Q. If I roll over my military Thrift Savings Plan into my civilian TSP, will I pay taxes? A. Not on the rollover.
Browsing: rollover
Q. I am a CSRS Postal Service employee and plan to retire at the end of 2014, when I will be 55 years old with 38 years of service (including sick leave). After reading other answers, I understand that I can immediately withdraw funds from my Thrift Savings Plan without penalty but would like advice regarding those withdrawals. Considering that TSP withdrawals are subject to regular income taxation, is it beneficial to move the funds to an IRA? Would I avoid any tax? Other than future growth potential and smaller tax rate, is there any benefit to delaying withdrawals until later in…
Q. I have a variable annuity (mutual fund) with Western Reserve Life Assurance and it has been doing terribly for many years. I put $10,000 in it in 2001, and it’s only valued at $14, 500 now, 12 years later! My Thrift Savings Plan account is doing much better, and I would love to transfer or roll over this money into my TSP account. Can it be done, should I, and, if so, how? A. It may only be done if: 1. The annuity is an IRA or other Qualified Retirement Account; and 2. All of the money it contains…
Q. Regarding “Government default and TSP rollover” posted Oct. 15: He asked whether he should roll over his account to USAA and you said you wouldn’t. Could you explain more on why you wouldn’t and the benefits of leaving it in the Thrift Savings Plan account? A. The TSP’s lower costs and access to the G Fund make it the best retirement investing vehicle available anywhere. You can configure portfolios with better risk-adjusted expected rates of return in the TSP than anywhere else. Of course, using the TSP’s attributes to your advantage is requisite to the choice.
Q. I recently retired but will not be withdrawing any of my Thrift Savings Plan for a few years. I’ve considered rolling over my balance to USAA because of the possibility of a government default. Is that advisable? In the case of a government default, will my TSP balance be safe? A. I wouldn’t do it if I were in your shoes. I’m not sure how the debt ceiling uniquely threatens your TSP account.
Q. I took the Voluntary Early Retirement Authority on Jan. 31 at my minimum retirement age. I had 26 years at the Postal Service under FERS. After 16 years of marriage, I became a widow. The only income I have is my annuity and the special retirement supplement from the Office of Personnel Management. Will I be eligible to receive Social Security benefits from husband at 60, and will they end at 62? When I turn 62, my supplement will end. I have $190,000 in the L2020 fund. Would it be beneficial to me to start receiving money from my…
Q. I was first employed by the Defense Department in October 1982 and placed in CSRS. During a reduction in force, I lost my position in July 1994. In 1996, I withdrew my CSRS contributions and had them rolled into an annuity with American Express (now Ameriprise). In November 1998, I was rehired by DoD and became a FERS employee. When I was rehired by DoD, I took the funds I had earned at my previous (1994-1998) job’s 401(k) and rolled them into the same annuity with Ameriprise. I am now nearing retirement age and plan to buy back the CSRS…
Q. I am a federal law enforcement officer. I recently read an article that discussed the downside of the Roth TSP for federal law enforcement officers and firefighters. Is this true? ************* Many of you are probably unaware of the serious pitfalls you will encounter if you opt to contribute to the Roth TSP. For a federal law enforcement officer or firefighter, the Roth TSP is a poor choice. It wasn’t until this week that a reader posed a question to me that caused me to realize what a bad idea the Roth TSP is for many of us. The idea behind…
Q. After entering retirement from CSRS, are Thrift Savings Plan funds withdrawn classified as income in addition to the 20 percent accessed at the time of withdrawal from the TSP account. Are there ways to avoid double taxation if they are taxed twice other than rolling over into an IRA or Roth IRA? A. The traditional TSP funds you withdraw are classified as ordinary income on your tax return. They are not subject to double taxation. The 20 percent withheld from your payment(s) is a deposit against your tax liability. If the distribution is not a required minimum distribution and you…
Q. I am almost 47 years old and have applied for disability retirement from my federal job. I have 27 years of federal service and am covered under FERS. It was my understanding that upon disability retirement, I will not be able to contribute to my Thrift Savings Plan account any longer and the funds would basically sit in TSP until I’m 59½ years old. For that reason, I’m considering rolling over my TSP to a traditional IRA, in which I can then make contributions to until I reach 59½. I’d like to know why leaving the funds with TSP would…