Q. I am in FERS and I am planning to pay in full my CSRS redeposit service balance for my 17 years of prior CSRS service. I want to pay via direct transfer of a check sent on my behalf from the Thrift Savings Plan to the Office of Personnel Management. TSP tells me it is permissible, and all I need OPM to do is to fill out TSP Form 75 and have OPM check that it is an eligible retirement plan and include the address where to mail the check. This would be a trustee-to-trustee direct transfer. Three different…
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Q. I recently turned 59½. I want to do the following with my retirement account, which the Thrift Savings Plan does not allow: I want to be able to withdraw small amounts of funds from time to time from my retirement account, generally limited to a portion of the gains earned by the account. TSP allows a one-time in-service withdrawal. I want to have the ability to make transfers between funds. TSP limits transfers to two per month, but if the first is into equities and the second is into the G Fund, effectively that means only one transfer into equities a month.…
Q. I retired from active duty in December 2011. I accepted an appointment to a government service position in October 2011 and established a FERS Thrift Savings Plan account. I did not move any of my TSP account balance accumulated during my time on active duty into my FERS TSP account, so I currently have two accounts. Am I eligible to take out a loan against the TSP account balance still residing in my [previously] active-duty account? If not, can I transfer all or part of my [previously] active-duty account into my FERS TSP account with the goal of taking…
Q. I am CSRS and will be retiring next year. I will be making a contribution (after-tax) to the Voluntary Contributions Program before retiring. I have an existing Roth IRA (after-tax), reflecting contributions I have made over the years. I do not have a traditional IRA (pretax). I do, however, have money in the Thrift Savings Plan (pretax). I plan on converting the VCP contributions (after-tax) to my Roth IRA (after-tax) at retirement. Any interest earned (pretax) in the VCP will be transferred to the TSP at retirement. After doing some research on this and reading IRS Pub 590, it…
Q. I am a 55-year-old Veterans Affairs Department firefighter covered under CSRS with 35 years of service. I am planning on retirement next year. What are my options with my Thrift Savings Plan account when I retire? Can I withdraw funds for college without a penalty? Can I withdraw funds and transfer into a new IRA without penalty? Do I only have one time to decide what to do with these funds once I retire — withdraw all and reinvest or take a monthly annuity? A. Since you are retiring during or after the calendar year in which you reached…
Q. I have been a retired CSRS employee for more than two years and understand that I can transfer my traditional IRA to the Thrift Savings Plan, where the expenses are much lower. Some portion of my traditional IRA contributions in my early career years was tax-deductible. How would that be treated when I move the funds to the TSP and eventually start withdrawals? Or do you recommend I transfer the traditional IRA to TSP since some of my funds are tax-deductible? A. I think you mean that your IRA contains money that has already been taxed. That is, contributions that were…
Q. I will be 59½ in August. I would like to make an in-service withdrawal from my Thrift Savings Plan. At this time, I have a loan out on my account. Do I need to repay this loan before I take an in-service withdrawal for the total amount in my account, and how much tax will I be charged for this withdrawal? A. You do not need to repay the loan before taking an age-based in-service withdrawal. The automatic tax withholding rate on these withdrawals is 20 percent unless you transfer your payment to another retirement plan or account.
Q. Three years ago, I let myself be persuaded to withdraw 50 percent of my Thrift Savings Plan and place it in a private qualified retirement account. I did this at age 61, and this was my one-time withdrawal, so there were no penalties. I regret doing this. Before I retire, can I transfer this money back into my TSP without any issues? The other option is to use this private account to purchase a fixed annuity and draw off of it during the first years of my retirement thus leaving the other half of my savings (in Thrift) alone…
Q. I am currently employed with 10 years service accrued in the Federal Employee Retirement System. If I were separated/left federal employment for the private sector, would I be allowed to roll over the entire contents of my 401(k) account (acquired via my new employment) into my Thrift Savings Plan? Similarly, if I were to retire from federal employment, would I be allowed to roll over the entire contents of any 401(k) account(s) (acquired as a result of any previous private-sector employment) into my TSP? A. As long as you maintain your TSP account, whether employed, separated or retired from federal…
Q: If I retire from the Foreign Service this year at age 50, I would like to continue to save for the traditional retirement years (after age 70). What is the best way to do that? Can I contribute to my Thrift Savings Plan for years to come via IRA transfers using form TSP-U-60? If so, are there constraints? A: The best way to save will depend upon your circumstances and goals. There is no correct, one-size-fits-all answer. Under current rules, you may continue to move money into your TSP account from an IRA account, indefinitely, with no limit. Keep…