Rollover of Florida FRS Investment Plan Distribution to TIAA-CREF Roth IRA

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
charpressler
Posts: 1
Joined: Tue Apr 18, 2017 2:45 pm

Rollover of Florida FRS Investment Plan Distribution to TIAA-CREF Roth IRA

Post by charpressler »

I have a somewhat complicated problem here; please bear with me while I explain it.

I am an employee of a Florida college, participating in the FRS Investment Plan (self-directed brokerage). I also have a small Roth IRA through TIAA-CREF. At my age, distributions from the Roth IRA are no longer taxable.

I plan to retire in September, 2020, when I will be 70. (I will need the additional Social Security monthly payment this later retirement age will provide. Frankly, as investors go, I'm pretty small potatoes.)

At present, I plan to live abroad after my retirement, and am considering taking a good-sized distribution from my FRS investment account to purchase property abroad. I would not do this until at least a year after I retire, at a minimum age of 71. I own a home in Florida but (thank you, 2008!) will probably do no more than cash out of it, so I'd need the investment fund distribution to buy again - wherever I landed.

I understand I will be paying tax on the FRS investment account distribution. Of course, I'd like to keep the tax on the distribution to a minimum. Living abroad, I could be subject to backup withholding of perhaps as much as 30%, and at least 20%. I am wondering if I can avoid that by rolling over the FRS distribution into the Roth IRA, then withdrawing it from the Roth IRA, with no tax penalty, when I'm ready to buy. I know there'd be a 6% excise tax for excess contributions to the Roth IRA, but 6% is better than 20%/ 30%. Or would my distribution be subject to withholding of less than 20% / 30%? My annual income after retirement is likely to be just over the taxable line for Social Security recipients.

Just trying to plan ahead .... your thoughts welcome. If I have misconceptions, please feel free to straighten them out!
Post Reply