Ask The Experts: Money Matters

By Mike Miles

TSP beneficiary

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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 »

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TSP withdrawal options

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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 »

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TSP rollover

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

A. No.

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Withdrawals and tranfers

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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.

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Age-based withdrawal

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Q. Is a TSP age-based withdrawal, taken while an employee is still working, credited toward the required minimum distribution when the employee later retires?

A. Only if it is taken during the year subject to the RMD.

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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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