Q. I am going to retire within the next three months. I have done my homework but am torn about my TSP. I don’t know what is the biggest bang for my buck — roll over my TSP into another investment (not knowing which one yet) or to leave it where it is. Since this will be part of my retirement, I want to pay as little as possible in maintenance fees. My fear is that the new MyIRA could be looming over my TSP. I do not want to invest my hard-earned money into worthless government bonds. It is…
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Q. My wife is looking to retire and back in the late 70’s and early 80’s she worked under CSRS for about 21 months. Her Veterans Affairs retirement adviser said she could buy back these months. She worked for a private hospital and had a “matching” IRA set up in the early 90’s. Can she use this IRA money to buy back the CSRS time? She never added any money to this IRA after she left the hospital and the amount has slowly grown over the years to about $14,000. A. She can only use it for the re-deposit after…
Q. I am working for the Veterans Administration and I have a TSP account. When I retire, do I have to roll over to IRA to withdraw money or withdraw from TSP? A. You do not have to roll over your TSP account to an IRA, and may (and should) maintain and manage it for as long as you live.
Q. While still employed in the federal government, can I re-deposit the money I have withdrawn to an outside IRA back into the TSP prior to full retirement? A. You may transfer an eligible (contains no after-tax money) IRA balance into your TSP account at any time.
Q. My husband and I are 51. We will retire in about 10 years. How do we find the right financial advisor that will help us understand what we need for retirement, and what we need to do if we won’t have enough to meet our needs?
Q. My daughter is 20 and just entered the military, hopefully to make a career of it. She is contributing 10 percent to her traditional TSP and $25 per month to her Roth TSP. Her traditional TSP is fully invested in the G Fund (this was automatic and she didn’t know enough to change anything). Wouldn’t it be better for her to put the maximum amount she can afford into the Roth TSP before putting anything into the traditional? She will probably be making quite a bit more money when she retires than what she makes now. If not, what…
Q. I retired in December at age 60 under FERS and my TSP is in the L fund because I plan to start drawing down to supplement my pension. My plan is to withdraw 4 percent per year based on a rate of return of 4.46 percent. The amount of my account is $249,972, which has not been touched yet. I’ve sought the advice of several financial planners who have consistently advised me to roll over my account into a self-directed IRA due to the risk of interest/inflation’s effect on the bonds in the L portfolio, as well as the…
Q. My mother recently passed away and left me $30,000 from her traditional IRA. Can I transfer this to my TSP? Would there be any penalties or tax hits? A. Special distributions rules apply to a Beneficiary IRA account, and it is not eligible to be transferred into your TSP account.
Q. Since catch-up contributions must be renewed each year, is it possible to make non-payroll cash contributions? Or are all non-IRA rollovers required to be payroll contributions? A. You may not make direct contributions to your TSP account. The only way in is through payroll deferral or transfer from an eligible retirement account.
Q. Can you please provide a citation to your assertion that an annual leave payout is not considered earned income and cannot serve as the basis for IRA contributions? A. See the sections on what is, and what is not, compensation on Page 8 of IRS Publication 590. I believe it is considered deferred compensation, but in the end, how you should proceed is a question for your tax preparer.