Q. I understand that you can transfer funds into and out of your Thrift Savings Plan from either eligible pretax plans and/or after-tax plans. However, withdrawals (loans, withdrawals and interfund transfers) are made proportionately from both the traditional and Roth. Thus, you cannot specify withdrawals from only the traditional or the Roth. This is seen as a major drawback for some who would like to participate in the Roth option only or make withdrawals from only the traditional or the Roth option. Would it be possible, at or near retirement, to transfer a major amount of your TSP balance —…
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Q. I retired early from the post office last year. At the time, I had a two loans out on my Thrift Savings Plan account. Now the time has come to pay the piper and the tax bill is enormous. I just turned 56 in January. Is there any way to lessen the blow or offset any of the taxes and penalties from the unpaid loans I took out before retirement? Or at least something I can do, other than pay the full amount of early withdrawal and regular taxes? A. Assuming that it’s been more than 60 days since…
Q. I retired from active duty two years ago and have worked in civil service for one year. I am contributing 10 percent of my civil service base pay and have a fairly good amount in my active-duty military Thrift Savings Plan. I am entertaining the idea of consolidating my TSP plans for a couple of reasons. First, simplicity of managing one account. Secondly I believe, from what I have read on numerous sites, I will have greater control of current and future funds using the civil service side of TSP versus the active-duty military side. By this, I mean in-service withdrawals,…
Q. I am an FERS employee and, for various reasons, have selected Nov. 28, 2015, as my retirement date, age 60+ with 21 years civil service and four years military, for which a deposit has been made. One of the many reasons that I selected this date was so that I could have a Thrift Savings Plan residential loan balance declared as a taxable distribution during the 2015 tax year, because I will have substantial withholdings by that time, and given my tax return history, would have a significant tax overpayment that would be useful in paying a portion of…
Q. I’m nearing retirement and have a Thrift Savings Plan loan. If I decide not to pay off the loan but to pay the taxes on the taxable distribution, am I still eligible for the one-time partial withdrawal after I retire? A. A declared taxable distribution does not violate the TSP’s eligibility requirements for taking a partial withdrawal after separating from service.
Q. I’m planning to take out a residential loan to make a down payment on a house. Am I able to take out an amount but not use all of it toward the actual down payment? Would I be able to use a portion toward home improvement? A. Purchase or new construction only. Residential loan proceeds may not be used for renovation or repairs, which I assume includes improvements. You may want to contact the Thrift Line with your particulars to be sure, but I don’t think it will be allowed.
Q. Which account does my Thrift Savings Plan loan come out of? If I have enough in the G Fund, will TSP take the loan directly from the G Fund, or will it take the money out proportionally? For instance, I want to take a $35,000 loan, and I have enough in the G Fund to cover that loan, and I would prefer that the entire loan come out of the G Fund. But if the loan is taken out proportionally, does that mean 80 percent of the loan comes out of my stock funds, 5 percent out of the F Fund…
Q. I am being considered for disability retirement in the coming months. My application is pending consideration from the Office of Personnel Management. I am a GS-14 FERS employee, 54 years old, with about 32 years of service. I have approximately $250,000 in the Thrift Savings Plan, and my allocations are as follows: 15 percent C, 15 percent S and 70 percent I. I realize that is somewhat aggressive, but it has been like that for about seven years or so, and I have been hopeful of the international home run. Regrettably, this hasn’t necessarily come to fruition. I will…
Q. I am retiring from the Postal Service in 10 days. I have an outstanding loan for $6,500. I do not have the funds to pay off the loan now, and I need an immediate partial withdrawal for $30,000 when I retire. How do I get this done ASAP? A. Use Form TSP-77 to request a partial withdrawal following separation from service.
Q. I have a Thrift Savings Plan loan and I am retiring. I’m reading everywhere and understand that I must pay back the loan to avoid a taxable distribution. What is the time frame for that? Your reply to someone last year was, “Your loan balance will be automatically declared a taxable distribution if you fail to repay it after you retire.” But is there is time frame after I retire? Does it have to be paid by the day I separate, or can it be paid a few weeks after my official date of retirement? A. You will have…