Q. Can I roll over the balance of my Thrift Savings Plan loan to an IRA at retirement and keep making loan payments? I am trying to delay the impact of the entire balance being counted as income on my 2012 income tax (assuming I am retiring in August 2012). A. No. Loans are not permitted from an IRA.
Browsing: loans
Q. I recently left federal service after three years to pursue grad school in the fall. I am 23, with a little over $15,000 in a Thrift Savings Plan account. I am wondering if I should make an out-of-service withdrawal and transfer the funds to an IRA? Then, once the funds were in an IRA, I could withdraw the funds for education costs without the penalty or 10 percent tax and only face federal income tax, since my state doesn’t have an income tax. I am not receiving financial aid for grad school because of my federal government salary, and…
Q. I owe $24,000 to my Thrift Savings Plan from a loan I made. If I take the early retirement, how much will I owe in taxes to the government? I live in Florida. A. The amount you’ll owe on the unpaid loan balance can only be determined by completing your tax return for the year. If you’re not prepared to make the estimates by running a pro-forma return, then you should consult a tax adviser who is.
Q. I have worked for the Postal Service for 24 years as a postmaster. I would be able to take an early out if it was offered. I want to borrow on my TSP for a residential loan. If I make a 10-year loan from my part of the TSP next month and then the Postal Service offers an early-out retirement and I take it, will I have to continue making the payments? Also, when I do retire, will I be able to pull out all my savings in TSP? A. If you retire, your outstanding TSP loan will become…
Q. I am a federal employee and I have a TSP account from which I am trying to take out a residential loan. So far I have faxed in my information four times and I am told every time that a different page is unreadable. The issue is I have sent each fax from a different fax machine and there is an issue every time. I would like to follow a complaint, but the thrift line is no help. How would I go about filing a formal complaint? A. The Federal Thrift Retirement Investment Board administers the TSP. You can…
Q. I am 54 years old with 33 years of federal service, 27 in the Postal Service and six as a military buyback. If the USPS offers voluntary early retirement, Iwould take it; but I have an outstanding loan with my TSP and not enough cash or credit for a loan to pay it off. How would this work? May I use my TSP to pay it back, and would I be able to withdraw funds from TSP, even with the 10 percent tax penalty? How does TSP figure what has been paid in and what is interest accrued, and…
Q: I’m an Air National Guard technician under FERS with 34 years service. My first nine years were active-duty Air Force service, which I have bought back. I have a personal loan through TSP that will still have a balance of about $6,000 when I intend to retire next July at my MRA of 56. I intend to depend significantly upon TSP, $2,500 a month, until I reach the age of 59 3/4, when my military Guard retirement will start paying out. At that point, I’ll minimize my TSP annuity. Will the outstanding loan balance have any effect on my…
Q: I have been contributing 17 percent into the TSP, and have two loans against the fund. It appears that the loans repayments are pre-tax just as the the contributions are. Is there a disadvantage to reducing the contribution to 5 percent (to maintain the matching from my employer), and re-amortizing one loan with that 12 percent to pay it off faster? A: Your premise is incorrect. Your TSP loan payments are not tax-deductible, that is, they are made with post-tax dollars. Your loan gave you spendable, after-tax dollars, and it must be repaid with spendable, after-tax dollars.
Q: If I am offered early retirement with incentive pay, can I have the money used to pay off a TSP loan, with the remainder sent to me? A: Probably not, but you can accept the money and then use it to repay your loan.
Q: I am a retired Army reservist since July 2011. I was called to active duty in support of OEF in August 2006 until May 2011. Before my active-duty orders ended, I took out a loan from my TSP account. The loan has not been repaid, and I have separated from the service. If I elect not to repay the loan, will I be subject to the 10 percent early withdrawal penalty or am I eligible for relief from the penalty since I was a reservist called to duty for more than 179 days after Sep. 11, 2001? A: There…