Browsing: TSP withdrawal

Q: I will be retiring, hopefully, at age 56. I have been investing in the Thrift Savings Plan since 1987, contributing the maximum amount allowed (15 percent). At age 56, can I set up an annuity with TSP requesting a small amount each month and still receive interest on the amount left in my account? A: Yes, as long as you haven’t already taken a partial withdrawal. Use a partial withdrawal to purchase the annuity and leave the rest in your account until you need it.

Q: Have you published an article on the pros and cons of the Thrift Savings Plan’s various post-retirement withdrawal alternatives? A: My general recommendation is to leave your money in the TSP as long as possible.

Q: I am a firefighter about to be forced to retire at 57 years old because of the mandatory retirement age. I plan on taking out my Thrift Savings Plan earnings to buy my house when I retire. Do I still have to pay the 10 percent penalty for withdrawing from my TSP before turning 59 1/2 even though I was forced to retire because of my age? A: Because you are retiring during or after the year in which you reach age 55, your subsequent TSP withdrawals will not be subject to the early withdrawal penalty.

Q: At the end of 2010, I’ll be retiring at the age of 50, with 23 years in federal law enforcement. I will need to take a withdrawal from my Thrift Savings Plan upon retirement. According to my agency, in order to prevent being assessed a 10 percent penalty for early withdrawal, I need to set up my TSP payments under the 72t rules (i.e. substantial equal periodic payments until after the age of 59½). However, according to IRS Publication 575, Pensions and Annuities, as I understand it, law enforcement officers are exempt from the 10 percent penalty for early…

Q: I am a 44-year-old Federal Employees Retirement System employee. I have a financial planner who wants to explore withdrawing part of my Thrift Savings Plan and rolling it into a Roth individual retirement account to take advantage of the two-year payout of taxes. I told the financial planner we only have two options for TSP withdrawals: One is for hardship, and the other applies if you are more than 59 1/2 years old. Because I do not meet either requirement, it appears to me that I cannot make an in-service withdrawal. Are there other options for in-service withdrawals? The…

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