Q: I have tried to solicit your opinion several times concerning the taxation of Thrift Savings Plan distributions to individuals who had their contributions taxed going into TSP (because New Jersey doesn’t recognize the tax-exempt status of TSP), but have never received any response. A: I apologize if you did not receive the response you were looking for. I was not aware that I had overlooked any questions. Please submit your question again and I will respond promptly.
Browsing: thrift savings plan
Q: My wife and I are both 56 and planning to retire in the next couple of years. Is it possible for my wife to transfer her Army nonappropriated fund employee 401(k) funds into my Thrift Savings Plan account? A: Only if the account contains no after-tax contributions.
Q: My husband is 60 years old and plans to leave his federal agency by Dec. 31. Is it possible to do a partial withdrawal (in-service) based on his age, then roll the balance of his Thrift Savings Plan account into an individual retirement account when he leaves his job? A: Yes, as long as he hasn’t taken a partial withdrawal in the past.
Q: I am a new federal employee coming from a private-sector employer where I had a 401(k) and a 403(b) plan managed by ING. Should I roll these plans over into my Thrift Savings Plan retirement account? I also have another 401(k) plan managed by Merrill Lynch; should I roll that over ? A: Yes.
Q. If I have an outstanding loan when I retire, how is that handled? A. If you don’t promptly repay the loan, it will be declared a taxable distribution
Q. If I am 55 when I retire, I cannot access my traditional IRA without penalty until I reach 59 1/2. If I transfer the IRA into TSP, does that restriction no longer apply? In other words, can I transfer my IRA to TSP, retire at age 55, and withdraw the mingled funds from TSP without penalty? A. Yes, and in other words, yes
Q: Is it possible to set up monthly payments from your Thrift Savings Plan account and then later have the TSP use part of your funds to purchase an annuity while continuing those payments? Or must both withdrawals be set up at the same time? A: It is not possible to take a partial withdrawal for a TSP annuity while continuing monthly payments.
Q: I will be retiring, hopefully, at age 56. I have been investing in the Thrift Savings Plan since 1987, contributing the maximum amount allowed (15 percent). At age 56, can I set up an annuity with TSP requesting a small amount each month and still receive interest on the amount left in my account? A: Yes, as long as you haven’t already taken a partial withdrawal. Use a partial withdrawal to purchase the annuity and leave the rest in your account until you need it.
Q: I plan to retire from the U.S. Postal Service on Dec. 31. Any word on the proposal to roll over terminal annual leave into the Thrift Savings Plan? A: Not that I’ve heard.
Q: Let’s see if I’ve got this right: If I request monthly withdrawals from my Thrift Savings Plan account and change the amount each year, I’ll be able to receive a monthly check for life and still be able to build my principal, which I can pass on to my children or grandkids. Does TSP have such a plan? What option is it and how does it work? If I need some emergency money, would I be able to make a withdrawal from my principal? A: You may request a full withdrawal as fixed monthly payments. You set the amount,…