Browsing: withdrawals

Monthly TSP payments

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Q. Can I opt to use (say 10 percent ) of my TSP account monthly as a supplement with my FERS retirement to help me meet my debt obligations into my retirement? A. You may request monthly payments from your TSP account after you retire, but you are limited to a fixed dollar amount each month (which may be changed once each year) or payments automatically computed based on your life expectancy (which vary in both dollar amount and percentage each year).

Trustworthy advice

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Q: The main — and probably only — reason I need to transfer my money from TSP to a regular IRA is that I’ll be able to make withdrawals as I wish or as needed. You always advise your readers to consult someone trustworthy to advise us before we do this. My question is, how do we determine who’s trustworthy? I’ve been approached by my bank, credit union, some investment companies, etc., but I just don’t know what questions to ask or what to look for, other than their fees. A: Unfortunately, it’s not easy. But, you can start by…

Required minimum required distribution withdrawal

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Q. I am a FERS employee, still working and plan to retire on Jan. 12, 2013 when I will be 74 years of age (my initial RMD has been delayed as I am still employed). Note that 2012 has 27 pay periods. Since I will be employed through all of 2012, when I retire, will I be required to take a RMD for 2012? Will my first RMD be for 2013 payable by the end of 2014? A. Your first required distribution will be for calendar year 2013 and the distribution will be due by April 1, 2014.

TSP calculator

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Q. When I use the TSP website’s Monthly Payment Calculator to determine how long my payments will last at an amount selected, it asks what annual interest you expect to receive.  I plan on leaving all my money in the G Fund. What rate should I expect? A. You’ve found the flaw in the calculator that makes it unreliable – pretty much useless in my opinion. Since its inception the G Fund has returned as much as around 9 percent in a year, and as little as 2.81 percent in 2010. If you’re not exercising a rigorous monitoring and management…

TSP withdrawals

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Q. What are the answers to the below questions if under age 55? For instance, taking a early retirement option at age 53 — how would the TSP 10 percent penalty apply using the original scenarios in the question?? Original question: Q. I have read many of the articles and TSP literature and I am still a bit confused. As a federal law enforcement officer over age 55, I plan to retire later this year. I have read that if I want to take withdrawals from my TSP account prior to age 59½, I can do so without having to…

TSP fund when retiring

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Q. I am exploring the idea of retiring from the postal service as a CSRS with 32 years at age 55. Can I just leave my money in the TSP? Some answers I read say you can keep it in, but I have also read that I have to withdraw it when I retire. I prefer to leave it and not touch it for at least 10 years. So what is it? A. You can, and should, leave your money in the TSP until you have to begin withdrawing it -– usually at age 70 1/2.

TSP

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Q. I am a CSRS 50-year-old employee who would like to withdraw $80,000 from my TSP to cover unsecured debt. Is this smart? My debt is strangling me. What is the tax hit and how can I avoid it? A. You don’t have the option to make a withdrawal unless you can demonstrate financial hardship under the TSP’s definition. If you take a Financial Hardship withdrawal, you will owe tax on the amount you take and you will be subject to the 10 percent early withdrawal penalty. You can, and should consider taking a loan, instead. Taking a loan will…

TSP withdrawals

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Q. I have approximately 200K in my TSP. I would like to leave the principle to my children and take a yearly withdrawal of the interest earned. What, and I know it is an estimation, would you think is a safe percentage to withdrawal yearly? A. Interest does not accrue in a TSP account. The share values change in response to changes in value. The maximum safe withdrawal rate will depend upon a number of factors including your age, health and how the money is invested and managed over time. Calculating this estimate is beyond the scope of this forum.

TSP withdrawals

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Q. I’m currently on active duty as a retired recall, servicing in Kuwait.  I will reach age 54 in December; can I withdraw my TSP funds in January without penalties? A. From the TSP’s website: “Relief from the 10% early withdrawal penalty is availableto eligible Reservists called to duty for more than 179 days. The Reservist must have been activated after September 11, 2001 and must have received his or her TSP distribution between the date of the order or call and the close of the active duty period. The Reservist may also be eligible to repay the distribution to…

TSP withdrawal

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Q. I am a federal worker, 51 years of age and am considering a withdrawal from my TSP account to pay off my substantial consolidated college student loans. If I pursue this plan what will be the tax ramifications  or any other penalties?  Another option for me is to take a loan out from my TSP account to pay the loans off and then begin to make payments back to the account. Is interest charged on these type of loans? Are penalties involved or any type of tax implications?  If I do not pay all the “loan” back before retirement,…

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