Q. My wife is a federal employee with 28 years of service and is covered by FERS. She plans on retiring soon, and we have heard that she can take funds (post-tax) and dump them into the Thrift Savings Plan equaling the cumulative difference through the years of what she was unable to put into the TSP. Can you shed any light on this info? A. You may not ever deposit post-tax money into a TSP account, and, except for Federal Erroneous Retirement Coverage Corrections Act cases, there is no provision to make up past contributions that could have been…
Browsing: TSP deposit
Q. Can I select the date my TSP monthly withdrawal is deposited to my bank account, or is it the same date for everyone? A. You can’t specify the date.
Q. I am a CSRS employee who plans on retiring in 2013. I want to open a Voluntary Contribution Program account and deposit after-tax money in that account, and then, at retirement, transfer the deposit into Roth TSP, and any earnings into traditional TSP. Is that allowed? A. No. You’ll have to use a Roth IRA for the after-tax portion of the VCP account.
Q. I am considering doing a partial withdrawal from my Thrift Savings Plan account and was wondering what the taxes might be. I am 63 years old, still working, with a FERS status. I wanted to move most of my TSP savings into a mutual fund/IRA and continue to make deposits in TSP. A. If you roll the withdrawal over into an IRA, there will be no tax consequences under current law.
Q. I just discovered that my contributions to the Thrift Savings Plan don’t show up there until seven to 10 days after I’m paid, but that money doesn’t sit in my bank account all that time. Do you have any idea where that money goes for that time? Is the TSP earning interest on it? If so, does that interest get deposited in our accounts, or does the TSP get to keep it and put it toward administrative costs? At the speed money can move these days, I find it hard to believe it takes seven to 10 days to get…
Q. With regard to a Thrift Savings Plan loan, it’s my understanding that the funds borrowed are from my account (money I previously paid into my TSP account). Since I’m CSRS and the government doesn’t match any of my deposits, does the interest that I’d pay actually get paid back into my account? If not, why would I ever want to borrow my money, and then pay the interest back to some other entity? However, if the interest was paid back to my account, then I’d see no reason to not take out a loan. Furthermore, I’d see no reason to…
Q: I was putting $10 per pay period into my TSP account. I increased it to $400 per pay period and my state and federal tax amount withheld went substantially lower. Is this correct and should I adjust my exemptions? A: It is probably correct since deferring your pay into the TSP reduces your taxable income for the year of the contribution. You should consult your tax preparer about the appropriate withholding rate, but if your taxable income is lower, it makes sense that your withholding should be lower.