Q. I am 47 and hope to retire at my minimum retirement age in nine years. I contribute to both my traditional Thrift Savings Plan and Roth TSP. A publication I read, “Important Tax Information about Payments from Your TSP Account,” says you will not have to pay taxes for Roth contributions if you follow a two-step rule: Hold for five years + age 59½. But I think it also says that if I transfer my Roth TSP out of the TSP when I retire, the monies will not be subject to taxes. Is this correct? Can I only roll over…
Browsing: withdrawal
Q. I will be 59½ this time next year. I would like to withdraw a one-time lump sum. What is the tax percentage rate I would pay in federal and state (Michigan) taxes? A. The answer will depend entirely on the tax code and your tax return for the year of the withdrawal.
Q. I am 64 years old and will be retiring in a year. I have 15 years with the federal government. Do all of my Thrift Savings Plan contributions have to be withdrawn prior to a specific age? I also understand that my total TSP account will be charged 20 percent. Am I to understand that after the 20 percent is subtracted from my TSP account, I have to pay income taxes per year for withdrawals I make from my TSP account that will be added to my total gross income? A. You will be required to begin taking minimum annual distributions…
Q. Can you elaborate more on the “Ask the Experts” answer at http://blogs.federaltimes.com/federal-money/2011/02/16/rolling-a-portion-of-tsp-balance-into-self-directed-ira/. The answer seems to imply that under some circumstances, Thrift Savings Plan funds can be rolled over into self-directed IRAs. Can you explain the circumstances under which it’s legal, and can you provide references? I’d like to create a self-directed IRA for my husband, who is 45 years old and no longer in federal service, and then use the funds to purchase a rental property, with the monthly rents going directly into the IRA. A. Rollovers are allowed for TSP participants who are no longer federal employees or…
Q. I am below the age for Thrift Savings Plan withdrawal without penalty (soon to be 50), but it looks like I will be out on workers’ compensation under permanent disability shortly. Due to the impact on my income and an ongoing issue, I need to make a withdrawal or close my TSP to continue meeting my obligations. I have thoroughly researched the issue of using a TSP but have little choice. A loan is not an option (I’m paying one off and, if I’m on disability, I can’t take one out). And I’ve looked into other avenues, to include…
Q. Can I take $20,000 out and get a monthly annuity from the rest of the money? A. Yes.
Q. I will be retiring very soon. Can I withdraw some of the money in the Thrift Savings Plan and leave the rest there to buy an annuity later when the interest rate is better? A. Yes.
Q. I’m a recent federal retiree and was attempting to rollover my Thrift Savings Plan account to an IRA. I filled out the proper forms and had the financial institution where I’m rolling over the funds complete its section (Page 4), as well. I faxed the TSP withdrawal form as instructed. After a couple of weeks, I received a check (minus federal taxes) in the mail. I called the TSP hotline and they said that they received all of the pages of my form except for Page 4. They said that Page 4 was missing but the pages following Page 4 were…
Q. I have a general purpose loan and am planning to retire soon. If I choose not to repay the loan and take a tax distribution, will I still be entitled to make one partial withdrawal after retirement? Or will the unpaid balance of the loan be considered my one-time partial withdrawal? A. The unpaid loan does not count as your partial withdrawal.
Q. I am thinking of retiring soon and am considering taking a one-time post-retirement withdrawal from my Thrift Savings Plan to cover some debts so that I can live on my annuity. When requesting such a withdrawal, do you have to be retired both on the day it is requested and the day the money is disbursed, or can it be requested a few weeks before my last day assuming it will take some time to process and so I would not get the money until after I am already in retired status? I realize that we are probably only…