Thrift Savings Plan Withdrawal Process

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Topic Author
MichDad
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Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Oct 17, 2019 11:22 am

I recently completed the transfer of my entire Roth TSP balance (>$200,000) to a brokerage firm that will pay me $1,000 to hold that money. Now that these Roth TSP funds are no longer in my TSP – but are instead in a Roth IRA – they will not be subject to Required Minimum Distributions (at age 70.5 or later). I’ve prepared this post for the benefit of other TSP participants who wish to make withdrawals from their accounts.

As a first step, and in order to make my withdrawals as simple as possible, I converted my entire TSP balance to the G Fund one business day before I began the withdrawal process.

My second step was to access my TSP account at www.tsp.gov. On the left side of the page, I selected “Withdrawals and Changes to Installment Payments.” I then selected my TSP participant category: “Separated Participants.” I made a “Withdrawal Request” (not a Change to Installment Payment). Once I selected “Withdrawal Request,” I was taken to the wizard that guided me through the questions and options. Because I concluded by making a withdrawal, I cannot access the wizard for thirty days so I cannot provide specific guidance on how to respond to each of the various questions. One thing I recall is that in order to ensure that I would withdraw 100 percent of my Roth TSP, I had to input a dollar figure in excess of my then balance. I suppose this is because the account could continue to grow from the time I completed the application to the time the money would actually be withdrawn.

One thing that was confusing about the wizard concerned my payment method. I chose to have the payment made by check mailed to my address of record. The only alternative was to provide a bank routing number and account number. My brokerage firm advised me not to use any of its routing or account numbers. I assumed the mailing option meant what it said – that my Roth TSP account balance would be sent to me via a check mailed to my residence and that I would then have to forward that check to the brokerage firm causing a further delay. To my pleasant surprise, this is not what happened. The brokerage firm inputted its address in the section designated for its use. The TSP mailed the check directly to the brokerage firm.

Because of TSP rules for FERS employees, both my wife and I had to visit a notary to have our signatures on the form witnessed and notarized. There is no option available for my wife to provide a one-time, longstanding notarized authorization for me to make withdrawals from my account. She needs to have her signature notarized every time I made a withdrawal (with the exception of installment payment withdrawals).
Once the withdrawal form was completed, I was provided the option of either mailing it to the TSP in Birmingham, Alabama or faxing it to them. I chose to fax it to them to save time.

Here’s how the timing worked:

1. I faxed the completed and notarized form to the TSP on September 30, 2019.
2. The TSP mailed a check to my brokerage firm on October 7, 2019.
3. My brokerage firm deposited the TSP check into my Roth IRA on October 16, 2019.
4. I cannot submit a new TSP withdrawal request until November 7, 2019.

I plan on making two more withdrawal requests. The next will be a large lump sum transfer into a rollover IRA to a different brokerage firm that will pay me significant money to receive the money. The last will be to establish a monthly withdrawal installment into my interest bearing checking account to help fund our ongoing retirement expenses. Because of the TSP rule that participants cannot make more than one withdrawal request every thirty days, it will take us until mid to late December before I can complete my three withdrawal requests.

Beginning late 2019 and until depleted, my TSP money will be invested solely in the G Fund. I'll have enough there and from my FERS pension and some rental income to fund all our living expenses until well beyond the time I turn age 70 and begin to collect my maximum Social Security benefits. We'll continue to make significant Roth conversions until at least age 70 and will keep our non-TSP financial assets invested solely in US and international equities at low cost, widely diversified ETFs.

I hope other TSP participants find this information useful.

MichDad

HeelaMonster
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Re: Thrift Savings Plan Withdrawal Process

Post by HeelaMonster » Thu Oct 17, 2019 1:15 pm

Yes indeed... very helpful! Thanks for taking the time to document this process. :sharebeer

Two questions:

1. Would you mind sharing which brokerage is willing to pay you this "signing bonus" for receiving funds?

2. I am looking at several years of incremental transfers from TSP Traditional to Roth IRA (I have no Roth funds inside TSP). On the order of $100k to $160k per year. I am aware of recent changes with TSP withdrawal options, notarization issues, etc. The one thing I am still not certain about is whether I can/should transfer (A) directly from TSP Traditional to brokerage Roth IRA in one step, or (B) transfer from TSP Traditional to Traditional IRA, and from there to Roth IRA (two steps)? At one point I was seeing guidance that the two-step process was recommended or required (see below for example). But I don't know if that has changed with recent changes to TSP, or perhaps that was never really necessary to begin with. These will be my first withdrawals/transfers out of TSP, after years of paying in, and I don't want to mess it up.

https://themilitarywallet.com/thrift-sa ... lover-ira/
TRANSFER TRADITIONAL FUNDS TO A TRADITIONAL IRA, ROTH TO A ROTH IRA
"It sounds basic, but you want to get this right the first time. When you are transferring your TSP funds, make sure you transfer them to the correct type of account. This will prevent problems with the IRS. Both the TSP-70 and TSP-77 have sections for both Traditional and Roth contributions and transfers.

If you want to convert a Traditional account to a Roth account, it’s best to do this in two separate transactions. Complete your TSP to IRA Rollover, then perform a Traditional IRA to Roth IRA rollover."

krafty81
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Re: Thrift Savings Plan Withdrawal Process

Post by krafty81 » Thu Oct 17, 2019 2:11 pm

Just wondering why you would not keep the G fund?

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Wiggums
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Re: Thrift Savings Plan Withdrawal Process

Post by Wiggums » Thu Oct 17, 2019 2:26 pm

Did you remove all the money from the TSP?

Are you still eligible to contribute to the TSP?

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Oct 17, 2019 2:36 pm

HeelaMonster wrote:
Thu Oct 17, 2019 1:15 pm

Two questions:

1. Would you mind sharing which brokerage is willing to pay you this "signing bonus" for receiving funds?

With the exception of Vanguard and Fidelity, I think just about any of the other major brokerage firms will pay substantial signing bonuses, even for existing account holders. First, I determine which brokerage firm I'd like to move my money to. Then, I shop on-line to find out which brokerage firms are offering the most money for my given level of investment. Then, I call my preferred brokerage firm and explain that I'd like to move $XXX,XXX over to them but want to see if they'll match the $X,XXX bonus offer currently being offered by a named competitor. I'll send them a link to the bonus offer I'd like them to match. It's been my experience that (again, with the exception of Vanguard and Fidelity) they always say "yes." Once they agree, I ask them to send me an email summarizing their commitment -- which they always do.

I recommend that you use this excellent Bogleheads thread as your baseline for finding lucrative signing bonus offers:

viewtopic.php?f=10&t=196884

In 2018, my wife and I earned $2,700 very easily in bonus money by moving some of our 401(k) and Roth IRA assets around. Of that sum, $1,800 was put into our respective Roth IRA accounts so those bonuses were themselves tax free. This year, I'm earning bonuses with money I'm transferring from my TSP account. The $1,000 bonus on a >$200,000 investment will be paid by Merrill Edge. I've already received a written promise from Schwab to pay me a $1,200 bonus for a >$500,000 investment I'll make with them in November. I'll probably get a third bonus from one of these two firms or another for a >$250,000 investment I'll make towards the end of the year. I haven't yet done my homework on that.

I really like dealing with both Merrill Edge (Bank of America) and Schwab. I'm a Platinum Honors ME customer and love their Premium Rewards Visa card. We also get free safe deposit boxes at BoA. We love using Schwab Bank's Visa debit card for fee-free ATM withdrawals worldwide. Both ME (BoA) and Schwab have offices located very close to our house.

2. I am looking at several years of incremental transfers from TSP Traditional to Roth IRA (I have no Roth funds inside TSP). On the order of $100k to $160k per year. I am aware of recent changes with TSP withdrawal options, notarization issues, etc. The one thing I am still not certain about is whether I can/should transfer (A) directly from TSP Traditional to brokerage Roth IRA in one step, or (B) transfer from TSP Traditional to Traditional IRA, and from there to Roth IRA (two steps)? At one point I was seeing guidance that the two-step process was recommended or required (see below for example). But I don't know if that has changed with recent changes to TSP, or perhaps that was never really necessary to begin with. These will be my first withdrawals/transfers out of TSP, after years of paying in, and I don't want to mess it up.

https://themilitarywallet.com/thrift-sa ... lover-ira/
TRANSFER TRADITIONAL FUNDS TO A TRADITIONAL IRA, ROTH TO A ROTH IRA
"It sounds basic, but you want to get this right the first time. When you are transferring your TSP funds, make sure you transfer them to the correct type of account. This will prevent problems with the IRS. Both the TSP-70 and TSP-77 have sections for both Traditional and Roth contributions and transfers.

If you want to convert a Traditional account to a Roth account, it’s best to do this in two separate transactions. Complete your TSP to IRA Rollover, then perform a Traditional IRA to Roth IRA rollover."


I'm less certain of the answer to your second question. I'm currently 64 years old. My plan with my regular (non-Roth) TSP account is to transfer a portion to a rollover IRA (a traditional IRA) and then to convert portions of it each year to a Roth IRA (of course, paying the taxes due upon conversion). I like the two-step process because it leaves a clearer paper trail. I want to remain in the 24 percent federal income tax bracket and I'm hoping to convert about $200,000 per year from a rollover IRA to a Roth IRA until I turn age 70. I may continue to make Roth conversions after I turn 70 but those conversion amounts will likely be much smaller, since we'll also have substantial Social Security income.
I hope this helps.

MichDad

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Oct 17, 2019 2:52 pm

krafty81 wrote:
Thu Oct 17, 2019 2:11 pm
Just wondering why you would not keep the G fund?
When I'm done making all the moves I started on September 30th, I'll still have over $1 million in the G Fund. I'll use that money, in addition to my FERS pension and some rental income, to fund our living expenses beyond age 70, when I'll begin to collect maximum Social Security benefits.

MichDad

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Oct 17, 2019 2:54 pm

Wiggums wrote:
Thu Oct 17, 2019 2:26 pm
Did you remove all the money from the TSP?

No.

Are you still eligible to contribute to the TSP?

No, I retired on March 31, 2018.
MichDad

HeelaMonster
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Re: Thrift Savings Plan Withdrawal Process

Post by HeelaMonster » Thu Oct 17, 2019 4:07 pm

MichDad wrote:
Thu Oct 17, 2019 2:36 pm
I hope this helps.

MichDad
Helped a lot! Thanks again for sharing your experience.

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Wed Nov 20, 2019 12:23 pm

On November 7, 2019, I got on the TSP withdrawal wizard and began the process for moving over $650,000 from the TSP to a new rollover IRA account I established with Charles Schwab. As with my previous TSP withdrawal (described in my initial post on this thread), I had to bring my wife with me to a notary to sign the TSP withdrawal document. Schwab faxed the completed form to the TSP that same morning. The TSP sent the money directly to Schwab (not to me). The money was deposited into my Schwab account on November 18, 2019, meaning that it took eleven calendar days for this transaction to be completed. The TSP does not allow participants to have the TSP wire or overnight the money to the recipient -- even for an extra fee.

Schwab will pay me a $1,200 cash bonus for moving >$500,000 to Schwab.

I now have a large G Fund balance (>$1 million) remaining with the TSP from which I'll begin to take monthly withdrawals in January 2020. That will require a third visit with my wife to a notary. I expect that G Fund account, in addition to my FERS pension and rental income, to fund our retirement until well beyond when I'll turn age 70 and will begin to collect maximum Social Security benefits.

MichDad

megabad
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Re: Thrift Savings Plan Withdrawal Process

Post by megabad » Wed Nov 20, 2019 5:50 pm

MichDad wrote:
Wed Nov 20, 2019 12:23 pm
On November 7, 2019, I got on the TSP withdrawal wizard and began the process for moving over $650,000 from the TSP to a new rollover IRA account I established with Charles Schwab.
Just out of curiosity, when you do this, how long are you "out of the market" (even though you use G Fund in this case). I noticed you have listed a "TSP mailed check" date above but is that the actual date of valuation of the amount transferred? Is it earlier than that date?

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Wed Nov 20, 2019 6:04 pm

megabad wrote:
Wed Nov 20, 2019 5:50 pm
MichDad wrote:
Wed Nov 20, 2019 12:23 pm
On November 7, 2019, I got on the TSP withdrawal wizard and began the process for moving over $650,000 from the TSP to a new rollover IRA account I established with Charles Schwab.
Just out of curiosity, when you do this, how long are you "out of the market" (even though you use G Fund in this case). I noticed you have listed a "TSP mailed check" date above but is that the actual date of valuation of the amount transferred? Is it earlier than that date?
I suppose I was out of the market for about ten calendar days.

MichDad

rkhusky
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Re: Thrift Savings Plan Withdrawal Process

Post by rkhusky » Thu Nov 21, 2019 9:25 am

MichDad wrote:
Wed Nov 20, 2019 6:04 pm
I suppose I was out of the market for about ten calendar days.
Since the transfer amount was essentially in cash, did you move any cash/bonds to stocks during the transfer to maintain your AA?

federal dinosaur
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Re: Thrift Savings Plan Withdrawal Process

Post by federal dinosaur » Thu Nov 21, 2019 9:51 am

MichDad,
Thank you for your update. The majority of my TSP balance is non-Roth. It's a damn shame that the folks managing the TSP cannot find/create an avenue for TSP account holders (retired or active fed employees) to "convert" TSP accounts from regular TSP over to Roth TSP .... whilst remaining in the TSP program. Too big a challenge for them? I dunno.

I suspect that there just might be many TSP account holders who would take advantage of this option. If it were only offered (sigh).

fd

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Nov 21, 2019 10:06 am

rkhusky wrote:
Thu Nov 21, 2019 9:25 am
MichDad wrote:
Wed Nov 20, 2019 6:04 pm
I suppose I was out of the market for about ten calendar days.
Since the transfer amount was essentially in cash, did you move any cash/bonds to stocks during the transfer to maintain your AA?
For the ten days of the transfer process, I made no changes to our AA. So, we've been G Fund (bond) heavy for the past two months or so. However, when I moved the money over to Schwab, I invested most of it into VXUS. My overall plan is for my G Fund (>$1 million) serve as our only bond fund. All of our other assets, except for some checking accounts, are in very widely diversified and low expense US and international equity funds. Beginning in January 2020, we'll start using my G Fund to help pay our ongoing living expenses. I've got enough there to last us well beyond the time I'll turn 70 (in six plus years) and will start to collect maximum Social Security benefits. My feeling is that even if US and international equity markets tank over the next six years, we'll still have -- at a minimum -- my FERS pension and our combined Social Security benefits. That's our worst case scenario. Our house is paid off and we have long term care insurance.

MichDad

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TimeRunner
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Re: Thrift Savings Plan Withdrawal Process

Post by TimeRunner » Thu Nov 21, 2019 10:29 am

MichDad's journey is very similar to our family. Subsequent to the new TSP withdrawal rules, we put all the TSP in the G Fund and moved mid-six figures out of the TSP to a traditional IRA account. Our remaining almost two-comma TSP will remain 100% G Fund as the almost-sole bond allocation, with some muni bond fund money in taxable MM fund for planned larger expenses. In our experience, TSP paperwork was mailed to TSP on Nov 4, withdrawal was processed by TSP on 11/17 overnight cycle, and is still in the mail today.

The new TSP withdrawal process is still cumbersome. The G Fund advantage just slightly tilts towards keeping the TSP. If not for that fund, we'd be out of the TSP completely.
One cannot enlighten the unconscious.

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Fri Nov 22, 2019 6:41 pm

I sent a message to the TSP asking why participants cannot choose to pay a fee to have funds they withdraw from their accounts wired directly to their brokerage or bank accounts. In my case, for example, I recently withdrew >$650,000 from my TSP account for deposit into a rollover IRA at Schwab. The paper check process took eleven calendar days. Savings account type interest I could have earned over eleven days could have exceeded $300. For example, Schwab Value Advantage Money Fund’s (SWVXX) current interest rate is 1.57 APY. Wire transfer fees are usually $25 or less. Indeed, I suspect Schwab would have been happy to reimburse me my wire fee upon receipt of that large a sum. Here's the TSP's response to my question:

"TSP transfer payments are disbursed from the TSP's recordkeeping system and forwarded to the United States Department of the Treasury (Treasury) for payment through its system. Please be aware that, while the Treasury does issue other types of TSP disbursements by electronic funds transfer (i.e., single and installment payments issued directly to participants, as well as loan payments), the Treasury will not issue TSP transfer payments to IRAs at designated financial institutions or eligible employer plans by electronic funds transfer or wire transfer. The Treasury will only send electronic funds transfers to savings and checking accounts. Consequently, all IRA and eligible employer plan transfer payments must be paid using a Treasury check."

I know from my long federal career that the Department of the Treasury has the ability to send and receive wire transfers. So, I'm not sure the message I received from the TSP is truly responsive. I assume that during the several days after the funds have been withdrawn from TSP participant accounts and before those funds are deposited into brokerage or bank accounts that either the TSP or the US Treasury is reaping the benefits of the float. Imagine multiplying this by all TSP participant lump sum withdrawals. It has to be a very significant sum.

MichDad

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TimeRunner
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Re: Thrift Savings Plan Withdrawal Process

Post by TimeRunner » Wed Nov 27, 2019 11:33 pm

Funds showed up in Fido on 11/25. TSP process is slow.

On another note, Marco Rubio continues to attack TSP for I-Fund investment, however slight, in emerging markets, particularly China. IMO, this doesn't bode well for FRTIB/TSP. As a separated annuitant (aka retired fed), who needs politicians monkeying around their investments with money that is NOT government money. Grrr. When the G Fund comes under attack, I'm definitely OUT.

https://www.govexec.com/pay-benefits/20 ... es/161587/
One cannot enlighten the unconscious.

Swansea
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Re: Thrift Savings Plan Withdrawal Process

Post by Swansea » Thu Nov 28, 2019 6:06 am

When I left the Feds, I moved my TSP monies to Vanguard...primarily for the increased withdrawal flexibility.

Swansea
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Re: Thrift Savings Plan Withdrawal Process

Post by Swansea » Thu Nov 28, 2019 6:14 am

TimeRunner wrote:
Wed Nov 27, 2019 11:33 pm
Funds showed up in Fido on 11/25. TSP process is slow.

On another note, Marco Rubio continues to attack TSP for I-Fund investment, however slight, in emerging markets, particularly China. IMO, this doesn't bode well for FRTIB/TSP. As a separated annuitant (aka retired fed), who needs politicians monkeying around their investments with money that is NOT government money. Grrr. When the G Fund comes under attack, I'm definitely OUT.

https://www.govexec.com/pay-benefits/20 ... es/161587/
The G fund is under scrutiny.

https://www.govexec.com/pay-benefits/20 ... ts/146060/

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TimeRunner
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Re: Thrift Savings Plan Withdrawal Process

Post by TimeRunner » Thu Nov 28, 2019 8:53 am

Swansea wrote:
Thu Nov 28, 2019 6:14 am
The G fund is under scrutiny.

https://www.govexec.com/pay-benefits/20 ... ts/146060/
Yes, I knew that, but I'm hoping it's less likely they will change the G fund - changes which would basically render it useless. I don't want to stray into the politics of the situation. Best plan for me is keep my bond allocation (almost) all in the G Fund, while keeping everything else in external (e.g. Fido, Schwab, or VG) TIRA and Roth IRA accounts. If they change the G fund, then there's no point in keeping more than $1500 or so in a TSP account (to keep it open for rolling-in, just in case the World changes.) Happy T-day all!
One cannot enlighten the unconscious.

Topic Author
MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Nov 28, 2019 10:17 am

As always, I agree with TimeRunner. If the G Fund is altered, I’ll reduce my TSP account to under $500.

MichDad

ChrisC
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Re: Thrift Savings Plan Withdrawal Process

Post by ChrisC » Thu Nov 28, 2019 11:17 am

MichDad wrote:
Thu Oct 17, 2019 2:36 pm

TRANSFER TRADITIONAL FUNDS TO A TRADITIONAL IRA, ROTH TO A ROTH IRA
"It sounds basic, but you want to get this right the first time. When you are transferring your TSP funds, make sure you transfer them to the correct type of account. This will prevent problems with the IRS. Both the TSP-70 and TSP-77 have sections for both Traditional and Roth contributions and transfers.

If you want to convert a Traditional account to a Roth account, it’s best to do this in two separate transactions. Complete your TSP to IRA Rollover, then perform a Traditional IRA to Roth IRA rollover."


I'm less certain of the answer to your second question. I'm currently 64 years old. My plan with my regular (non-Roth) TSP account is to transfer a portion to a rollover IRA (a traditional IRA) and then to convert portions of it each year to a Roth IRA (of course, paying the taxes due upon conversion). I like the two-step process because it leaves a clearer paper trail. I want to remain in the 24 percent federal income tax bracket and I'm hoping to convert about $200,000 per year from a rollover IRA to a Roth IRA until I turn age 70. I may continue to make Roth conversions after I turn 70 but those conversion amounts will likely be much smaller, since we'll also have substantial Social Security income.

Two observations about the two-step process in connection with Roth conversions from the non-Roth TSP. First, if you're in a State, which specifically shields certain TSP distributions from State income taxes (like NC under the Bailey settlement), the two-step process will result in State income taxes upon the conversion from the tIRA to the Roth IRA, whereas conversions directly from the non-Roth TSP to a Roth IRA should not result in State income tax liability from that one-step conversion. Secondly, one should be very careful about the level of conversions, in either case, if one enrolls in Medicare Part B at 65. The IRMAA surcharges can be substantial, especially if you go deep into the 24% tax bracket, as this bracket at the upper end covers two IRMAA tiers, and going over one dollar into the higher tier, will result in almost an extra $1000 in annual IRMAA premium surcharges. For a couple, that's an unnecessary $2000 premium hike if enrolled in Medicare Part B. For some in a good FEHB plan, the extra belt and suspenders from Medicare Part B enrollment might not be a good idea if you're doing substantial Roth conversions and wind up paying $462.70 per month per person (at the 4th IRMAA tier) for Medicare Part B coverage.

One thing not clear from your post and from the TSP rules on withdrawals or transfers/rollovers is whether TSP automatically withholds 20% for Federal tax purposes. Did TSP give you the option of Federal tax withholding?

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MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Thu Nov 28, 2019 2:17 pm

As I recall, the TSP withdrawal wizard gives participants the option to have or not have taxes withheld from the withdrawn amount. I opted not to have taxes withheld and my request was honored.

MichDad

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MichDad
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Re: Thrift Savings Plan Withdrawal Process

Post by MichDad » Wed Dec 18, 2019 5:02 pm

As I’ve described above in this thread, I’ve been making withdrawals from my TSP account using the new liberalized withdrawal options that became effective in mid-September 2019. First, I transferred my Roth TSP to a brokerage firm. I described that transfer process in my October 17, 2019 post that begins this thread. Second, I transferred over $650,000 from my traditional TSP account to a different brokerage firm. I described that transfer process in my November 20, 2019 post on this thread.

On December 9, 2019, I initiated monthly installment payments from my traditional TSP account to a high-interest bank account. The wizard used to make these monthly withdrawals does not allow TSP participants to designate the date(s) those withdrawals should be made. I faxed in my notarized withdrawal form to the TSP on December 9th. The first monthly installment payment was deposited into my bank account on December 13, 2019. If I had been given the choice, I would have set up my installment payments to push the transfers into my bank account just before the first of each month.

To recap, the new, improved TSP withdrawal process still has room for improvement. Most importantly, spouses of TSP participants should be permitted (but not required) to submit long-lasting notarized permission for the participants to make TSP withdrawals. In my case, I had to bring my wife three separate times to a notary to sign my TSP withdrawal forms. She would have preferred to sign a long-lasting notarized form that she could withdraw in writing at any time and that would remain on file with the TSP. Note that the TSP has the capability to retain members’ beneficiary information. Retaining spousal permission for withdrawals would be just as simple.

Second, TSP participants and beneficiaries should be permitted to take care of several types of withdrawals at one time through one notarized form. As described above, it took me from September 30 to December 13, 2019 to make these three transfers to three different entities (two brokerage firms and one bank).

Third, TSP participants and beneficiaries should be permitted to set the specific dates they want their installment payments to be made.

Fourth, TSP participants and beneficiaries should be permitted to pay a fee to wire funds to the brokerage firms or banks of their choice.

Fifth, TSP participants and beneficiaries should be permitted to submit their signed and notarized withdrawal forms electronically as pdf or other similar files. At present, only facsimile or hard paper submissions are permitted. Electronic pdf or similar files would be faster, cheaper, and the images would be of higher quality than facsimiles.

Finally, while not directly related to improving withdrawal options, the TSP should allow participants and beneficiaries to make in-plan Roth conversions, as is offered by many private 401(k) plans, rather than require them to rollover those assets to IRAs at brokerage firms or banks before they can then be converted to Roth IRAs. This change would allow participants and beneficiaries to keep their assets within the low cost TSP for extra years or until Required Minimum Distributions begin at age 70.5.

MichDad

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VictoriaF
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Re: Thrift Savings Plan Withdrawal Process

Post by VictoriaF » Tue Dec 24, 2019 12:34 pm

MichDad wrote:
Thu Oct 17, 2019 11:22 am
...
One thing that was confusing about the wizard concerned my payment method. I chose to have the payment made by check mailed to my address of record. The only alternative was to provide a bank routing number and account number. My brokerage firm advised me not to use any of its routing or account numbers. I assumed the mailing option meant what it said – that my Roth TSP account balance would be sent to me via a check mailed to my residence and that I would then have to forward that check to the brokerage firm causing a further delay. To my pleasant surprise, this is not what happened. The brokerage firm inputted its address in the section designated for its use. The TSP mailed the check directly to the brokerage firm.
...
I hope other TSP participants find this information useful.

MichDad
Thank you, MichDad. Your thread is very useful.

I had a similar situation when I was trying to change my transfers from TSP to Vanguard. I did not want a check mailed to me, and for now, changed the amounts rather than the frequency. Later, Laura told me that, at Vanguard, I could created a checking-like roll-over IRA account and specify Vanguard's routing number together with this account's routing number for future transfers.

I have not done this yet,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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VictoriaF
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Re: Thrift Savings Plan Withdrawal Process

Post by VictoriaF » Tue Dec 24, 2019 12:38 pm

MichDad wrote:
Wed Dec 18, 2019 5:02 pm
Third, TSP participants and beneficiaries should be permitted to set the specific dates they want their installment payments to be made.
This would be useful.
MichDad wrote:
Wed Dec 18, 2019 5:02 pm
Finally, while not directly related to improving withdrawal options, the TSP should allow participants and beneficiaries to make in-plan Roth conversions, as is offered by many private 401(k) plans, rather than require them to rollover those assets to IRAs at brokerage firms or banks before they can then be converted to Roth IRAs.
This would be the most useful.

MichDad wrote:
Wed Dec 18, 2019 5:02 pm
This change would allow participants and beneficiaries to keep their assets within the low cost TSP for extra years or until Required Minimum Distributions begin at age 70.5.
MichDad, you mean at age 72?!

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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