Ask The Experts: Money Matters

By Mike Miles

TSP transfer

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Q. I retired over a year ago and just started working again. Can I transfer my TSP account to my new company’s retirement savings plan without a penalty? I’m 54 and plan to work until age 65.

A. Yes, but it might be a bad idea. You’ll probably be better off keeping your TSP account and transferring your private-sector plan balance into it after you retire.

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Withdrawal plan

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Q. I am a 57-year-old FERS employee with over 38 years of federal service (including seven years of military service which I bought back). I have approximately $470,000 in my TSP account and plan to retire in January 2015. Can I take an immediate one-time-only partial withdrawal when I retire and elect to receive a specific dollar amount of monthly distributions immediately thereafter and, in a few years, halt the monthly distributions and roll over my remaining TSP balance to an outside IRA?

A. Yes

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Lump sum and monthly benefit

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Q. I want a lump sum for a certain amount and monthly withdrawals (not full withdrawal) for 25 years. Can I do both in the same year?

A. The TSP considers monthly payments to be a form of full withdrawal.

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TSP to IRA

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Q. Can I take my money out of the TSP and pay the penalty? Is there any way to get all my money out without having to retire or quit? If so, can I then move it into another self-directed IRA?

A. The only ways to remove money from your TSP account before reaching age 59-1/2 while you are still a federal employee are: a loan and/or an in-service financial-hardship withdrawal. Neither of these may be rolled into an IRA account.

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TSP early withdrawal

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Q. I am interested in buying a franchise. I am 61 and plan to retire in 2014. Can I withdraw my money without it being taxed for this type of investment?

A. No.

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Beneficiary in TSP

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Q. I have reviewed information at the TSP website. I have been unable to locate information regarding survivor benefits in the case of a nonannuity, monthly distribution without 10-year certain enabled. What are the rules in this most simple TSP account distribution plan?

A. If you die while receiving automatic monthly payments from your TSP account, the payments will end and the remaining balance in the account will be distributed to your beneficiaries.

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Lump sum, monthly benefit combo

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Q. I reached my MRA last January with 30 years of service. I plan to retire in January. For 2015, I am planning to withdraw $100,000 and then have monthly benefits of $1,000 from my TSP. Can I do that in the same year? Or do I have to wait in 2016 to start my monthly benefit?

A. A partial lump-sum withdrawal and a full withdrawal in monthly payments can both occur in the same year.

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Timing of mixed withdrawal

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Q. Upon retirement, I want to take a mixed withdrawal. I would like to take partial withdrawal ($50,000), sign up for monthly withdrawals, and possibly buy a TSP annuity. Is it possible to hold off buying the annuity when the interest rate is better? I was under the impression that one had to make and take all of these options up front. Otherwise, you lock yourself out of making/buying any other options TSP withdrawal has to offer.

A. Once you begin a full withdrawal, you lose the option to buy a TSP annuity at a later date.

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TSP access

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Q. I will be 57 in June 2022, meeting the criteria of MRA +30 years creditable service. If I postpone retirement to age 62 for 1.1 percent multiplier, will I be able to access my TSP funds in the meantime; i.e. at age 57 until retirement at age 62?

A. Once you’ve retired; yes.

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CSRS TSP

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Q. I have 36 years of federal service. Can I take out my TSP?

A. Yes, if you are at least age 59 1/2 or have separated from federal service.

 

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