Q: I plan on withdrawing money from my Thrift Savings Plan account for a residential loan. Can I continue my contributions and receive matching funds during the repayment period? Also, is it required that repayment is done through payroll deduction? As I intend to pay back the loan in 20 months from my wife’s income, I prefer to pay directly by check each month. A: You may continue to contribute and receive matching contributions while repaying your loan. Your loan must be repaid through payroll deduction.
Browsing: thrift savings plan
Q: I am currently on military leave without pay from the U.S. Postal Service and have been on active duty with the Air Force for about 12 months. When I was with the USPS, I was contributing 5 percent to the Thrift Savings Plan and receiving the available agency matching funds. During my period of active duty, I have been contributing 10 percent to the TSP with no matching funds. What are the rules or regulations with regards to agency matching funds upon my return to the USPS? Specifically, would I be eligible for any agency matching contributions during the…
Q: A few months ago, I read something about federal workers being able to deposit the lump-sum payment for unused annual leave into their Thrift Savings Plan accounts when they retire. Did this happen, or is it just a proposal? A: A bill (HR 4865) was introduced in March that would allow this rollover, within certain limits, if passed into law. It is still in committee.
Q: I am a federal employee with $60,000 in my nondeductible individual retirement account. I plan to convert it to a Roth IRA this year. I also have $120,000 in my traditional IRA which I do not plan to convert to Roth this year. To avoid the Roth conversion aggregation rule, my plan is to roll the $120,000 into my Thrift Savings Plan account before converting my nondeductible account to a Roth IRA. This way, the $120,000 will not be subject to the Roth conversion aggregation rule this year. Is this a valid way to avoid the rule? A: I…
Q: I am 58 years old and will turn 59 1/2 in March, at which point I will be able to empty my Thrift Savings Plan account without an early distribution penalty. However, I would like to access these funds now to pay for some of my son’s law school expenses. He is 30 years old and not a dependent. Is there any reason why I could not roll over some of my TSP funds into a traditional individual retirement account and then withdraw the funds from the IRA now so that I can use the money for the expenses…
Q: Once retired from the federal government, how long can you leave money in a Thrift Savings Plan account without designating how it is to be allocated? A: You can leave your money in the TSP and direct it — or not, as you see fit — until the IRS Required Minimum Distribution rules kick in.
Q: I have been separated from my spouse for six years, and he refuses to sign the paperwork for me to receive funds from my Thrift Savings Plan. What are my options? Should I just leave the money in the account? A: This is a divorce matter. You should consult an attorney.
Q: I am an employee under the Federal Employees Retirement System. I will retire in five years at age 56 with 37 years of federal service. I plan to continue working in the private sector and not make any Thrift Savings Plan withdrawals until I turn 62. I currently contribute 20 percent of my TSP money to each of the five funds. What is your opinion on this investment allocation? If it’s not favorable, could you provide an allocation that you feel would be in my best interest? Also, if I decide to delay my federal retirement until age 62,…
Q: I have all of my Thrift Savings Plan money in the G Fund, but I am worried about inflation. Is there any way to buy I Bonds or other inflation-indexed securities through the TSP? A: Not yet.
Q: My position was eliminated when I was 51 years old. I retired with more than 30 years of service. I would like to withdraw all of my funds from the Thrift Savings Plan; will I be required to pay the 10 percent federal penalty if money is taken out prior to age 59 1/2? A: Unless you meet one of the special exceptions to the early withdrawal penalty, you will have to pay it. For details, see the tax notice regarding distributions from your TSP account at the TSP website.