Q: If I can withdraw from my TSP if I retire in the year I turn 55 (CSRS) without the penalty, can I also roll over my TSP to a Roth IRA without the penalty? From what I have read, any rollover prior to 59 1/2 would trigger a penalty. Is there any special provision that allows the rollover at 55, like the early withdrawal for federal employees? Because I may be in a higher tax bracket later in my career, I would like to move it now, but not at the expense of the 10 percent penalty. A: If…
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Q. It is my understanding that it takes 31 days after retirement date (this Nov. 30) for your TSP to be processed. What happens if, due to the process time, you don’t have time to meet the 60-day rollover? It is also my understanding that after age 55 up to 70 1/2, you can take out any amount you need as long as you pay the tax owed. However, once you start taking, will this be used to meet the RMI for all your total IRA no matter which one you take from. A. The 60-day rollover window starts from…
Q. While I know it’s not the smartest thing to “put all of your eggs in one basket,” I do have some questions. I began working for the U.S. government in May 2005. I plan to have my entire career in the federal service. Currently, my Thrift Savings Plan account is 100% percent invested in the L 2040 fund. In that time, my contributions and matching funds have grown substantially. But, I also have a rollover IRA from a 401(k) that I had while I worked in private industry. This rollover IRA has not grown much, and I have not…
Q. I contribute the maximum amount to my Thrift Savings Plan each year. Can I also contribute the maximum amount to a traditional IRA? Are there any prohibitions to me doing this? Is there a limit to tax deferring compensation? What I am considering doing, if possible, is to contribute to a traditional IRA for a number of years, then roll it over into my TSP if that could possibly provide a better benefit, such as when it comes time to purchase an annuity. A. If only it were that easy! There are limits, and the amount you can contribute…
Q. I had a 401(k) plan with my previous employer. I rolled over into an account with Fidelity after I left and haven’t added any money to it since. Can I roll it over again to my current Thrift Savings Plan account? What form would I need to use? A. You may transfer the assets into the TSP as long as the account contains no after-tax dollars — that is, money you contributed after it was taxed. Visit www.tsp.gov for more information and use form TSP-60 to request the transfer.
Q. We are getting ready to be offered an early retirement under the Voluntary Early Retirement Authority. I’m a Civil Service Retirement System employee, and I’m thinking about taking the offer. I would like to withdraw my Thrift Savings Plan, but I won’t be 55 until Feb. 22, 2012. Is there any way of getting around paying the 10 percent Internal Revenue Service penalty for early withdrawal under the age of 55? A. If you actually separate from service on or after Jan. 1, 2012, your TSP withdrawals will not be subject to the early withdrawal penalty. If you separate…
Q. I would like to know if there are any options to remove any portion of Thrift Savings Plan balance (e.g., my own contributions), prior to separation, retirement or a disability. I do not want to leave government service, nor am I eligible to retire. But I would like to control my own investment choices and am willing to consider paying an early penalty and taxes to withdraw the funds. A. If you are at least age 59½, you may take one age-based, in-service withdrawal. If not, you may not withdraw or roll over your TSP assets unless you can prove…
Q. I retired under CSRS with $29,000 in G Fund. What is a wise strategy to roll it over for future education for a 7-year-old? A.I don’t know why you’d roll it over. Why not just keep it in the TSP until you need it?
Q: I have five years of military service that I am considering applying to my federal retirement years. I have waited way to long to do this and am hoping I could use my Thrift Savings Plan monies to pay for the military service, similar to rolling over an individual retirement account. Is this possible? A: A rollover to the Federal Employees Retirement System or the Civil Service Retirement System for service is not allowed.
Q: My wife is 59 years old and retired from the California State education system because of medical issues. While she receives her retirement annuity, she kept and did not withdraw any of her pre-tax retirement funds. I am 64 years old and plan to leave my TSP when I retire this year, or next year at age 65. Will I be able to roll over or combine my wife’s pre-tax retirement fund with my TSP when I retire? And, if I could do this, is there any advantage? A: No, this is not permitted.