Browsing: withdrawal

Retirement withdrawal

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Q. I retired April 1st this year at age 72. When do I have to start taking money out of my 401k and what percentage would it be? A. I don’t answer questions about 401k accounts in this forum, but I will answer the question as though it was posed about the TSP. Your first RMD is due by April 1, 2015. I can’t calculate the amount of the RMD from the information you’ve provided, but you can do it using the instructions contained in IRS Publication 590 or using an online calculator from a trustworthy source.

Partial withdrawal, Part II

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Q. I retired from an air traffic control job at age 53. I am receiving monthly payments based on my life expectancy. I will be age 55 in April. Can I take a partial withdrawal? If not, are there any options? I need to access more funds. Will there be a tax penalty on the amount I have received? Will my partial withdrawal be penalty-free now that I am 55? Are there other options, such as increased monthly payments? A. You may not take a partial withdrawal once monthly payments have begun. You may increase your monthly payment amount using…

Partial TSP withdrawal

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Q. I am 60 and had to retire early due to disability. I am receiving Social Security disability and a small annuity. Can I take a small amount — say, $10,000 — from my account but then start monthly draws when/if it becomes necessary? Should I leave all of my money in this account or do a rollover into a regular or Roth IRA? A. Yes, as long as you have not previously used your single partial withdrawal. I think you should retain your Thrift Savings Plan account for as long as possible.

Lump-sum and monthly TSP withdrawals

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Q. I anticipate starting monthly withdrawals from the Thrift Savings Plan in the near future. Sometime after this, I would like to make a one-time lump-sum withdrawal from TSP to pay for my daughter’s wedding. Can I do this? Can I make a lump-sum withdrawal while taking monthly payments, or am I limited to one or the other? A. You can take the lump-sum partial withdrawal before starting the monthly payments, but not after.

Full TSP withdrawal

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Q. I am 67 and retired. I made a partial withdrawal a few years ago. I need some cash for a family matter, so I want to make a full withdrawal now. I don’t want an annuity, but I’ll invest half in a commercial IRA or retirement instrument in hope of reducing the immediate tax impact of this full withdrawal. Can I do so? — that is, invest half of this full withdrawal in another commercial instrument, thus avoiding for now the tax on this “re-invested” amount? A. Yes.

TSP withdrawal strategy

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Q. I have heard that some people are taking a monthly Thrift Savings Plan withdrawal that will have all funds sent to them over a period of 119 months (less than 10 years). Looking through TSP manuals, I haven’t figured out why yet. What are the advantages/disadvantages for this strategy? A. Check Page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. Payments expected to last less than 10 years are eligible for rollover but subject to 20 percent mandatory withholding. I’m not sure that the advantage is.

Early withdrawal penalty

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Q. I will be 52 years old March 9. I am covered under FERS, and I have 31 years of federal service. If my base offers an early-out this year, I plan to take it. I have a substantial balance in the Thrift Savings Plan and would like to withdraw it in its entirety when I take the early-out so I can invest it in my daughter’s business. 1. Will I be penalized for withdrawing my TSP funds early? If so, how much? I know I will be taxed, and I am OK with that. My husband plans to keep…

TSP withdrawal

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Q. I am 70½ and separated from federal service since 2008. I need to make a withdrawal election (my Thrift Savings Plan has $180,000). I was told I have three options: withdraw the account as a single payment, monthly payments or an annuity (or a combination). Assuming I do not need the money right now, what is the best option to maximize the interest I am getting and paying taxes on what I’ll be withdrawing? A. If you don’t need the money, I suggest that you begin fixed monthly distributions in an amount that will satisfy or nearly satisfy your…

Using TSP withdrawal to pay off debt

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Q. I am soon to be 65 and plan to retire within the year and have debt in the amount of $67,000. This is not including my home, car, etc. I have been considering withdrawing a large amount from my Thrift Savings Plan to pay this debt. With my pension and Social Security benefits, if I figured correctly, I would be bringing home about what I do now after taxes. I know it’s personal preference, but is it a wise decision? A. I can’t say if it’s the best course of action, but the debt needs to be paid. The…

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