Q. With the looks of it, the economy has been doing better. The “fiscal cliff” is concerning me. My wife and I both have about seven years and both put 10 percent into the L2040 Fund. I was thinking of moving both to a safer fund (G or F) for a while until a deal is in place and the economy is safe and stable. I was thinking of doing this to potentially avoid another year like 2008, or something like that if a deal is not made with the president and Congress. What are your thoughts of doing something like this…
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Q. I’ve been retired from the post office for a couple of years now and have left all of what’s in my Thrift Savings Plan account in the G Fund. I won’t be forced to take the required minimum distribution until about six years from now. Since I’m not an expert at investing in all of the different funds, I was wondering: Would it be a good idea to transfer my money into one of the L Funds until I have to start taking withdrawals? A. Yes.
Q. I just completed six years of service in the Army. I have been making contributions since I enlisted thanks to my supervisor at the time. I would like to know: what the penalty is for an early withdrawal. Also, will I be penalized for transferring it over to another retirement plan? A. The early withdrawal penalty is 10 percent of gains withdrawn, when it applies. You may roll your Thrift Savings Plan balance into an IRA or other qualified retirement plan to avoid the penalty and current taxation. Of course, you may leave your money in the TSP and…
Q. If I have $100,000 in my C Fund and 100,000 in the I Fund and transfer the balance to the G Fund, will the balance be $200,000 if nothing changes in the market overnight? A. Yes.
Q. Someone asked you online Oct. 8 if they could deposit funds into the Voluntary Contributions Program and transfer “the whole amount” into a Roth TSP. You said “yes.” The poster said they thought they could only transfer interest to TSP. By asking if they could transfer “the whole amount,” I believe they were wondering if they could transfer both contributions and interest. You have said as recently as an answer given on Sept. 24 that “You’ll have to use a Roth IRA for the after-tax portion of the VCP account,” and gave a corrected answer to a question posted…
Q. I’m CSRS. If I deposit funds in my Voluntary Contributions Program, I thought I could only transfer interest gain to TSP. Can I transfer the whole amount if I choose Roth TSP? A. You may not transfer or convert money into the Roth TSP. You could roll the money over to a Roth IRA, however.
Q. I received a packet from my previous employer that I needed to cash out or roll over my funds to an IRA or another retirement fund. I’m 48 years old. Where can I put this fund without having to pay a broker or a financial adviser fee? Is there a fund that I can roll this into without upfront fees or an annual fee? A. The best place for this money is your Thrift Savings Plan account. You can use form TSP-60 to request the transfer.
Q. I know I can move my money in the Thrift Savings Plan to an IRA (I’m retired) and pay no taxes doing so. But can I move my TSP to an IRA outside of the U.S. and still not pay any taxes during the transfer? A. An IRA as established by the U.S. tax code outside the U.S.? I’m not sure how that is even possible.
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…
Q. Regarding the Thrift Savings Plan and what can be deposited into my active TSP account: I was previously employed in a nonfederal job for which I had a 401(k) plan in which I was fully vested. After leaving the company’s employ, I rolled the 401(k) into an IRA. Now, I am thinking about taking the IRA and depositing it into my TSP. Is this allowed? Is there a maximum amount that can be rolled into the TSP? Where should I look to get the appropriate forms? A. You may transfer an unlimited amount of pretax money from a 401(k) or IRA…