Browsing: one-time partial

Partial TSP withdrawal

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Q. I will be retiring in May with 25 years of federal law enforcement service. I will be 50 years old and subject to penalties and taxes on a one-time, age-based partial withdrawal from my Thrift Savings Plan. If I withdraw $20,000 to take care of bills and home repair, how much should I request from my TSP account to cover the taxes and penalties? A. Your withdrawal will be subject to 20 percent minimum mandatory federal tax withholding, so to receive $20,000 from the TSP, you’ll need to request $25,000. The actual federal income tax, early withdrawal penalty and…

Age-based, in-service withdrawal vs. partial withdrawal

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Q. I’m a 32-year FERS employee, 60 years old and about to retire in February 2014. I would like to take out some funds from my Thrift Savings Plan. Should I request an age-based, in-service withdrawal or take a partial withdrawal after I retire? A. Either will count as your single lifetime partial withdrawal. Will the tax cost for the withdrawal be significantly lower if the money is withdrawn in 2013? If so, you should consider taking the withdrawal now. If not, it will not really matter when you take it in 2014. If you need the money now but…

TSP

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Q. I’m unsure of what to do with my Thrift Savings Plan account. I understand that I could leave it in the account as it is until I’m 70½. I can also make a full or partial withdrawal.  Full withdrawal is not an option for me. A TSP life annuity (both single or joint life) option is based on life expectancy or until the money runs out. Also there is the TSP annuity vendor (MetLife) where I could get the annuity but money used to purchase this annuity goes to the insurance company if you die before it’s used up.…

TSP residential loan

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Q. I am a longtime CSRS employee with a pretty good Thrift Savings Plan balance. I plan to retire in two years and move to another city when I retire. My spouse is planning to retire in eight months, and we are planning to buy a house in the new city. We would like to buy the new house and begin the transition to the new city without selling our existing home until I retire. We are looking at a number of ways to finance the purchase of the new home and afford a mortgage payment on that house, a…

TSP withdrawal strategy

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Q. My wife and I are FERS employees. We are both considering retiring early if offered Voluntary Early Retirement Authority at ages 50+/- (both with more than 25 years of service). With children still in the picture for some time, access and flexibility with our Thrift Savings Plan accounts are crucial to any plan. I would like to accomplish two things: 1). 72(t) withdrawals until 59½ in one account. 2). Flexibility to roll over funds currently in TSP into a Roth IRA held at another institution (from an IRA as I see no method to do that while the funds…

Taxable distribution vs. one-time partial withdrawal

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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.

TSP loan repayment

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Q. How long after I retire do I have to repay my loan? Is there time to take a partial payment from the Thrift Savings Plan at retirement to pay the loan? A. You have 90 days following your separation to repay the loan. It doesn’t make sense to take a partial withdrawal to repay the loan, since any unpaid balance will be declared a taxable distribution when the deadline is reached but won’t count against your once-in-a-lifetime limit on partial withdrawals.

One-time TSP withdrawal at 59 1/2?

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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…

One-time TSP withdrawal

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Q. I am 60 years old and, for seven years, have been separated from 21 years of federal service. I have never made any withdrawals from my Thrift Savings Plan account. I am interested in making a partial withdrawal for home improvement projects. I understand a one-time partial withdrawal leaving the rest in TSP for later is allowed, but does one-time mean that if I make a one-time partial withdrawal now, I will not be allowed to make a full withdrawal of the remaining money later when I am fully retired to perhaps pay off the mortgage? Will I only be allowed monthly…

TSP partial withdrawal after tax distribution declared

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Q. I have a general purpose loan and am planning to retire soon. If I choose not to repay the loan and take a tax distribution, will I still be entitled to make one partial withdrawal after retirement? Or will the unpaid balance of the loan be considered my one-time partial withdrawal? A. The unpaid loan does not count as your partial withdrawal.

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