Q: What happens with Federal Employees Retirement System unused sick leave and annual leave at retirement? I will have 2,080 hours at retirement and would like to cash that time in toward my Thrift Savings Plan. A: Based on the current regulations, the potential candidate for this maneuver would be unused annual leave, which must be taken in cash at retirement. Nothing definitive has happened on this yet, but it is under consideration.
Browsing: thrift savings plan
Q: In 2006, my financial adviser convinced me to take a one-time within-service Thrift Savings Plan withdrawal and roll it into an Individual Retirement Account for purposes of stretching the IRA withdrawals. My money was invested in a variety of funds within the American Funds group (all front-end loaded). Of course, my funds were decimated in 2007 and 2008, and I have yet to recover. Can I roll my IRA funds back into the TSP after having exercised the withdrawal? I am trying to rectify what I have come to believe was a serious error in judgment. I am 65…
Q: I retired three years ago at age 56 with 33 years of civilian service in the Civil Service Retirement System. I elected to take my Thrift Savings Plan contributions and roll them over to a qualified program. I began drawing off my investment in the fall of 2008. After talking to our tax adviser this year, I learned that I was penalized for early withdrawal in 2008 and will be again in 2009 because I will not be 59 1/2 until June of this year. After attending a retirement seminar several years ago, I was informed that because I was…
Q: I’m retirement eligible and in the Federal Employees Retirement System. I’m 60 years old and, after having paid for my military years, I’m two months away from 40 years of service. Does my Thrift Savings Plan account continue to draw interest as I receive my annuities? A: Your TSP account continues to produce the returns that accrue to the funds in which it is invested.
Q: I was told that if you withdraw money from your Thrift Savings Plan account, you are subject to a 20 percent fee and then also subject to pay taxes on the money as income at the end of the year. A: There is no fee to withdraw from your TSP account. Under certain circumstances, there will be a tax deposit withheld from your withdrawn amount, which will be credited against your tax bill for the year.
Q: I consider myself very good at saving money for and with my family as well as managing my family’s budget. We have a young toddler, and my wife and I are still building our family. I am 34, have been with FERS (active employee) since I was 33, and I have four years of active military time I am almost done buying back. I have my wife saving a little more than 11 percent of her incoming from teaching school (company doesn’t match), and I save 15 percent per paycheck (20 percent if you count my federal match). I…
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: After contributing $22,000, including age 50 catch-up contributions, in calendar year 2009, may I also contribute $6,000 to a traditional (nondeductable) IRA, which includes the standard $5,000 plus $1,000 age 50 catch-up? A: Your participation in the Thrift Savings Plan should not prohibit you from making the maximum nondeductible contributions to a traditional IRA in 2009.
Q: I regret that I can’t remember where, but I read that legislation or an amendment was being considered that would allow Voluntary Contribution Program funds to be transferred at retirement to a Thrift Savings Plan account. If this is the case, would there be a cap on what could be transferred? A: Currently, you may direct that the interest portion of your VC account be transferred to your TSP account, but not the principal. I can’t predict what may or may not be permitted in the future, or what limits might apply.
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…