Browsing: Roth IRA

Q: In answering a previous question about maximum nondeductible contributions to Individual Retirement Accounts, you wrote: “Your participation in the Thrift Savings Plan should not prohibit you from making the maximum nondeductible contributions to a traditional IRA in 2009.” Is the answer the same if I have a Roth IRA instead of a traditional IRA? Can I max out both TSP at $22,000 and ROTH IRA at $6,000? A: The rules are different for Roth IRA contributions. You’ll have to use an online calculator or the rules contained in IRS Publication 590 to see if you can contribute to both.

Q: I retired last year under the Civil Service Retirement System and have read that the rules for Roth IRAs have changed. Can I roll over my Thrift Savings Plan money to a Roth IRA in order to reap the tax-free benefits down the road? I’m 61, and will not be eligible for Social Security. If I can roll over the money, is there a limit as to how much? A: You may convert your TSP funds to a Roth IRA and there is no limit on the amount. However, you should carefully consider whether this would be in your…

Q: My 2010 “annual” required minimum distribution from my Thrift Savings Plan will be approximately $8,500 (about $710 per month). My “monthly” withdrawals will be $2,000.00. If I roll over to a Roth IRA that part of my withdrawal that exceeds my required minimum distribution, can I start deposits to my IRA of $1,290 in January and each month after that, or do I have to wait until May, at which time my entire “annual” required minimum distribution will be met before I can make deposits to my Roth IRA? A: The limits are annual limits, so what matters is…

Q: I will be retiring on Jan. 1. I recently contributed $50,000 to my Voluntary Contribution account. This is my first contribution to this account, and upon retirement I would like to transfer the entire balance directly to a Roth IRA. I have an existing Traditional IRA (never taxed and balance of approximately $65,000) and a Thrift Savings Plan account of approximately $245,000. My goal is to transfer the entire amount of my voluntary contibution directly to an existing Roth IRA upon retirement. My thought is that the only tax I would owe on this conversion would be the few…

Q: I plan on retiring in 2010 under the Civil Service Retirement System. I have recently opened a voluntary contribution (VC) account but only have put $25 into the VC account. I plan on putting a large amount of money in the VC account once I retire and then roll over only the after-tax contributions in the VC account into a Roth IRA. Will conversion of the VC account into a Roth IRA require that I aggregate my other IRA balances for the purpose of figuring out the taxable amount of this conversion? A: This is really a question for…

Q: I have mutual funds and Roth IRAs with an outside company. Could I roll everything into my Thrift Savings Plan account? A: You can transfer traditional IRA or Qualified Employer Retirement plan balances that contain no post-tax dollars (non-deductible contributions) into your TSP account. You may not transfer Roth IRA money or non-IRA mutual fund balances into the TSP.

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