Q. I’m 47 and plan on retiring at 56 with 34 years of service. If I open a Roth Thrift Savings Plan account, can I withdraw all of the money from the Roth account and withdraw a small monthly amount from my traditional account when I retire? The TSP website says I can make withdrawals (1) on a prorata basis between the Roth and traditional accounts or (2) you can separately transfer any portion of your Roth or traditional account to an IRA or other eligible employer plan. I wanted to withdraw all of the Roth money while my husband is still…
Browsing: Roth TSP
Q. I am 54 years old and I have 30 years of federal service under FERS. Should I start a Roth TSP at age 54? I was born in March 1958. I plan to work until I hit full Social Security, which, I think, is 67 or maybe 66. Bottom line: If I were to start the Roth TSP until retirement at age 67 or 66, which is 13 or 14 years from now, is it worth my time and effort? My current Thrift Savings Plan is about $230,000 as of July. Six years from now, about March 2018, I will be…
Q. I am a federal civilian with 20 years of service (12 to 15 years to go). I have more than $200,000 in my 401(k) plan. The new Roth IRA option sounds appealing to me, since I’d rather pay tax on my retirement money now, while I’m employed. If I start changing some of my biweekly allocations to the Roth option, am I negating the benefits of the Roth by contributing less to the “big pot” of my existing 401(k), reducing the compounding interest? I don’t want to end up robbing Peter to pay Paul. A. Directing your contributions to…
Q. I am a young federal employee with three years of service with the Department of Agriculture. I have contributed 10 percent (5 percent matched) into my traditional Thrift Savings Plan. As I understand, I would lose the 5 percent government-matched money if I move all of my contributions to Roth TSP. Would it be best to open an additional Roth TSP to my traditional TSP, or structure it differently? A. You will not lose your matching contributions if you shift your contributions to the Roth TSP.
Q. I am a FERS employee who has 12 years before I can retire. I have already invested $4,000 in a Roth IRA for 2012 and switched all of my Thrift Savings Plan contributions to the Roth option in May. My financial adviser said I could not invest more than a total of $5,000 in both Roth accounts for 2012 and told me to switch my contributions back to the traditional TSP. Is he correct, or can I invest the $4,000 in the Roth IRA and $17,000 in the Roth TSP? In other words, can I still invest the annual…
Q. I have an existing Roth account with AmeriFund. The beneficiary to this fund is my daughter. If I roll this over into the Thrift Savings Plan, can I still have my daughter beneficiary and my husband beneficiary of my traditional TSP, since the funds remain in separate pretaxed and nontaxed accounts? A. One beneficiary designation will apply to both the traditional and Roth balances in your TSP account.
Q. Will it be possible to convert a normal Thrift Savings Program account to the new Roth option? I understand that the taxes due would have to be deducted, but I’m curious as to whether or not it is even possible. A. This is not allowed.
Q. My spouse (a federal employee) and I contribute the maximum allowed to the Thrift Savings Plan each year, regular and catch-up. Can we still contribute to a Roth TSP over and above the limit? A. Your Individual Retirement Account contributions do not affect the limits for TSP contributions. Your TSP eligibility, along with your income and other factors, may affect your IRA contribution limits, however.
Q. I am a FERS employee. I am interested in rolling over my outside Roth IRAs into the Thrift Savings Plan’s new Roth IRA. Can I do this? If so, how do I go about it? I am paying too much in fees for small amounts. A. Unfortunately, this is not permitted by the TSP.
Q. I am a CSRS employee who is considering retirement in 2013. I have a Voluntary Contributions account and also contribute to the regular Thrift Savings Plan. If I open a new Roth TSP account, would I be able to roll over my Voluntary Contributions account into the Roth TSP at retirement? A. [The following is a corrected and updated response to the question.] No. The Internal Revenue Code permits designated Roth accounts to accept transfers or rollovers only from another designated Roth account. Roth TSP balances are designated Roth accounts (or are treated like designated Roth accounts). The VCP is…