Q. Are there any competent financial advisers in the Washington, D.C., metro area who are experts on rolling Thrift Savings Plan money into an Individual Retirement Account and withdrawing it under Internal Revenue Service Rule 72(t) before age 59½? A. If all you want is 72(t) support, the best option is to engage a CPA to do your taxes and have them provide you with the support. That way, they’re responsible for defending the return if it is questioned. The 72(t) rules are strict, so you shouldn’t cut corners in this area. Any good adviser who isn’t preparing your tax…
Browsing: rollover
Q. I am planning on retiring Dec. 31 at age 68 with 10 years of FERS service. I will be 69 on Jan. 18, 2013. What are my options regarding my Thrift Savings Plan account? Should I roll over to my Individual Retirement Account? A. Following retirement, you may withdraw your funds from the TSP, roll them over to an IRA, or leave them in the TSP and continue to manage them. You can learn about the details at www.tsp.gov. In general, I recommend leaving your funds in the TSP as long as possible to take advantage of the unique…
Q. I am a FERS employee. I am interested in rolling over my outside Roth IRAs into the Thrift Savings Plan’s new Roth IRA. Can I do this? If so, how do I go about it? I am paying too much in fees for small amounts. A. Unfortunately, this is not permitted by the TSP.
Q. I have a State of Kansas deferred compensation 457(b) pretax fund from when I worked for the state. Can I roll this into the Thrift Savings Plan without tax consequences? If so, how do I go about the process? If I have to receive a check from the fund directly — not made out to me — I believe I have 60 days in which to get it into another fund. A. If it contains only pretax money, you may transfer it to the TSP. Use Form TSP-60 and follow the instructions.
Q. I am a federal employee, age 52. I established a Roth IRA several years ago and contributed to it until my income became too high. If I start contributing to the Roth TSP, can I roll over the discrete amount of my Roth TSP contributions at retirement to my existing Roth IRA, or do the rollover amounts follow the prorate distribution rule? A. You will be allowed to rollover the Roth money to your Roth IRA.
Q. My husband has 15 years active-duty military and is working now as a NASA employee. It will cost about $20,000 to buy back his 15 years. Can we roll over money from our 401(k) into FERS and avoid penalties and taxes on that money? A. No.
Q. I retired from the Department of the Interior on Dec. 31, 1997, and left my Thrift Savings Plan intact until 2003, when I rolled it into a traditional IRA. On the paperwork for the rollover transaction, I find no reference to TSP contributions versus TSP account balance. As I approach age 70½ next year, I realize that I need to know what my contribution (or basis) was. I have filed with the Internal Revenue Service for a tax extension in the hope that I can retrieve contribution/basis info from TSP archives and accurately represent the TSP account in my total IRA…
Q. I recently transferred my “entire” traditional Individual Retirement Account from Fidelity to the Thrift Savings Plan. When I started the IRA in 1983, I opened it with pretax money. From that, there was a front load cost. To the best of my knowledge, they rolled all of it over. How does that affect the tax situation? Is that previously taxed money identified? A. When you moved it into the TSP, you signed a statement that it was all pretax money. It will all be taxed as ordinary income when withdrawn.
Q. I am a Defense Department employee under CSRS, and am eligible to retire in two years at age 55. I have been making contributions to the Voluntary Contributions Program for many years. Under VC regulations, upon withdrawing the account (among other options), I can roll over the interest portion of my VC balance direct to my Thrift Savings Program, and receive my contributions portion back as a cash refund, from the Office of Personnel Management. On the upcoming Roth TSP, will there be an option to roll my VC portion, direct to the Roth TSP, in addition to rolling the…
Q. I am planning on rolling over my voluntary contributions account in the very near future. Can I roll my contributions to the new Roth Thrift Savings Plan once it is operational? I understand that any earnings I have from my VC account can roll over to my regular TSP account. A. Based on the guidance provided by the TSP so far, this should be possible. We’ll have to see how things develop to be sure.