Q. I am retiring under FERS in a few months, and am looking for recommendations on how to best invest my Thrift Savings Plan dollars. I believe my options are to buy a MetLife annuity, leave the funds in my TSP account until I turn 71 years old (I am now 60), or roll the TSP dollars into an IRA or other type of investment account. I have approximately $350,000 and will receive my FERS retirement and eventually Social Security. Do you have any recommendations to roll the dollars into an investment account that I could occasionally draw from and that could draw…
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Q. My understanding is that a spouse’s traditional IRA (not a Roth IRA) cannot be transferred into a government employee’s Thrift Savings Plan 401(k) account? Can you tell me if that is correct? A. That is correct.
Q. I am 59½ and would like to take advantage of the opportunity to take a one-time withdrawal. What are the tax consequences of taking a withdrawal of, say, $50,000? Does it have to all be rolled to an IRA to avoid a tax penalty, or can it come out as cash and part of it be put into an IRA and part put into a spending account for paying down bills/mortgage? A. Taking a withdrawal from your TSP account after reaching age 59½ will not generate a penalty. Any amount withdrawn and not rolled over will be treated as ordinary, taxable…
Q. My boyfriend worked as a civilian marine electrician in the Navy and he has a 401(k) plan or a Thrift Savings Plan. He’s not working with them anymore, and he wants to withdraw some money to start a new life. He does have a job, but it’s not enough to pay his bills, and he wants to get a divorce from his wife but has no money to even file it. I’ve read several articles and I think his best option is to directly roll over the plan to a traditional IRA, which avoids any penalty fees, but he…
Q. A client of mine retired from federal government after 16 years and took her employee contributions out of the retirement plan upon retirement. She is working for the federal government again and wants to buy back in to the pension plan for the employer portion of the 16 years she previously worked. Does she have to use after-tax dollars, or can she do a rollover from an IRA or other retirement plan? A. She must use after-tax dollars for the buyback.
Q. I am under FERS. I want to purchase a Thrift Savings Plan annuity. After I retire, is it possible for me to add funds to my TSP savings to increase my monthly TSP annuity? A. The only way to add funds to your TSP account after you retire is to transfer money in from a qualified IRA or employer-sponsored retirement plan. This will have no effect on a TSP annuity that has already been purchased, however.
Q. In an effort to increase my Thrift Savings Plan account before I retire Sept. 30, I assume I can open a traditional IRA and roll it over to my TSP account with no restrictions on amount. Is that correct? A. Correct, as long as the IRA contains only pretax money.
Q. Is it possible to do partial transfer of Thrift Savings Plan funds once you leave the government? Could I transfer 50 percent of my TSP funds into an IRA and retain the other 50 percent in my TSP account? A. Yes, as long as you haven’t already exhausted your single TSP partial withdrawal allowance.
Q. I have an inherited IRA with $50,000 (from my 75-year-old father). It is in a managed asset account. I have to take a required minimum distribution on a yearly basis. Can I transfer this money into my Thrift Savings Plan account and request RMD on yearly basis? A. No.
Q. My wife works for a dental office which has a profit-sharing plan. Only her employer makes contributions to this pretax plan. She will retire in one more year. We would like to do a direct rollover of her funds into my Thrift Savings Plan, so that all holdings can be distributed from this one account. However, I have been told by TSP personnel that the ownership of any plans to be transferred must be in my name, not my spouse’s name. Is there any legal way for getting her profit-sharing plan funds to transfer into my TSP account? For example, since I am 2½ years…