Browsing: Roth IRA

TSP transfer

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Q. My husband and I are looking at investing into a new hotel being built. I have worked in the hotel industry for 15 years, and this is a great opportunity for us. He has been active duty in the Air Force since 2011 and has roughly $20,000 in his TSP. Can he transfer his TSP balance to a Self Direct IRA to invest the money into the hotel deal? Are there penalties involved? He would continue his normal contributions to the TSP account as we move forward, but we are interested in using the $20,000 to invest in the…

IRA rollover

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Q. I am going to retire soon and plan to roll over my voluntary contributions to an existing Roth IRA. Can the voluntary contributions be rolled over to a TSP Roth account instead? A. No.

TSP contributions

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Q. I’m 23 and recently began my FERS career with the government this past May. I contribute 5 percent of my income and plan on increasing the amount by 1 percent every year and 2 percent every GS level increase. What would be the best spread across the five basic funds for someone willing to work 40+ years in government service with a moderate amount of risk? Additionally, is there a limit where increasing the percentage beyond a certain point (besides the $52,000 yearly max) begins to yield diminishing returns when compared to other investment methods? Finally are there any…

Lump sum, earned income

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Q. I’ll retire under FERS at the end of this year. Will the lump-sum payment for annual leave that I’ll receive early in 2015 would be considered earned income for the purposes of being able to contribute to my non-TSP Roth IRA? A. No.

Withdrawal fees

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Q. I want to pay off a few student loans before I retire from the military. I want to use my TSP to do so. Should I convert my TSP to a Roth IRA so I can avoid the heavy withdrawal fees? A. There are no fees for withdrawing money from the TSP. All withdrawals from the TSP (except contributions you made from tax-free combat pay) will be subject to income taxation and, unless you qualify for one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf, any withdrawal you take before reaching age 59-1/2 will be…

ROTH IRA contribution

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Q. If I were to retire Dec. 31, can the payments actually received in 2015, such as my last paycheck earned in 2014, payment for unused annual leave and buyout, if any, be used to fund a 2015 ROTH IRA? A. Paychecks constructively received in 2015 can be used as the basis for an IRA contribution to the extent that the income is earned income for this purpose. You annual leave payout is not considered earned income for this, however, and can’t serve as the basis for IRA contributions.

USAA Roth and TSP contributions

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Q. I took my tax info to a professional to have them done this year. I’ve maxed out my Roth IRA with USAA. I’ve also contributed about $2500 to a traditional TSP as a uniformed service member. I’m being told I’ll be penalized for my contributions to my Roth account since I have an employer-based retirement plan. Is this accurate? Can I only contribute a total of $5500 for both accounts? I’ve always been told to contribute to both. A. The TSP contribution limit is fixed and not contingent on any other factor. Your eligibility to contribute to a Roth…

Time restrictions for voluntary contributions to private Roth

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Q. I understand that it is possible to transfer Voluntary Contribution account deposits to a private Roth IRA (with any pre-tax interest earned going to TSP), but I’ve also been told there’s a five year ‘holding’ requirement for the Roth. I currently have a private Roth account that is more than five years old. Does the five year requirement mentioned in conjunction with the VC mean that the money should be placed into a new and distinct Roth account, so that an additional five years holding can be tracked, or can the VC contributions (without interest) be added to the…

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