Q. If I receive a Voluntary Early Retirement Authority at age 54, when and what options will I have to withdraw money from my TSP account? It is my understanding I have to be 55 before I can withdraw money without the penalty. I assume I would be able to start the date I turn 55 and if that is true, are the same withdrawal options available to me as if I retired after I turned 55? Also, if I take monthly payments, when can I change those? A. Once you separate from service, you may take a lump-sum withdrawal…
Browsing: TSP withdrawal
Q: Are monthly payments taxed? Is there any way to get around paying so many taxes on your TSP withdrawals? A: Your TSP withdrawals, unless they are rolled over, are taxable as ordinary income.
Q: Market volatility has me scared. Is there a way to cancel a withdrawal request if the various fund (C, I, and S) values are below a certain amount? Or do I simply put in my withdrawal request and take my chances? I have already taken my one-time withdrawal, so my next one will require me to close my account and transfer the funds to an IRA. A: You put in your request and take your chances. If you’re so nervous, why not move your funds into the G Fund until the withdrawal is complete? Better yet, request monthly payments…
Q. 1 will turn 70 in July 2012 and would like to know when I must begin withdrawing from my TSP and is there a certain amount that I must withdraw? A. Since you will not be 70½ until 2013, your first withdrawal will be due by April 1, 2014, the year after the year in which you reach age 70½. This withdrawal will be for 2013, and your subsequent withdrawals will be due by Dec. 31 each year beginning with 2014. The minimum amount due each year is a moving target based on your life expectancy. Fortunately, the TSP…
Q. I’m a FERS employee with the U. S. Postal Service and plan on taking a monthly TSP withdrawal when I retire at 64. I assume that the dollar amount can be changed either up or down at the beginning of each year. Is my assumption correct? A. Yes.
Q. Is there a way to withdraw money from my 401k or TSP without paying a tax penalty, in order to use the money to pay for college tuition for a child? A. The rules are complex, but there are ways around the early withdrawal penalty. Read the notice at the following link for more information: https://www.tsp.gov/PDF/formspubs/octax92-32.pdf. Pay particular attention to the left side of Page 4.
Q. I am retiring Nov. 30 and considering using a lump-sum withdrawal from my TSP to pay off my mortgage. I have read material at the TSP website and Googled my questions but not found a clear answer about the tax withheld. What is the federal tax percentage on a lump-sum withdrawal? I am 63 ½ and not withdrawing all funds. I would be making one withdrawal, leaving the balance to continue the investment, and no intention of future withdrawals. A. The TSP will withhold 20 percent of the distributed amount for federal taxes.
Q: I plan to retire next year. Can I leave my TSP contributions in the TSP and take no monthly payments/distributions at this time? Are there any negative consequences to this decision? A: Yes, you may. There are no negative consequences, and I advocate that you leave your money in the TSP for as long as possible.
Q: I’m 51 and have 27 years of postal service. If they pass a layoff or RIF, they broke the contract for me to save for my future. I would be retired in there eyes, why not let me have my TSP to pay off my home loan. I also have debt I would like to pay off. It’s not right to lay someone off before their time, then penalize them for drawing their money out. A: Ask your elected representatives why they won’t change the law.
Q. If I opt to take a monthly withdrawal from my TSP pension, can I take a lump sum any time after that if I change my mind? A. Yes, if it is full and final withdrawal.