Q: I’m retired from a government job. I want to roll my thrift savings into an IRA. However, I need a new roof on my house and I don’t have the cash I need and don’t want to put the cost on a credit card. Can I take a partial withdrawal from my thrift account to cover the repair, and then roll the rest of the money from the account into an IRA without penalty, since I took a distribution from the thrift plan first? A: Yes, as long as you haven’t already taken a partial withdrawal from your TSP…
Browsing: TSP withdrawal
Q: I will be 70 in February and realize I have until April 2012 to make my decision about how to distribute my funds. But I am doing my best trying to make a good decision. I am a CSRS retiree, single, no dependents, and have slightly less than $100,000, so not a huge amount. I spoke with a bank, and their advice was to withdraw the whole sum and roll it over into an IRA, which would be a Mutual Fund with a management fee of 1.6 percent. My thinking is that it would be better to take a…
Q: I retired under both CSRS and FERS (converted to FERS in 1998 after 22 years with CSRS) under 6C law enforcement provisions at age 52. At the time of my retirement, I chose not to take a withdrawal from my TSP account. I am now 57. When can I take a withdrawal from my TSP account without penalty? At the time of my retirement, I was led to believe that I could do so at age 57 1/2. I am now being told I must wait until age 59 1/2. A: You’ll have wait until age 59 1/2 unless…
Q: I am 53 years old, and I was a U.S. Postal Service employee with 20 years of service under the Federal Employees Retirement System. I took disability retirement from the USPS in March after suffering injuries in Iraq as a reservist. If I take a full withdrawal from my Thrift Savings Plan account, will I pay a penalty to TSP, and at what percentage? How much will I have to pay in taxes? Will the USPS match my TSP balance? And how long must my money stay in a TSP account before I can make a full withdrawal without…
Q: I retired Nov. 30 from the Foreign Service at age 60 and have a substantial sum in my Thrift Savings Plan. I would like to make a partial withdrawal in the near future to give me cash to renovate my house. In the future, when I decide to make a complete withdrawal, it looks like I could do a combination of a second lump-sum payout and a series of monthly payments. Am I reading the rules wrong? Can I indeed make this second lump-sum withdrawal? A: Not unless the lump-sum withdrawal is the terminal withdrawal at the end of…
Q: Mike Miles answered a recent question about Thrift Savings Plan withdrawal by saying that the person making the withdrawal pays the taxes and penalties when filing a tax return, but that the TSP will withhold 20 percent for future liabilities. I’m not sure what that means: If the taxes and penalties are paid when we complete our tax returns, why does TSP withhold 20 percent, and what happens to that money? What could be a future liability? Do we ever get the 20 percent back? A: The TSP withholding is mandatory; the 20 percent will be deposited with the…
Q: I am retired military, and I want to withdraw the full amount of my Thrift Savings Plan account. Will I pay the tax and penalty immediately, or will I pay when I file my 2011 taxes? I have about $14,000 in my TSP. In other words, will I recieve the full amount or will it be taxed first? A: You won’t actually be required to pay the tax and penalty until you file your return, but the TSP will withhold 20 percent from your payment as a deposit against future liability. You may not reduce this withholding, but you…
Q: I plan to retire from a federal law enforcement position at the end of February. I am covered under the Federal Employees Retirement System and will have an outstanding Thrift Savings Plan loan balance when I retire. I assume that there will be some type of “demand for payment” notice sent by TSP, and if I don’t repay the loan by a certain date, the balance will be considered a withdrawal. Will the TSP deduct the 10 percent penalty from my account, or will they bill me? Will the “withdrawal” be taxed along with my regular income on my…
Q. I am 73 years old and still working for the government. Am I still required to remove funds from TSP even if working for the government and depositing TSP funds with them? A. No.
Q. I am a widow, CSRS, retired. I will have approximately $55,000 (before taxes) when I am 70 1/2 (January 2017). My birthday is July 1946. I am a widow; file single; do not want an annuity. I know my circumstances and the law could change a lot before then. Would they take 20 percent or 30 percent before giving it to me? Any suggestions? A. Under the current rules, if you take a required minimum distribution as a single, partial withdrawal, it will be subject to 10 percent tax withholding unless you elect to have a larger amount withheld. If…