Q. I recently retired but will not be withdrawing any of my Thrift Savings Plan for a few years. I’ve considered rolling over my balance to USAA because of the possibility of a government default. Is that advisable? In the case of a government default, will my TSP balance be safe? A. I wouldn’t do it if I were in your shoes. I’m not sure how the debt ceiling uniquely threatens your TSP account.
Browsing: withdrawal
Q. I was first employed by the Defense Department in October 1982 and placed in CSRS. During a reduction in force, I lost my position in July 1994. In 1996, I withdrew my CSRS contributions and had them rolled into an annuity with American Express (now Ameriprise). In November 1998, I was rehired by DoD and became a FERS employee. When I was rehired by DoD, I took the funds I had earned at my previous (1994-1998) job’s 401(k) and rolled them into the same annuity with Ameriprise. I am now nearing retirement age and plan to buy back the CSRS…
Q. I plan on withdrawing a six-figure sum from my Thrift Savings Plan after Nov. 30, when I am 59½. If I withdraw the money in 2013, will it count toward my earnings as far as taxes are concerned? If so, should I wait until 2014? I plan on retiring in May 2014. A. To the extent that they come from your traditional TSP balance, your withdrawals are added to your tax return for the year in which the payment is constructively received. You should consult a competent tax adviser for guidance on when it will be best to take your…
Q. I work for the Postal Service. I have 30 years of service. I will have to take a discontinued retirement today. I will turn 55 in December. My minimum retirement age is 56. I understand from a previous question that I qualify to receive my Thrift Savings Plan without penalty because I am retiring in the year that I will turn 55. Will I be able to start withdrawing this money from TSP without penalty when I retire? Or in December, when I turn 55? Or at my MRA of 56? A. Your MRA has nothing to do with…
Q. Are monthly Thrift Savings Plan withdrawals counted against the earnings limit for the special retirement supplement? A. No.
Q. I am a federal law enforcement officer. I recently read an article that discussed the downside of the Roth TSP for federal law enforcement officers and firefighters. Is this true? ************* Many of you are probably unaware of the serious pitfalls you will encounter if you opt to contribute to the Roth TSP. For a federal law enforcement officer or firefighter, the Roth TSP is a poor choice. It wasn’t until this week that a reader posed a question to me that caused me to realize what a bad idea the Roth TSP is for many of us. The idea behind…
The Thrift Savings Plan’s website, www.tsp.gov, has posted a new income calculator. Well, it’s not entirely new, it’s mostly just remodeled. Now, instead of going directly to the old monthly payment calculator or the annuity payment calculator, you must go through a wizard that automatically runs both and compares the results. As much as I like the TSP and have endorsed its use, I have to say that I find this effort to be misguided and disappointing. I can’t imagine how the cost-benefit analysis was run to produce a green light for expending participant’s resources on what is an entirely…
Q. After entering retirement from CSRS, are Thrift Savings Plan funds withdrawn classified as income in addition to the 20 percent accessed at the time of withdrawal from the TSP account. Are there ways to avoid double taxation if they are taxed twice other than rolling over into an IRA or Roth IRA? A. The traditional TSP funds you withdraw are classified as ordinary income on your tax return. They are not subject to double taxation. The 20 percent withheld from your payment(s) is a deposit against your tax liability. If the distribution is not a required minimum distribution and you…
Q. I will have 30 years of service and be 54 years old when I take early retirement in January. Since I will turn 55 in August 2014, will I be able to withdraw without penalty from my TSP even though my minimum retirement age is 56? A. As long as you separate from covered service during or after the calendar year in which you reach age 55, you will avoid the early withdrawal penalty on withdrawals taken after you separate. Your MRA has nothing to do with it.
Q. Can I withdraw money from my IRA in December and have it applied to my 2014 required minimum distribution? A. No.