t already done so. She may also…
Q: I will inherit approximately $40,000 because of the death of a family member. What is the best way to get this money into my Thrift Savings Plan account? A: If these funds are not already in a traditional individual retirement account or other eligible tax-deferred retirement plan account, you can’t add them directly to your TSP account. You could use these funds to support a higher regular contribution rate, if allowed, to your TSP or a traditional IRA. As long as the IRA contributions are tax-deductible, you can transfer the funds into your TSP account later.
Q: Can money in my Thrift Savings Plan account be rolled over into a Roth IRA, and if yes, what are the rules and when can it be done? A: Yes, certain TSP distributions are eligible to be transferred or rolled over to a Roth IRA. The TSP notice available here will introduce you the rules and limitations.
Q: I am under the Federal Employees Retirement System and have money in the Thrift Savings Plan. I returned to government service after 16 years in the private sector (I was under the Civil Service Retirement System from 1975 to 1987 but was placed in FERS in 2004 when I returned). I have retirement accounts outside TSP, but I find TSP to be easy to manage. I have considered transferring my other 401(k) accounts into TSP, but I have also heard concerns that Congress may target TSP as a source of “revenue.” I will be considering retirement in the next…
Q: I read the latest article from Mike Miles in Federal Times and I have a question: I am a Federal Employees Retirement Service (law enforcement officer) employee, and I max out my Thrift Savings Plan contributions. Can I contribute to an outside-brokerage individual retirement account ( I meet the Roth requirements) and if so, what is the cap for that yearly? A: Yes, you may contribute to a traditional IRA, and the limit under current law is $5,000 if you’re under age 50; $6,000 if you’re 50 or older. Some or all of your contribution may be taxable, depending…