Would like some advice

[Tabernacle]

I retired as city carrier on 30 June of this year. BTW, thoroughly enjoying it. The wife retired a few months earlier from Blue Cross. I took out a general loan a few months earlier for 15000.00 from my tsp to purchase some land. I did this before I retired, have 90 days to pay it off. Wife has fidelity 401k 109,000.00 making a little less than 10%. If we withdraw any amount from hers we have to withdraw it all and if I take the loan as a withdrawal from my tsp I will use up my only partial withdrawal( as it stands now),depending on what Congress does. Question- Rollover fidelity 401k to my tsp(considering seriously) or take withdrawal from tsp? Sorry about the length but it's rather involved.

[TSPTiming]

It's not possible to roll over your wife's 401K into your TSP, so that eliminates that possibility. You wouldn't want to pay taxes on your wife's entire 401K if you had to withdraw it all, so it sounds like the only option is a partial withdrawal of your TSP to pay off the loan balance, assuming you have no other source of cash to do that...then hope that Congress actually gets their act together this fall and passes a bill to expand TSP withdrawal options starting next year. I'm watching that closely myself since I plan to retire December 2018 and it could make the difference between staying in the TSP or rolling over my entire TSP to an IRA.

[Tabernacle]

I read where you can roll over a eligible retirement fund into the tsp. seehttps://www.tsp.gov/PDF/formspubs/high14d.pdf. Hers is not a roth.
So, you're saying that a married couple cannot combine their 401k's into one. Is that the reason I cannot roll hers into mine?

[evilanne]

Cannot answer your question without knowing you & your wife's ages. If under 55 or 59.5, depending on the account, you may also have early withdrawal penalty. Is there a way you can get a loan from the bank or credit union to pay of the TSP loan? The interest expense may be less than the tax impact of withdrawing retirement funds which would be taxed as ordinary income at your marginal tax rate plus any penalty that may apply.

The only way you could transfer spouses account into your own would be in the event of the other spouse's death and that does not change the tax impact.

[Tabernacle]

Ok. Thank you. We are both over 60. We have the cash to pay the loan off, but did not want to expend most of our working capital. I was under the impression that I would be able to roll over hers into mine. Thank you for correcting me on that. That certainly limits my options, but that's ok.

[evilanne]

Do you have a withdrawal strategy for your TSP? Once you pay off the loan, you can do a full withdrawal with monthly payments and have the option to change the amount once a year. It can be as little as $25/month but you can set the amount for the first year to an amount that will replenish your working capital. Another option is monthly life expectancy where TSP calculates the amount based on your age. Retirement Income calculator will give you an idea of what monthly payments would look like based on a fixed amount or life expectancy/RMDs at 70.5 https://www.tsp.gov/PlanningTools/Calcu ... lator.html

Interesting thing if you choose life expectancy late in the year, they will calculate the annual amount (12/31/2016 Balance/age factor) and divide that out over the number of months remaining e.g. suppose it is $1,000 per month or $12K annually, but it doesn't get processed until late this month or beginning of October, with only 3 months remaining you would get $4K per month until they recalculate it for next year based on your end of year balance. This may be helpful in your situation. Only downside is the rules in switching between life expectancy and monthly payments so you need to make sure you understand the rules. The payment changes each year based on your end of year balance. Withdrawals from TSP are taxed as ordinary income so it is advisable to talk to your tax advisor as well as TSP to make sure you understand the impact and plan for proper tax withholding.

[crondanet5]

Did you take your health care plan into retirement?

Best to roll the whole thing out into a rollover IRA. That postal pension isn't that much and you may need to tap the TSP money to live. You should aggressively manage your TSP Account to take full advantage of the tax deferred status and restore the money you withdraw. The key is to have lots of IRA cash in your Account when you are 80 years old. Work at it.

[Tabernacle]

Thank you all for the input of advice. I did take my health plan into retirement. I am aggressively managing my tsp using the info I find on this site.( daily seasonal) I will use the cash I received from my reimbursement of annual leave( 440 hrs) and take the rest out of the money I've saved at postal credit union to pay off the tsp loan. I don't really want to tap the tsp yet. I've found that being debt free we can live satisfactorily on our joint pensions and social security. At the risk of sounding like a broken record, I sure thought I could roll over her 401k into my tsp. Thanks for setting me straight on that one.

[RedWine]

Kudos and thanks. Lots of good info.

[Winner]

Tabernacle,
You require to either pay off the loan or declare as taxable income. ( To answer your question your loan is not consider as your partial withdraw if you decide not to pay off). TSP will not allow you to withdraw your money when you still have an outstanding loan.

I retired on 6/24 (a few days before you) with an outstanding loan too. A year ago I was planned to transfer all my money to IRA & ROTH IRA, but I completed TSP Form 77 (Partial Withdraw) and faxed to TSP on 8/28 (2:PM PST or 6 PM EST). A letter dated 8/30 was added to my correspondence on the my tsp account with the list of detail related to my withdraw. The money deduced from my TSP account on 8/30. According to TSP website stated it take 2-3 business days for direct deposit and a check will take about 10 business days (so it is on the way to my IRA & ROTH IRA).

[Tabernacle]

Thank you, Winner
I just assumed that the loan,if not repaid, would count as my 1st and only partial withdrawal. Glad to know that it will not. Gives me a few more options. May partially repay it and let the rest be a taxable distribution. I'm a little confused, however. You said that you retired with an outstanding loan and yet received a partial withdrawal on 8/30. Could you clarify that for me. Thanks

[Winner]

Tabernacle,

sorry, that I missed your post. I received TSP letter stated: The Thrift Savings Plan (TSP) has closed your loan by declaring a taxable distribution...and I received a partial withdrawal deposit to my account on 9/5. So by declaring a taxable distribution is not count as a partial withdrawal.