Q. I was enlisted in the Marine Corps from 2004 to 2008 and have been a full-time employee at the Social Security Administration since March 2012. So, I have a uniformed services Thrift Savings Plan account and a civilian TSP account (using pretax and Roth contributions). Nothing has been contributed to the uniformed services account since I left the Marines in 2008, so I asked someone in human resources here if I could combine the accounts. I was initially told this wasn’t possible, but after my own research, I found Form TSP-65 – Request To Combine Civilian and Uniformed Services…
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Q. Could you clarify for me the following: I wish to withdraw funds from my Thrift Savings Plan account (by submitting Form TSP 70, as I am told). To get monthly payments, in section IV, I fill No. 23c: 100% for monthly payments, fixed amount (greater than my RMD). Suppose two years from now, I want to withdraw the remainder of my TSP funds in one lump sum. Am I allowed to do so? How? By submitting another TSP70? A. Yes, you may terminate the monthly payments and request a final distribution using Form TSP-79.
Q. The following question/answer was recently posted. Where can I find the full information to support the answer? Are there penalties involved? Q. I will be 55 this month and plan to retire in November with 33 years of service under CSRS. Do I have to wait until I am 59½ to withdraw from my Thrift Savings Plan? A. Not if you wait until you’re retired to request the withdrawal. A. Check Page 7 of this notice: https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
Q. I retired in July 2013 and have $500,000 in my Thrift Savings Plan. I need more money to support retirement and would like to take a lump sum of $30,000 out of TSP. I was thinking about taking the rest of the money as an allotment. Does this make sense? I have delayed my Social Security until I am 66 (I’m 64 now). My wife is taking her Social Security. A. Waiting to claim Social Security is probably a good idea unless you have a shorter than average life expectancy and are single. If your only other source of…
Q. I did a partial withdrawal from my Thrift Savings Plan last year at age 60. How do I report the income on my tax return? Is it strictly income? Are there no capital gains to report? If there are gains, how do I determine what the gains were? A. You will receive a 1099 reporting the distribution, which will be taxed entirely as ordinary income.
Q. I am a federal employee under CSRS and I plan to retire at age 55½. To minimize my debt, I plan to sell my current residence and relocate to a place where my income goes further. Unfortunately, my current residence is underwater by about $80,000. Would a good strategy be to withdraw the funds from TSP? A. I can’t tell you without knowing what other alternatives are available to you. If the $80,000 is a big part of your net worth, you should do what you can to avoid it and proceed very carefully.
Q. I retired from the Army Reserve in 2010. My 55th birthday was in 2010. Can I withdraw now (2014) from the Thrift Savings Plan without incurring the 10 percent penalty? I won’t be 59½ until 2016. A. Yes, since you retired during the calendar year in which you reached age 55.
Q. I am retiring the end of June with 30 years at my minimum retirement age (57). I will be collecting the special retirement supplement. Does any money I take out of my Thrift Savings Plan affect the SRS limit I can make that year? A. The offset to the SRS is for earned income, not TSP withdrawals, so there will be no effect.
Q. I retired under a Voluntary Early Retirement Authority from the Department of Agriculture in July at age 56. I chose to receive monthly payments from my Thrift Savings Plan account. I would like to pay off my mortgage and a student loan. The only thing I can come up with is to transfer my TSP funds into an IRA and withdraw from the IRA. If I roll my TSP funds into a traditional IRA and make withdrawals before 59½, will I be subject to the 10 percent early withdrawal penalty? A. Yes, I believe you will, but you should…
Q. We have applied for an age-based withdrawal from our Thrift Savings Plan account (husband works for the Postal Service) in the amount of $16,000. However, we found out that the tax was simply too high. We have already received the check, but we are now considering canceling it. Is this allowed? A. You can ask the TSP to be sure, but I don’t think it can be canceled. You have constructively received the payment. You may be able to roll the money over to an IRA to further defer the tax, however. There is a window of 60 days…