Q. When calculating the required minimum distribution for the 2011 tax form, do you use the Individual Retirement Account balance ending Dec. 31, 2010? A. Yes, although under certain circumstances, adjustments may be required. See IRS Publication 590 for details.
Browsing: Required Minimum Distribution
Q. I’m 72, and I must make a decision on Thrift Savings Plan withdrawals. I do not need any additional monthly income. Is there any advice/guidance on what options are best to take? Is it better to take a TSP annuity or to purchase one from another insurance company? A. I don’t know why you’d use your TSP assets to buy an annuity if you don’t need income, particularly with interest rates so low. I suggest you manage your TSP and have them send you the Required Minimum Distribution each year. You can then reinvest the money, after taxes, in a taxable account.
Q. I am a retired federal worker. I am in the Federal Employees Retirement System, a Thrift Savings Program participant, and, because I am over 70½ years old, I have been taking my Required Minimum Distribution in the form of monthly payments based on my life expectancy. I also have a traditional Individual Retirement Account with my local bank. I also have a Roth IRA at this bank. I want to consolidate some of my funds and increase my monthly payments by transferring my traditional IRA to my TSP account. I was told by the bank that the time for…
Q. What are the options for rolling over our TSP funds? You also always state to keep our funds in TSP as long as possible. Are we guaranteed that our money will be there? If I take a monthly payment, will that monthly payment be minus taxes? A. You may roll over a distribution from your TSP account to an IRA or other qualified retirement plan, as long as the distribution to be rolled over is not a Required Minimum Distribution. Your funds are guaranteed to be there if they are invested in the G Fund. If you take full…
Q. I will be retiring in 2012 and must also take a required minimum distribution from my TSP in 2012. I would like to do a partial withdrawal in the amount of the RMD prior to the date I retire, to be followed by monthly payments upon retirement. My question is whether I can rollover the RMD into a Roth IRA, so that I would be paying income tax on the Roth IRA withdrawals as the withdrawals are being done, rather than on the entire amount of the RMD. If I read the TSP material correctly, it appears that this…
Q. I’m a widower retired on CSRS with a pension that provides me with enough to live on. I’ll turn 70½ in 2012 with about $200,000 in my Thrift Savings Plan. Starting in 2012, I plan to take the required minimum distribution from my thrift plan each year. The question is how to allocate my money in TSP — which plans to put my money in. A. The answer depends upon your goals for the money, and how important it is that it achieve those goals. Your question is like asking which way you should turn the wheel in a…
Q. If I have more than 240 hours of annual leave when I retire, will I be allowed to cash that amount in also, or will I have to take the leave before retirement? If I retire at the end of a calendar year, will I be able to cash in my annual so that it is taxed the following calendar year? Does this also apply to TSP? A. You may delay your TSP withdrawals for as long as you like, subject to the Required Minimum Distribution rules that apply beginning at age 70½.
Q: I’m a Federal Employees Retirement System retiree, 70 1/2 years old, and have been receiving fixed monthly payments from my Thrift Savings Plan account to cover my living expenses since my retirement in 2006. I will begin required minimum distributions this year and would like to know if the IRS will allow the amount of my annual TSP withdrawals that exceed my TSP yearly RMD to be credited against the RMD requirements due to start this year for the standard individual retirement accounts I hold from credit unions, banks, etc. A: Your RMD must be calculated separately for each…
Q: I will turn age 70½ this year. I have non-Roth IRA accounts apart from my TSP account with the federal government and will be required to start taking withdrawals from those accounts. However, the majority of my retirement savings is with my federal TSP account and I am continuing my participation in this plan while still employed. I plan to continue my employment with the federal government for several more years and have no retirement plans in the near future. I do not wish to make any withdrawals from my TSP account while still employed by the federal government.…
Q: I am a retired CSRS post office employee. I am 65 1/2 years old and have left my funds in TSP. How long before I have to start withdrawing the funds? I plan to rollover my deposit to my IRA with my postal credit union. A: You’ll have to start withdrawing funds by April 1 of the year following the year in which you reach age 70 1/2. You can’t rollover your Required Minimum Distribution (RMD) to an IRA, however, since that would defeat the purpose of the RMD, which is to collect taxes.