Q. What are the answers to the below questions if under age 55? For instance, taking a early retirement option at age 53 — how would the TSP 10 percent penalty apply using the original scenarios in the question?? Original question: Q. I have read many of the articles and TSP literature and I am still a bit confused. As a federal law enforcement officer over age 55, I plan to retire later this year. I have read that if I want to take withdrawals from my TSP account prior to age 59½, I can do so without having to…
Browsing: TSP withdrawal
Q. I am exploring the idea of retiring from the postal service as a CSRS with 32 years at age 55. Can I just leave my money in the TSP? Some answers I read say you can keep it in, but I have also read that I have to withdraw it when I retire. I prefer to leave it and not touch it for at least 10 years. So what is it? A. You can, and should, leave your money in the TSP until you have to begin withdrawing it -– usually at age 70 1/2.
Q. I have read many of the articles and TSP literature and I am still a bit confused. As a federal law enforcement officer over age 55, I plan to retire later this year. I have read that if I want to take withdrawals from my TSP account prior to age 59 ½, I can do so without having to pay the 10 percent IRS penalty for early withdrawal, so long as I do it in an annuity (not interested) or, based on life expectancy (not interested as it provides more funds than I want at the beginning of my…
Q: If an employee has a TSP loan and decides to retire prior to the loan being paid off, can the person still select a payment option out to the TSP even though there is an amount owing to the TSP? And, if the person already took a one-time withdrawal, so that is not an option, does the loan have to be paid off before a TSP payout can be made? A: Yes, you may request a post-retirement TSP withdrawal if you have an outstanding loan. The loan will be declared part of your taxable distribution for the year.
Q: I am a CSRS employee and plan to retire Dec 31. I will meet the minimum age and years-of-service requirement for retirement. If I close my TSP account and withdraw all my funds prior to my retirement date, will I incur the 10 percent early withdrawal penalty? A: You’ll have to wait until you retire to close your account. If you withdraw your funds while still in service after you have reached age 59½, you will not be penalized for an early withdrawal. If you wait until you retire during the year in which you reach age 55, you…
Q: I plan to retire under FERS at the end of the year. My wife and I want to pay off our house with some of my TSP savings so we won’t have to worry about our mortgage. I was planning to take out about $6,000 a month until the mortgage is paid and then reducing the monthly amount to $1,000 or less after that. I wanted to do it this way because the tax burden would be about the same as if I was still employed. Is this a plausible plan and would I be able to do this…
Q: A retired USPS employee friend of mine told me that he was hit with a penalty because he started withdrawing money from his TSP account at the age of 60 instead of his retirement age of 62. Is this true? A: No.
Q: I retired two years ago as a CSRS retiree at age 60 and with a nice sum in my Thrift Savings Plan. I made a partial TSP withdrawal at that time to give me cash to pay off some bills. I have decided to buy a second home for tax purposes and would like to withdraw enough money out of my TSP account for the down payment. How could I get $50,000 out of my TSP when I already made a partial TSP withdrawal two years ago? Could I request monthly payments of $25,000 and get those two monthly…
Q: I retired when I was 55 years and 10 months old in February 2008. I did a partial transfer of my TSP to IRAs. There is approximately $10,000 left in the TSP. Would I be subject to the 10 percent tax if I withdraw it all? I will be 59 1/2 in October 2011. A: No.
Q: I plan to retire at the end of November 2011 with about $230,000 in my TSP. I need to withdraw about $25,000 to pay off a loan and I plan to transfer the remainder to an annuity. I understand the tax bite on the withdrawal will be about 20 percent. Would it be to my benefit to wait until after Jan. 1, 2012, to withdraw the $25,000 because I will be in a lower tax bracket as opposed to 2011 or does it matter? A: It might be. The answer will depend upon your specific circumstances and what happens…