Browsing: monthly

Q. When I retire in two years at age 62, I would like to take a fixed monthly payment out of my Thrift Savings Plan. Can I still leave the balance in the L Fund and earn the rate that the L Fund is earning? A. Yes.

Q. I am reading TSP-775 (6-2013) concerning important tax information about TSP withdrawals.  First paragraph (Deadline for withdrawing your TSP Account) states that “By April 1 of the year following the year you become age 70.5 and are separated from Federal Service, the TSP requires that you withdraw your entire account balance in a single payment.” It goes on to give options about monthly payments, life annuities. This leaves me perplexed. I thought I only needed to withdraw the required minimum distribution after becoming age 70½. Also, I thought if I have other IRAs, I could take the RMD from those and leave…

Q. I am retired and turn 70 this month. Even though I do not want to begin distribution of my Thrift Savings Plan investment, I understand that by law I must select a required minimum distribution program. My dependent spouse is 76 and also retired. I am healthy and, with my family genetics, could expect to live to age 100. I do not need the TSP to live on and want to maintain it in the TSP investment form for as long as possible. Under these circumstances, what is the best RMD to select: a life annuity or a TSP monthly payment? Should it be…

Q. I am planning to retire at 65½ years of age. Can I withdraw monthly a certain amount between 65½ and 69½ and change to the life expectancy option at 70? A. This is not allowed, but if you reduce your fixed monthly withdrawal to an amount that does not meet your required minimum distribution for the year, the Thrift Savings Plan will issue a payment to make up the difference and ensure that your RMD for the year is met.

Q. I am an air traffic controller who will be forced to retire in May 2016 when I turn 56 with 28½ years of service time. If I retire anytime between Jan. 1, 2015 (the year I turn 55) and May 2016, will I be able to take out a lump sum and monthly payments from my Thrift Savings Plan without the 10 percent tax penalty? Do I have to follow the life expectancy requirement for receiving monthly payments, or am I free to set the payment amount as I wish and adjust it once a year? A. Since you…

The Thrift Savings Plan’s website, www.tsp.gov, has posted a new income calculator. Well, it’s not entirely new, it’s mostly just remodeled. Now, instead of going directly to the old monthly payment calculator or the annuity payment calculator, you must go through a wizard that automatically runs both and compares the results. As much as I like the TSP and have endorsed its use, I have to say that I find this effort to be misguided and disappointing. I can’t imagine how the cost-benefit analysis was run to produce a green light for expending participant’s resources on what is an entirely…

Q. I have to retire in 18 months. I plan on taking a lump sum and monthly allotment from my Thrift Savings Plan at retirement. I understand both of these will be taxed at 20 percent. I am thinking of taking a TSP loan for the amount I had planned on requesting as my lump sum prior to my retirement date, with the understanding that I won’t have the time to pay it back in full and that the amount I don’t pay back will be considered disbursed income. My reasoning is that having the funds now will allow me to…

Q. After entering my Thrift Savings Plan earnings in the Employee Benefits Information System profile, it shows my TSP annuity is $2,000 per month if I retire at age 56 (my minimum retirement age). What is the $2,000 based on? Is it $2,000 until I die, or only until I reach a certain age? A. It could be your life, your joint life with a partner, or a minimum of 10 years, depending upon which annuity option you choose.

Q. I am a 50-year-old 6(c). I am eligible to retire on an immediate unreduced annuity this year and plan to do so. I plan to eventually access my Thrift Savings Plan funds, and I understand that I am able to do 72(t)-type withdrawals and avoid early withdrawal penalties. But I’m not interested in 72(t) systematic payments. I also know I could roll over the account to an IRA, but that is not my desired intention. Since I am retiring at age 50, what is the first date that I could begin to access my TSP via lump sum or monthly withdrawals without…