Q. What is the definition for the Thrift Savings Plan early distribution exclusion “made as a result of total and permanent disability”? Does this mean that a retired military member with a Veterans Affairs Department-certified disability who is under age 55 is excluded from the 10 percent early withdrawal penalty? Specifically, I would like to withdraw my TSP in full upon military retirement at age 42 and will most likely have a portion of VA-certified disability based on injuries sustained on active duty. What justification is needed to report to the Internal Revenue Service when you file your taxes? A. I…
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Q. Is there a limit to the number of rollovers that can be made from a single, traditional IRA to the Thrift Savings Plan? In other words, can I roll over my previous years’ deductible IRA contributions to my TSP account each year? A. I know of no limit.
Q. If I leave the Thrift Savings Plan funds in TSP after I retire, I assume I am required to take required minimum distributions. Is this correct? If I leave the funds there and name trusts as beneficiaries, can a beneficiary then move the funds to an inherited stretch IRA after I die? A. Your TSP account is subject to RMD requirements once you reach age 70½ and are separated from federal employment. There is no simple, universal answer to your trust beneficiary question. It depends upon the trust, and you should consult an estate planning attorney before going down…
Q. Someone had a recent question about Thrift Savings Plan fund investment options in a speculative market, and I noticed in reading some of the comments at blog.federaltimes.com, a recommendation of “What’s safer than either the G or F Funds, alone, is a combination of all five funds at once. Without stocks, how are you going to hedge the risk of owning the G and/or F funds?” Doesn’t being in one of the L funds do that for you? Also, would you move your TSP funds out of the TSP at retirement into an IRA? A. Yes, the L funds…
Q. I am a 64-year-old CSRS employee. If I transfer some of my Thrift Savings Plan into an IRA with a private company, does it need to go into a traditional IRA, or can it be transferred into a Roth IRA? A. It can go into either, but check with a CPA before proceeding.
Q. I will be retiring Jan. 31 from the Postal Service. In May, I will receive $10,000 and in May 2014, I will receive $5,000. Can this compensation be used to fund an IRA in years 2013 and 2014 even though I will be retired and not working another job? Is this considered earned income? I know federal and state tax will be deducted. I don’t know yet if Social Security will be deducted, too. What are your thoughts on this? A. I believe that these payments are considered retirement income, and, therefore are not considered the basis for IRA contributions, but you should consult…
Q. Can Thrift Savings Plan funds be rolled into an IRA? A. TSP cash can be rolled over to an IRA. The fund shares themselves cannot.
Q. I received a disability retirement four years ago. I had 25 years of service and will be 57 years old in February. I have rolled over my Thrift Savings Plan. At what age can I start receiving it? A. You can withdraw money from an IRA at any time.
Q. I am a CSRS employee planning on retiring at age 55. I also have been paying into the Thrift Savings Program. Will I be able to withdraw from TSP when I retire at age 55 without penalty? A. Yes.
Q. I recently retired (CSRS, law enforcement) and am trying to decide whether to leave my money in the Thrift Savings Plan or roll it over into a privately managed IRA portfolio including diverse programs that will meet my goals of growth, income, annuities and a certain amount of liquidity. If my TSP portfolio is diversified to meet the above goals, if you compare apples to apples, is the TSP considered better or worse (value performance, management, fees) than rolling into a privately managed portfolio (with a broker I trust). A. TSP is the best retirement investment vehicle there is.…