Q. I’m 68 years old (under FERS) and have a Roth IRA that’s external to the Thrift Savings Plan and has been open and funded for more than 10 years. I started contributing to my TSP Roth IRA this year. When I retire in 2015, I want to be able to roll over my TSP Roth IRA into my external Roth IRA without any tax consequences. I understand that I’ve clearly met the age requirement (older than 59½), but I want to make sure I also meet the five-year rule. Does the five-year rule apply to the time that funds were…
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Q. I have not worked since fall 2011. I’m on leave without pay with the Postal Service. Currently on disability retirement approved by Social Security and the Postal Service. The Office of Personnel Management has until November to finalize the disability retirement. On Sept. 23, I default on my Thrift Savings Plan personal loan ($5,300). I am entitled to agency retirement pay of $1,645 per month but cannot be paid until OPM acts. Social Security is roughly ¼ pay, and I cannot realistically pay the catch-up amount and the two monthly loan payments for at least two months. At that…
Q. 1. I am retired at 52. If I take a life expectancy withdrawal through the Thrift Savings Plan from now until I reach 59½, can I then roll over the balance of my account to a privately held traditional TSP such as Vanguard? Or does taking the life expectancy withdrawal through the TSP commit me to them for life? 2. If I receive life expectancy withdrawals now through the TSP, can I still take a partial withdrawal (amount of my choosing) when I am 59½ without the 10 percent penalty? 3. If I roll over my entire TSP account now to a…
Q. When does a nonfederal retirement fund (401(k), IRA, Substantially Equal Periodic Payment, etc.) qualify to be rolled over to the Thrift Savings Plan? Is there a time limit that such funds need to remain before transferring to a TSP account? A. Basically, the funds need to come from a tax-deferred retirement account and consist of only yet-to-be-taxed money.
Q. My mother recently passed away and her teacher retirement account provided a lump-sum benefit to my sister and myself. As a surviving beneficiary other than a spouse, I can take the payment as a rollover to an inherited IRA. I would like to put this money into my Thrift Savings Plan account. Can I transfer the proceeds directly from the teacher retirement to my TSP? A. Inherited money can’t be transferred into your TSP account.
Q. I worked for the Department of Justice from 1989 to 2003 under FERS. I have worked in the private sector since that time. I will be 62 in 2015, at which time I think I qualify for a retirement annuity. Can I do all of the following: 1. Receive a FERS annuity based on my high-3 salary; 2. Continue to be employed in the private sector; and 3. Leave my Thrift Savings Plan money where it is for now. Is there any reason not to do this, or any value in deferring this? My impression is that the annuity…
Q. I am retiring under FERS in a few months, and am looking for recommendations on how to best invest my Thrift Savings Plan dollars. I believe my options are to buy a MetLife annuity, leave the funds in my TSP account until I turn 71 years old (I am now 60), or roll the TSP dollars into an IRA or other type of investment account. I have approximately $350,000 and will receive my FERS retirement and eventually Social Security. Do you have any recommendations to roll the dollars into an investment account that I could occasionally draw from and that could draw…
Q. If I resign after 14 years of civil service and do not wish to cash out my Thrift Savings Plan, can I roll it over into a private-sector employer’s 401(k) without penalties? A. Yes.
Q. I am 59½ and would like to take advantage of the opportunity to take a one-time withdrawal. What are the tax consequences of taking a withdrawal of, say, $50,000? Does it have to all be rolled to an IRA to avoid a tax penalty, or can it come out as cash and part of it be put into an IRA and part put into a spending account for paying down bills/mortgage? A. Taking a withdrawal from your TSP account after reaching age 59½ will not generate a penalty. Any amount withdrawn and not rolled over will be treated as ordinary, taxable…
Q. My boyfriend worked as a civilian marine electrician in the Navy and he has a 401(k) plan or a Thrift Savings Plan. He’s not working with them anymore, and he wants to withdraw some money to start a new life. He does have a job, but it’s not enough to pay his bills, and he wants to get a divorce from his wife but has no money to even file it. I’ve read several articles and I think his best option is to directly roll over the plan to a traditional IRA, which avoids any penalty fees, but he…