GovernmentExecutive.com

Return to Article: Withdrawal Options

• 55907
  

  Is there income tax on the TSP money if at age 59 1/2 I pay a lump some on my mortgage.

  john Posted August 6, 2008 1:45 PM
• 39225
  

  Is there a clause that would allow me to withdraw a portion of my TSP to pay for a Master's Level Degree, without paying a penalty?

  Andy Greene Posted December 7, 2007 1:48 PM
• 28969
  

  The TSP Annuity is touted to be a lifetime income. Yet I have the following questions regarding the annuity:

  How is the annuity calaculated when there is no way of knowing of how much the inflation rate will be anually to continuously erode the annuity amount chosen?

  Julius Taublib Posted July 20, 2007 3:52 PM
• 26722
  

  The TSP and the insurance are in no way connected! Don't confuse TSP annuity with pension annuity.

  KMP Posted June 26, 2007 12:17 AM
• 25001
  

  Regarding, "I suggest that as soon as possible you roll over your TSP funds into an IRA".

  Not if you want to spend from your TSP accumulation and you have retired from the Government and are between the ages of 55 and 59 1/2. You will be penalized 10% of the value of your withdrawals from an IRA, whether it originally came from your TSP or not. There is no penalty for withdrawals from your TSP between the ages of 55 and 59 1/2.

  Regarding, "(plan on spending several thousand for good first class advice and it differs by state)."

  Baloney. There is plenty of good free advise on the web and in libraries. For the cost of subscriptions, there is excellent advice in periodicals too.

  Jiff Posted June 6, 2007 12:45 PM
• 16441
  

  Beware! Although annuity payments are listed in Ms. Flanagan's column as not being applicable to the 10 percent withdrawal penalty, this is only for people older than age 55. If you are eligible to retire between age 50 and 55 and take an annuity, you are subject to the 10 percent penalty.

  GovExec.com reader Posted April 28, 2006 6:27 PM
• 16357
  

  Thanks enormously for your columns. They have been extremely enlightening.

  I am a 62 year old civilian employee covered by FERS. I understand that I can roll over a part or all of my TSP into an IRA, before or at retirement. I understand that if a minimal distribution is not made from the TSP, one can not continue health insurance.

  If I do roll over any of my TSP to an IRA, does that constitute a "minimal distribution" for purposes of maintaining FEHB health insurance? And if I do roll over any of my TSP to an IRA, does any money need to be left in the TSP to continue health insurance? If so, how much?

  Charles Posted April 25, 2006 5:03 PM
• 16149
  

  I suggest that as soon as possible you roll over your TSP funds into an IRA (you can get the same structure privately as in TSP). Then you have time to study and decide on what annuities you want or if you simply want to withdraw a monthly amount from the investment of the IRA and continue the investment as you structure it.

  To make proper choices you will need good investment advice, good income tax advice, good estate planning advice and an ability to know what you want! You cannot get all this advice from a single source and it is not cheap (plan on spending several thousand for good first class advice and it differs by state). That is why you want to roll your TSP money into an IRA and then get the advice to do what you need to do to meet your objectives!

  TSPer about to retire Posted April 13, 2006 8:50 AM
• 15729
  

  Another super article Tammy. I always find a wealth of info in all that you write about keep up the good work.

  Rick

  GovExec.com reader Posted March 29, 2006 1:46 PM
• 15693
  

  Retired DHS/TSA, The age limit to leave money in the TSP is 70.5. See: http://www.tsp.gov/features/chapter13.html#sub12 www.tsp.gov should be your #1 tool for tracking and managing your account. It is one of the best Web sites for ease of use and functionality I know of.

  bill turnbull Posted March 28, 2006 9:44 AM
• 15658
  

  Regarding the annuity payout option for TSP withdrawals, MetLife has a "sweetheart" contract. Compare annuity payments from the TSP calculator to results in the Vanguard.com calculator. TSP needs to offer a better menu of annuity choices and annuity providers. Please investigate your options very carefully, before considering an annuity withdrawal with MetLife.

  ndchamp Posted March 25, 2006 8:07 AM
• 15652
  

  Nice summary of withdrawal options, but I'd like to see a discussion of keeping the money in TSP post-retirement. The new Lifecycle funds have an expense of only 6 basis points which only Vanguard at 20 basis points can come close to. I recently retired and moved all my individual IRAs into TSP via Form 60. Was that a mistake?

  Robert Force Posted March 24, 2006 12:58 PM
• 15643
  

  In your 3/24/06 article on TSP withdrawals; the chart dealing with withdrawals based on life expectancy must be in error. I can find no reason for the sudden drop at age 70 and then starting to increase again. I think that the TSP calculator on their Web site is in error.

  Duane Craps Posted March 24, 2006 9:41 AM
• 15641
  

  Outstanding! The best discussion of this complex issue that I have seen, and the comparisons of the various options were very helpful. One question: I know Met Life is a strong and enduring company, but is there any government guarantee that you'll get all your annuity, no matter what disasters befall the insurance industry?

  GovExec.com reader Posted March 24, 2006 8:51 AM
• 15639
  

  As I did myself upon leaving government service, and advise others to do, I did an IRA rollover from my entire TSP account. The lack of a way to allow children to inherit from TSP and the lack of diversification within TSP were the reasons. In my rollover IRA, I have used ETF's for the most part and have earned double the return of the TSP without any costs other than brokerage commissions and, overall, less fees and expenses than charged by TSP. Second, from the estate planning standpoint, it freed me from the onerous restrictions of the TSP with regards to my children and other beneficiaries.

  GovExec.com reader Posted March 24, 2006 8:19 AM
• 15638
  

  There has been a longstanding belief that TSP accounts must start being withdrawn at 70.5 years old. Tammy does not mention that requirement in her superb "TSP withdrawals" column. Is it true that TSP accounts must start a drawdown at 70.5 or else be subjected to IRS penalties?

  GovExec.com reader Posted March 24, 2006 8:05 AM
• 15635
  

  I wanted to say thank you and let you know how much I have appreciated the articles in the Retirement Planning section. The topics are great and the information is so very helpful. Thanks for a great job!!!! Keep the information coming.

  GovExec.com reader Posted March 24, 2006 7:58 AM