Browsing: TSP distribution

Q. I have an outstanding Thrift Savings Plan loan, and I just turned 59. I plan to continue to work for some time. After age 59½, can I pay off this TSP loan from other personal funds, then immediately withdraw those funds from the TSP without penalty if I need them for other purposes? With no loan balance remaining, would I then be eligible to take out another TSP loan? A. You may repay the loan, take a distribution and then take another loan, but 60 days must elapse between the two loans.

Q. I have worked for the Postal Service for 24 years as a postmaster. I would be able to take an early out if it was offered. I want to borrow on my TSP for a residential loan. If I make a 10-year loan from my part of the TSP next month and then the Postal Service offers an early-out retirement and I take it, will I have to continue making the payments? Also, when I do retire, will I be able to pull out all my savings in TSP? A. If you retire, your outstanding TSP loan will become…

Q. I’m a federal law enforcement officer and I’ll be retiring in March after 25½ years of creditable service. I intend to take my Thrift Savings Plan funds when I retire and receive monthly payments based on my life expectancy. I understand this life expectancy option and an annuity are the only ways I can eliminate the IRS 10 percent penalty for early withdrawal since I’ll be 53 when I retire. The TSP manual (on page 16) states I have a one-time opportunity to switch from the life expectancy payments to specific dollar amount payments. I called the TSP representative…

Q: At a recent retirement seminar the speaker stated that if you passed away, your spouse would be able to receive the balance of your TSP account, but your children would not. He stated it would go back to the government. Could you please tell me how this would work? My husband and I are both federal employees and both have TSP accounts. A: Not true. Your TSP is paid out according to your beneficiary designation. If your designation is not on file, your account will be distributed according the following statutory order of precedence: 1. To your widow or…

Q. I’m a widower retired on CSRS with a pension that provides me with enough to live on. I’ll turn 70½ in 2012 with about $200,000 in my Thrift Savings Plan. Starting in 2012, I plan to take the required minimum distribution from my thrift plan each year. The question is how to allocate my money in TSP — which plans to put my money in. A. The answer depends upon your goals for the money, and how important it is that it achieve those goals. Your question is like asking which way you should turn the wheel in a…

Q.  It is my understanding that it takes 31 days after retirement date (this Nov. 30) for your TSP to be processed. What happens if, due to the process time, you don’t have time to meet the 60-day rollover? It is also my understanding that after age 55 up to 70 1/2, you can take out any amount you need as long as you pay the tax owed. However, once you start taking, will this be used to meet the RMI for all your total  IRA no matter which one you take from. A.  The 60-day rollover window starts from…

Q: Each year when my husband receives his minimum distribution from his TSP, the documentation shows a breakdown of where the monies are coming from. Within each fund there is a breakdown of deferred compensation, savings, rollover, DEC/IRA and employer match. So each year some of the minimum distribution is coming out of a regular IRA. (There was a short period of time in the 1980s when money within the Thrift Plan could be assigned to an IRA. I seem to remember it did not last for very long.) Can that portion of the minimum distribution that was originally in…

Q. I am a FERS employee, still working and plan to retire on Jan. 12, 2013 when I will be 74 years of age (my initial RMD has been delayed as I am still employed). Note that 2012 has 27 pay periods. Since I will be employed through all of 2012, when I retire, will I be required to take a RMD for 2012? Will my first RMD be for 2013 payable by the end of 2014? A. Your first required distribution will be for calendar year 2013 and the distribution will be due by April 1, 2014.

Q. I am a clerk with almost 28 years’ service in the Postal Service and am 60 years old. If I decide to retire this year, can I choose a monthly allotment from my TSP and then when I am 62, change the amount of that allotment from when I retired at 60? Or am I locked in to that amount? A. You may change the amount of the payment once each year in January.

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