Ask The Experts: Money Matters

By Mike Miles

TSP lump sum

Bookmark and Share

Q. I am a FERS employee and plan to retire at age 56. Can I take a lump-sum withdrawal from my TSP to pay off my home?

A. Yes, once you retire.

Tags: ,

TSP after separation

Bookmark and Share

Q. If I separate from government service after 10 years at age 35, can I withdraw a chunk of my TSP and ask for annuity payments of 10 years or more to avoid the withdrawal penalties?

A. In order to withdraw without penalty, you must meet one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.

Tags:

Monthly withdraw

Bookmark and Share

Q. I would like to take $3,000 monthly from my TSP when I retire for the first few years, then I start collecting Social Security can I reduce my monthly payment? Then later on change the monthly amount again? I thought I read I can change my TSP payment once a year, but have been hearing from others who have retired you only have a choice of lump sum, annuity, partial lump sum and the rest in monthly payments of your choice, but it stays the same for life. Read the rest of this entry »

Tags: ,

Early withdrawal

Bookmark and Share

Q. I have been working under federal Law enforcement for seven years. I started when I was 21. So at age 46, I will have 25 years of law enforcement. If I retire at 46, can I have access to my TSP, and what are my choices for withdrawals or the penalties to take out?

A. You’ll have access to the usual partial (Form TSP-77) and full (Form TSP-70) withdrawal options as soon as you retire. Unless you meet one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf, your TSP withdrawals will be subject to the early withdrawal penalty until you reach age 59-1/2.

Tags: ,

TSP withdrawals for firefighters

Bookmark and Share

Q. I read an article that says law enforcement and firefighters have to pay a 10 percent penalty if withdrawing prior to age 59-1/2. In 2019, I will have 25 years of federal firefighter service, so I was caught off guard. Can you site a regulation that says federal firefighters do not have to pay the 10 percent penalty and can begin withdrawing immediately upon retiring with years and/or age requirements met?

A. Under current law, your service time and status is irrelevant. Unless you retire during or after the year in which you reach age 55, or qualify for one of the other exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf, you will be subject to the early withdrawal penalty until you reach age 59-1/2.

Tags:

TSP withdrawal

Bookmark and Share

Q. If I retire in December under MRA +10 and I’m 59 years old, how long do I have to wait to request a full withdrawal with monthly payments? Also, can I request the same day to take a partial lump-sum withdrawal, or do I have to do them separate? Read the rest of this entry »

Tags: ,

TSP beneficiary

Bookmark and Share

Q. I saw your response to  a TSP question about what happens to an account that is giving monthly payments (not annuity) when you die; payments stop and remaining funds go to the beneficiary. If your beneficiary (wife) also has a TSP account, are there any ways to transfer that to her TSP vs. lump payout if you die? Read the rest of this entry »

Tags:

TSP withdrawal options

Bookmark and Share

Q. I am under FERS and contribute the maximum amount into TSP. When I am eligible to retire (57-1/2), do I have to immediately start collecting out of my TSP once retired, or can I roll it over into another bank or institution into a 401K without penalty? And how does one receive payments if I can’t roll it over? Read the rest of this entry »

Tags: , ,

TSP rollover

Bookmark and Share

Q. At age 57, can I pull all my TSP out and roll it over into a primary house without paying tax?

A. No.

Tags: ,

Withdrawals and tranfers

Bookmark and Share

Q. I plan on retiring with 31 years of service at age 57. I have both the Regular TSP and the Roth TSP. I plan to withdraw my Thrift Savings Plan in a single payment. Can I transfer 100 percent of the Regular TSP to a Traditional IRA, but take the Roth TSP funds as a direct withdrawal without penalty?

A. I believe so, as long as you have held the Roth account for at least five years. You should consult a tax adviser for specific advice before you proceed.

Tags: ,