Q. A recent question read in part: “I have more than four years until military retirement (April 2018). At that time, will I be able to transfer all Roth TSP contributions to my Roth IRA? I have no plans of transferring the traditional TSP balance. The goal is to combine Roth TSP/Roth IRA contributions and pay cash for retirement home.” I agree that if you take a monthly withdrawal from the Thrift Savings Plan, they take from both traditional and Roth accounts. But I thought the TSP 90 form allowed transfer of Roth TSP contributions to a Roth IRA fund or…
Browsing: military
Q. I am 52 (FERS employee with 29 years of service including military buyback) planning on retiring at age 59-60. I have $400,000 in my Thrift Savings Plan account. I’m not sure that I’ll need TSP right away but want to have the option. My coworkers insist I can’t withdraw before 65, but I can’t find anything that indicates such a restriction. Are there any restrictions other than the 59½ rule that would affect me? A. No.
Q. My IRA was started when active-duty personnel were permitted to contribute to an IRA with after-tax dollars. I am 66 and want to begin planning for the required minimum distribution with a little long-term projecting. Here is the dilemma. In trying to compute the cost basis and taxable amount, I have to distinguish between the military years “after-tax dollars invested” and the “before-tax dollars investments” contributed during my post-active-duty working years. I found out that for some of the active years, no IRS Form 8506 was filed (showing the contributions for some years). How can I substantiate for the IRS…
Q. If I roll over my military Thrift Savings Plan into my civilian TSP, will I pay taxes? A. Not on the rollover.
Q. I am active-duty military and am about to open a TSP account in January. From everything that I’ve read, I understand that I cannot transfer funds from my Roth IRA to my TSP account, but I do not understand why. I Can someone explain to me why this is the case and who made this rule? A. I can’t tell you why it’s the law, but it is the law.
Q. I am almost 58 years old and retired from military/federal service after my 55th birthday. I would like to withdraw my Thrift Savings Plan now, in a lump sum. How much will I have to pay in penalties and taxes? A. You’ll be subject to 20 percent backup federal withholding, no early withdrawal penalty, and your tax liability will be determined when you file your tax return for the year of the withdrawal. The money you withdraw will be taxed as ordinary income, and the rate will depend upon your particulars.
Q. I have seen quite a few questions (and answers) about how to request that Thrift Savings Plan loan payments be suspended during the government shutdown, but no detailed information about exactly how to continue to make payments should one want to do that. When during the regular pay cycle should one send in a payment check with the appropriate form? When we go back to work, and if back pay is given, will the loan payments for the entire period of furlough, or perhaps the last pay period only, be taken out? How long of a period of nonpayment may…
Q. I have two Thrift Savings Plan accounts — one with the military and one civilian. Because of my financial situation, I would like to take some money out for debt consolidation. I was weighing the option of borrowing from my civilian vs. closing my military account (which I am no longer contributing to) and using those funds. If I close my military account, can I roll a portion of it over to my civilian account, and use the rest? What/how much of a tax penalty am I looking at if I do either? Would it make sense to close my military…
Q. I plan to retire in 22 months when I will be 62.1 years of age. I will retire in Virginia and immediately move to Texas. I estimate that I will be earning approximately $133,000 from CSRS, $6,900 from Social Security and $18,000 from Army retirement. I already have two properties in Texas and plan to buy my live-in home in San Antonio shortly after I arrive in Texas. I plan to cash in my Thrift Savings Plan at age 62 in Texas and use 100 percent of it as a down payment for the purchase of my home in San…
Q. I have power of attorney for my military retired son who is not employed and only receiving retirement benefits, as well as undergoing a divorce. There is just not enough money to go around. I am paying what I can with his funds, but there is one large debt that there is no way to make payments on (they’ve refused what little is available) since he is only getting half of his retirement income due to the pending divorce. He has an IRA and a Thrift Savings Plan account. Would the creditor be able to take the TSP monies?…