Retirement (FAQ)

Termine

⭐SuperStar
I ♥ pointSixtyFive
Messages
626
Just for completeness, there are three separate things in question here:
  1. IRA. $6k limit in 2022. This limit is for Roth and Traditional IRAs combined.
  2. TSP - employee contribution. $20.5k limit in 2022. This limit is for Roth and Traditional TSPs combined.
  3. TSP - overall contribution including employer (gov't) matching and non-elective contributions. $57k limit for 2022. The government does not provide extra contributions beyond the 5% match, so the highest amount they will ever contribute is $9.65k (the legal cap on base pay times 5%)—so this limit does not affect us.
To reiterate, the contribution limits are for your combined Traditional and Roth accounts. You can direct the money into each type of account however you like, but the total contributions have to be within the limits.
 

amg_smurf

Member
Messages
43
In the FAQ for retirement it is stated the 1.7% & 1% are calculated from base pay. Does that mean without locality? Or does that mean without all the premiums such as Sunday pay, OT etc...
 

luckyduck

Member
Messages
10
For TSP withdrawal at retirement, how does it work if you've given money to both Traditional and Roth? Lets say my pension is 50k and I withdraw 50k from traditional for a taxable income of 100k that year. Could I withdraw another 50k from my Roth portion that to receive anything above 100k tax free?
 

Gavin74

Member
Messages
11
For TSP withdrawal at retirement, how does it work if you've given money to both Traditional and Roth? Lets say my pension is 50k and I withdraw 50k from traditional for a taxable income of 100k that year. Could I withdraw another 50k from my Roth portion that to receive anything above 100k tax free?
You are not allowed to determine the portion of that $50K withdrawal that comes out of your traditional vs. Roth. You just decide how much to withdraw, and the TSP will allocate the withdrawal evenly between Trad/Roth based on the total current balance in each category.

EXAMPLE:

Total TSP balance $500K
Roth balance: $300K (60% of total balance)
Traditional balance: $200k (40% of total balance)

A hypothetical withdraw of $50K will be allocated as follows:

$30K from Roth (60% of $50K)
$20K from Traditional (40% of $50K)
 

nickmag123

Member
Messages
63
You are not allowed to determine the portion of that $50K withdrawal that comes out of your traditional vs. Roth. You just decide how much to withdraw, and the TSP will allocate the withdrawal evenly between Trad/Roth based on the total current balance in each category.

This is incorrect. The TEP modernization act changed this. You can now decide which to withdraw from.

You can also roll over your ROTH or traditional into an IRA, giving you flexibility as well.
 

tegsr94

Member
Messages
13
Are controllers subject to 10% withdrawal penalties on Roth TSP contributions prior to age 59.5? I know we can withdrawal from traditional but unsure on the Roth aspect.
 
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