Q. I am a fully vested CSRS employee with the Environmental Protection Agency for 33 years at age 55. I have received my numbers, but I missed my first date to retire. How long does it take to receive my first full check? Worst-case scenario? Best-case scenario? And is there any way to speed up processing? When will I receive my annual leave payment? Will it be immediate in one lump sum without taxes since I already paid taxes on my leave? Should I take all of my Thrift Savings Plan out at once or leave about 10,000 in and…
Browsing: rollover
Q. The guidance on partial withdrawals from the Thrift Savings Plan is somewhat confusing if you have both a traditional and Roth portion. It says that withdrawals will be prorated between the two. However, is it possible to solely roll over the Roth portion into another Roth and still leave the entire traditional portion in tact? Or, since these are two distinct types of investments, can the Roth be rolled over into a Roth and the traditional be rolled over into a traditional in amounts, say $5,000 of one and $10,000, even if the balances are not in this same 1:2 ratio?…
Q. I am retiring from active duty in about six months. Almost one-third of my Thrift Savings Plan balance is from combat-zone tax-exempt contributions. I am looking to possibly roll my TSP into my next employer’s 401(k). What happens to the CZTE amount? How do I keep this amount tax exempt, and what are my options for this amount at retirement? A. Given that the TSP is the best retirement investment environment you will find, I urge you to consider maintaining your TSP account and maximizing its use for as long as possible. Unless there are some extraordinary circumstances, you…
Q. If I contribute $40,000 to my Roth TSP account, it grows to $60,000 and I subsequently leave government service and roll that Roth TSP into a Roth IRA, wouldn’t I be able to immediately withdraw up to $40,000 without tax or penalty, even though I’m less than 59½ and have not had either account for more than five years? A. Yes, it is possible to withdraw your contributions at any time without tax or penalty.
Q. I am 47 and hope to retire at my minimum retirement age in nine years. I contribute to both my traditional Thrift Savings Plan and Roth TSP. A publication I read, “Important Tax Information about Payments from Your TSP Account,” says you will not have to pay taxes for Roth contributions if you follow a two-step rule: Hold for five years + age 59½. But I think it also says that if I transfer my Roth TSP out of the TSP when I retire, the monies will not be subject to taxes. Is this correct? Can I only roll over…
Q. I am 66 years old and plan to retire in 2014, at which time I would transfer (convert) my Voluntary Contributions Program monies directly into a newly created Roth IRA. However, I have an existing (non-TSP) Traditional (substantial) IRA (never taxed), and know the Internal Revenue Service will aggregate my Traditional IRA balance for purposes of determining the taxability of this VCP-to-Roth conversion. If, prior to retirement, I (in 2013) transfer (direct rollover) my Traditional IRA into my existing Thrift Savings Plan account, will those monies now be considered 401(a), and therefore, making my subsequent VCP-to-Roth conversion occur with…
Q. I have a non-401(k) Roth IRA. Why can’t I roll it over to a TSP Roth IRA? Both are after taxes. A. The rules are the rules.
Q. Can you elaborate more on the “Ask the Experts” answer at http://blogs.federaltimes.com/federal-money/2011/02/16/rolling-a-portion-of-tsp-balance-into-self-directed-ira/. The answer seems to imply that under some circumstances, Thrift Savings Plan funds can be rolled over into self-directed IRAs. Can you explain the circumstances under which it’s legal, and can you provide references? I’d like to create a self-directed IRA for my husband, who is 45 years old and no longer in federal service, and then use the funds to purchase a rental property, with the monthly rents going directly into the IRA. A. Rollovers are allowed for TSP participants who are no longer federal employees or…
Q. On March 11, you wrote a response to a gentleman who was retiring from the Postal Service and had a question about moving his Thrift Savings Program to a civilian account. In your response you wrote, “You are not required to roll over your TSP account and may continue it for life. You should do everything you can to keep your money in the TSP for as long as possible, since it is superior to any other investment account you will find. Your TSP should be the last account you tap for retirement income.” That response raised a few…
Q. My husband is a Defense Department term employee. If his term does not get renewed in May, he wants to roll his Thrift Savings Program into my TSP. Would this be allowed? A. This is not allowed, but he may continue and manage his TSP account for life.