Q. I work for a defense agency and I am planning to retire after 28 years of service at the end of this year at age 66. Now I am considering my options for handling and managing my Thrift Savings Plan fund. I have a question regarding withdrawal. According to TSP 775, I can withdraw funds through a single payment, a series of monthly payments or and purchase an annuity. If I decide to go for a series of monthly payments, which TSP form should I use to submit my application? A. TSP-70 – Request for Full Withdrawal.
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Q. I am planning on retiring within the next two years. I have a few IRA investments that I would like to transfer to the Thrift Savings Plan, but when I retire, will I be able to them leave there, or do I have to liquidate all my accounts in TSP when I retire? A. You may continue to maintain and manage your TSP account for as long as you live. You may also transfer eligible assets into the TSP at any time, for as long as you maintain the account.
Q. I am 57 years old with 25 years of Veterans Affairs Department service. I plan to leave federal service in April 2013. I would like to resign and postpone my FERS annuity until I reach 60 years old. I would like to start withdrawing from my Thrift Savings Plan soon after resignation. Is this possible to start withdrawals after separation, or must one be in a retired federal service status before starting TSP withdrawals? A. You may start withdrawals after your separation from service.
Q. I have six more years of active duty in the military. I have approximately $62,000 in my Thrift Savings Plan, 100 percent is in the G Fund. What would be the best fund for investment for my age and retirement in six years? A. It’s impossible to say from this information. The correct answer depends upon how and when you plan to use the money.
Q. Effective Feb. 29, 2012, I am a CSRS retiree from federal service; I participated in both the Thrift Savings Program ($201,000), and the Voluntary Contributions Program. I must make an election soon of the funds now in the VCP: $87,637 (nontaxable); $34,682 (taxable). I am married, and I will be 66 years old in October. I (we) do not foresee needing the money from these two sources in the near term. I will likely convert everything to a traditional IRA then Roth IRA in April of the year after I turn 70½, to be left to my son after I…
Q. I am a federal civilian with 20 years of service (12 to 15 years to go). I have more than $200,000 in my 401(k) plan. The new Roth IRA option sounds appealing to me, since I’d rather pay tax on my retirement money now, while I’m employed. If I start changing some of my biweekly allocations to the Roth option, am I negating the benefits of the Roth by contributing less to the “big pot” of my existing 401(k), reducing the compounding interest? I don’t want to end up robbing Peter to pay Paul. A. Directing your contributions to…
Q. I am in my early 20s and have just left a federal job. I am trying to decide what to do with my Thrift Savings Plan money. I’m leaning toward rolling it over to an IRA but do not understand where to start. Where do you get the forms to do this? Is it a good idea? (Cashing it out would have been my next option.) A. The best thing you could do with it is to leave it in the TSP and manage it there for as long as possible. In fact, if you have IRA, 401(k) or…
Q. Can you still transfer your Thrift Savings Plan balance between funds after you have retired and started receiving monthly payments based on life expectancy or a specific dollar amount? A. Yes.
Q. I am 66. I was told that I can stop contributing to my Thrift Savings Plan, which I already knew, but still get the 1 percent from the feds. Can the fund be closed entirely without being penalized? The account has very little in it, and my retirement is next year. A. No, your TSP account will continue until you have retired and withdrawn all of its contents.
Q. I retired on disability in March 2007. I turned 58 on May 15. What tax rate will I have to pay at 59½ years of age, and what penalty would I pay for withdrawing before then? A. The rules can be complex, depending upon your circumstances. I suggest that you read the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf and then I’ll answer any remaining questions you may have.