Q. I am a retired CSRS employee, age 62. I am considering converting my Thrift Savings Plan balance of about $205,000 to an IRA with Fidelity. What are the advantages and disadvantages of making this conversion? What considerations should I look at? A. The disadvantages include higher costs, greater complexity and the loss of access to the G Fund. The advantage might be more flexible withdrawal options. I recommend against this move unless, for some reason, you have no choice.
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Q. I know I can move my money in the Thrift Savings Plan to an IRA (I’m retired) and pay no taxes doing so. But can I move my TSP to an IRA outside of the U.S. and still not pay any taxes during the transfer? A. An IRA as established by the U.S. tax code outside the U.S.? I’m not sure how that is even possible.
Q. Can Thrift Savings Plan funds left to a beneficiary be stretched as they can in an IRA? A. Yes. See the brochure at https://www.tsp.gov/PDF/formspubs/tspbk31.pdf for more information.
Q. I attended a seminar given by MetLife Financial people about Roth TSP, IRAs, etc., and was told that even if I am working at 70½ and not retired that I still have to make a withdrawal of my TSP percentage. However, in the booklet “Withdrawing Your TSP Account” on Page 3 under withdrawal deadlines, it states in the second sentence: “If you are still a Federal employee employed at 70½, your required withdrawal must be by April 1 of the year following the year you separate.” I told the lady what our TSP booklet said, but she said it…
Q. I have the same question as I found on your site: “Q. I would like to take a portion of my Thrift Savings Plan balance and transfer it to a self-directed IRA. What is the process for doing that? What are the estimated costs and penalties? A: In your circumstances — actively employed and younger than 59½ — the TSP won’t allow this.” But I am 61 years old and in civil service for 34 years. You imply in the above answer that over 59½ might be OK. Do you recommend this, or can there be possible problems? A. You could…
Q. I’m looking to retire in 18 months and don’t know who to trust when making a decision to keep money in the Thrift Savings Plan, do a mix with a traditional IRA, or take it all out and put 100 percent in a traditional IRA? A. I can give you one recommendation that may solve your problem: Leave your money in the TSP and manage it there for as long as possible. In fact, if you have eligible retirement plan accounts outside of the TSP, you should move them into the TSP. Anyone who tells you otherwise is either…
Q. I’m 47 and plan on retiring at 56 with 34 years of service. If I open a Roth Thrift Savings Plan account, can I withdraw all of the money from the Roth account and withdraw a small monthly amount from my traditional account when I retire? The TSP website says I can make withdrawals (1) on a prorata basis between the Roth and traditional accounts or (2) you can separately transfer any portion of your Roth or traditional account to an IRA or other eligible employer plan. I wanted to withdraw all of the Roth money while my husband is still…
Q. I am considering doing a partial withdrawal from my Thrift Savings Plan account and was wondering what the taxes might be. I am 63 years old, still working, with a FERS status. I wanted to move most of my TSP savings into a mutual fund/IRA and continue to make deposits in TSP. A. If you roll the withdrawal over into an IRA, there will be no tax consequences under current law.
Q. I am a single, 57-year-old CSRS Offset retiree, mortgage-free, no car payment, no children and debt-free. I have enough pension to live on comfortably and still put away money into savings monthly. I have more than 30 quarters of Social Security credit. I have two six-figure IRAs that I do not plan to touch until required. My Thrift Savings Plan is approximately $400,000 and I have yet to touch it. I am perplexed about when to begin drawing money from my TSP, but I know that I will have to begin withdrawals by age 70½. Should I draw TSP…
Q. Regarding the Thrift Savings Plan and what can be deposited into my active TSP account: I was previously employed in a nonfederal job for which I had a 401(k) plan in which I was fully vested. After leaving the company’s employ, I rolled the 401(k) into an IRA. Now, I am thinking about taking the IRA and depositing it into my TSP. Is this allowed? Is there a maximum amount that can be rolled into the TSP? Where should I look to get the appropriate forms? A. You may transfer an unlimited amount of pretax money from a 401(k) or IRA…