Q. My wife is retired under FERS with a Thrift Savings Plan account and I, too, will retire at some point under FERS with a TSP account. Both of us have individual IRAs. Can each of us consolidate the IRAs into our own TSP accounts? A. Yes, as long as they don’t contain money that is eligible to be withdrawn without being taxed (tax basis).
Browsing: withdrawal
Q. I know you can transfer a Thrift Savings Plan balance directly into a Roth and pay taxes on the entire amount, which are due at time of tax filing. This causes a tax burden that may be difficult to cover with personal funds. However, is it possible to withdraw the funds directly into your checking account and within the 60-day window, still roll over these funds into the Roth, but at a level that is net of taxes? This would allow a portion of the TSP withdrawal to cover the ultimate tax liability? A. This is a question for your tax…
Q. I turn 70½ this year and want to start Required Minimum Distribution withdrawals from the Thrift Savings Plan based on life expectancy. 1. Starting withdrawals now will not equal the total RMD amount required for the year (since withdrawals are paid monthly). Will TSP issue a “catch-up” payment before Dec. 31 to fulfill the total RMD? 2. My TSP account is allocated among all five TSP funds (based on percentages advised by financial adviser). Will TSP apportion the RMD from all of those funds and keep my designated allocation percentages? 3. TSP told me it will not withhold taxes on my RMD…
Q. I read one day this past week that federal employees who are retiring may be allowed to make a one-time withdrawal from there Thrift Savings Plan account at age 55 without penalty due to the fact they will receive a six-month reduced (estimated to be 50 percent) annuity until the Office of Personnel Management can reconcile the employee’s account. Where is that information in writing? A. I haven’t seen this in writing. If you read it, I presume that it must have been in writing. Where did you read it? The current law allows you take one or more…
Q. If you have a Thrift Savings Plan designation of beneficiary on file but you survive the maximum age to keep the money in the account and then are required to start withdrawing until the fund is depleted, what are your options to still disburse the money to the same beneficiaries? A. The beneficiary designation only applies to funds remaining in your TSP account at the time of your death, and thereafter. If you entirely deplete your account before you die, then the beneficiary designation is irrelevant.
Q. Does the withdrawal of your Thrift Savings Plan annuity affect the amount of your special retirement supplement or Social Security if it exceeds the maximum amount of money you are allowed to make under Social Security?
Q. I am a 66-year-old CSRS retiree with approximately $200,000 in the F Fund. I have no debts, and will likely leave my Thrift Savings Plan untouched until I am forced to start withdrawing it. I am concerned that when interest rates start to rise, bonds will drop and the value of my TSP account may fall. I am considering moving my TSP into the G Fund. However, since I don’t plan on a withdrawal soon, should I put move it to one of the L funds? A. The G Fund is the only TSP fund that does not pose…
Q. I am 59½ and would like to take advantage of the opportunity to take a one-time withdrawal. What are the tax consequences of taking a withdrawal of, say, $50,000? Does it have to all be rolled to an IRA to avoid a tax penalty, or can it come out as cash and part of it be put into an IRA and part put into a spending account for paying down bills/mortgage? A. Taking a withdrawal from your TSP account after reaching age 59½ will not generate a penalty. Any amount withdrawn and not rolled over will be treated as ordinary, taxable…
Q. My boyfriend worked as a civilian marine electrician in the Navy and he has a 401(k) plan or a Thrift Savings Plan. He’s not working with them anymore, and he wants to withdraw some money to start a new life. He does have a job, but it’s not enough to pay his bills, and he wants to get a divorce from his wife but has no money to even file it. I’ve read several articles and I think his best option is to directly roll over the plan to a traditional IRA, which avoids any penalty fees, but he…
Q. Are federal taxes taken out of the lump-sum payment for annual leave? And If I withdraw all of my Thrift Savings Plan upon retirement, will the tax be taken out before I receive the payment? A. Mike: A lump-sum distribution from your TSP will be subject to 20 percent minimum federal tax withholding. Reg: Yes, federal taxes will be taken out of your lump-sum payment for unused annual leave.