I plan to spend all my money before I die. I did not save it for retirement to preserve it for my family. so i plan to take an amount that is figured only to age 85. if that means 10,000 a month, after age 72, so be it.
@kennypughcountrymusic5767
3 жыл бұрын
Not sure if I chose it when I retired 5 years ago, but they are only taking 10% withholding from my TSP payment. I've been making my yearly tax estimations (no easy task) and adjusting the pension check portion accordingly. You are correct. Taxes are my #1 bill per year.
@PlanYourFederalBenefits
2 жыл бұрын
Thanks for sharing!
@arleenm7367
3 жыл бұрын
You have to keep in mind that TSP contributions are not taxed while you are working (except the Roth TSP). Contributing a large amount will probably put you in a lower tax bracket during your working years, which is helpful for many people.
@PlanYourFederalBenefits
2 жыл бұрын
Good point!
@Tkh21209
2 жыл бұрын
Is there a way to calculate if I am saving now vs if I would when I retire in taxed as in being in lower tax brackets now vs later? My issue is I end up doing OT alot so too offset my extra income I Contribute more to TSP but thinking about ROTH instead due to later benefits
@glasshalffull2930
3 ай бұрын
@@Tkh21209 In 2024, for married filing jointly, first $23K is taxed at 10%. From $23K to $94K is taxed at 12% and $94K to $202K is taxed at 22% and it goes up. Big leap from 12% to 22% and so you ‘ideally’ want to stay below $94K as much as possible. To figure it out, you add your projected annual pension, plus SS estimate, plus TSP withdrawal to see where you fall. The Required Minimum Distribution (RMD) age has been raised to 74 or 75. The RMD is usually about 4% of your TSP nest egg. So if you had $1 million you would multiply the nest egg by 0.04 and get an RMD of $40K per year in this case. Add this to your pension and your SS to see what tax bracket(S) you into.
@Dave-sw2dm
2 жыл бұрын
My plan is to try really hard to not exceed the 12% tax bracket when I retire. In years when I don't need to spend my entire take home pay I will have saving built up for large expenses that might exceed the 12% tax bracket. The goal will be to minimize taxes across the board.
@PlanYourFederalBenefits
2 жыл бұрын
Great plan!
@easterlake
2 жыл бұрын
With standard deductions being so high, a married couple can drawer over 100k and never leave the 12% bracket. In fact, your effective federal tax rate is under 9%
@bannertraveller5879
2 жыл бұрын
Thank you for letting us know that if you move your money to an IRA from TSP prior to age 59.5 that you would then incur the 10% penalty on any future withdraws
@coolkid5845
3 жыл бұрын
Very informative. I was surprised that we do not have a penalty for withdrawals from tsp before age 59. I will need to look for information. Timely video for me.
@PlanYourFederalBenefits
2 жыл бұрын
Glad it was helpful!
@Kimm721
2 жыл бұрын
It's only a penalty when you withdraw before 59.5 and not retired.
@my73Thing
2 жыл бұрын
Thank you so much for information cant wait for my appointment next month. I guess this question can be taken off my list LOL
@shirleywells6622
3 жыл бұрын
Please note that spikes in your income will affect your Medicare premiums. Been there, done that.
@PlanYourFederalBenefits
2 жыл бұрын
Great point!
@JpOcDenver
2 жыл бұрын
Most people in the comments need to google marginal tax rate. A higher income bracket will never result in a loss of net income. Each marginal tax rate only applies to income within that specific tax bracket. You only pay the higher rate on the money ABOVE a set amount. FOR EXAMPLE: in 2022 if you make $100,000 with your spouse, and file jointly, you pay 10% income tax on the first ~$20,000. Then you pay 12% on everything above that, up to $81,050. So even though at $100k you’re in the 22% tax bracket, ONLY $18,950 IS TAXED AT 22%. So you’re not going to owe $22,000 in taxes (22%). You will owe $13,500 for an EFFECTIVE tax rate of 13.5%.
@PlanYourFederalBenefits
2 жыл бұрын
Great point!
@jamesp9998
3 жыл бұрын
Do a video on how this compares to Roth distributions
@PlanYourFederalBenefits
2 жыл бұрын
I'll put in on my list.
@robertreynolds8667
2 жыл бұрын
I have a Fidelity 401k from a company I retired from. I now work for the government and contribute to TSP. If I roll over my Fidelity account to TSP, when I do retire to a state not taxing the TSP, do all the funds now fall under no state tax.
@AhujaEnt
3 жыл бұрын
Thanks for the continued videos!
@PlanYourFederalBenefits
2 жыл бұрын
You are very welcome!
@robinroberts2649
2 жыл бұрын
I rolled over more than half of my tsp into and IRA. TSP then sent me a letter to tell me that my current balance was technically not going to last me more than 7 years and so they raised the tax % on my monthly distribution. Of course they are not basing this on the possible increases or decreases based on the market performance. I want to know why the increase in tax? I take $2000 out monthly which yields me $1600 Before I transferred money into the traditional IRA, the $2000 yielded me $1800 monthly.
@PlanYourFederalBenefits
2 жыл бұрын
They withhold 20% whenever they think the distribution is going to last less than 10 years. However, just because they withhold more it doesn't technically change how much taxes you are actually going to owe at the end of the year.
@faustogonzalez8397
2 жыл бұрын
Are you speaking Effective Tax Rate , when you mention to have the TSP distribution taxed before you receive the distribution. Thanks so much great video.
@_BARCODE
Жыл бұрын
I only put into the roth option
@user-cx6ju4gs4q
Жыл бұрын
Thank you for this educational session.
@danieljustdaniel9550
2 жыл бұрын
My annual retirement salary before taxes and deductions is $67,200 which puts me in the marry filing jointly 12% range. Im nowin the process of taking $70,000 out of my TSP adding the 20% taxes which is $14,000 plus adding a additional $4000.00 for a total of $88,000 ( the extra to cover state taxes) that will put my total income for 2021 at $ 155,200 which will put me in the 22%bracket for the year. Correct?
@JpOcDenver
2 жыл бұрын
Yes, but remember how marginal tax brackets work. You’re only taxed 22% on any income beyond $81,050. You will be taxed 10% on the first ~20k. Then 12% on the next $61,050. Then the remaining $74,150 will be taxed at 22%.
@brfrench1
2 жыл бұрын
Wow very educational. I am interested in more tsp / ira info.
@PlanYourFederalBenefits
2 жыл бұрын
Hey Brenda, thanks for your comment. There will certainly be more of that in the future. Have a great day!
@markmiller3210
Жыл бұрын
Please note - NY State DOES NOT tax TSP withdrawals for FERS federal employees. i have all 3 tax advisories issued by the NY State Tax Court on this subject if anyone is interested. Thanks.
@Dave-sw2dm
2 жыл бұрын
The mandatory withdrawal will definitely affect my calculations regarding whether I delay taking SS in order to draw down my TSP enough to not be forced to draw too much in my 70s.
@PlanYourFederalBenefits
2 жыл бұрын
Good point!
@darrinsutterfield7732
3 жыл бұрын
Hello, I have a question? I understand TSP withholds 20% when you withdraw but what if you don’t owe the IRS that much? What happens to the remaining funds?
@arleenm7367
3 жыл бұрын
You will get it back from the IRS when you file your tax returns.
@AncientShadow
2 жыл бұрын
Its required but you'll get it back as tax refund
@josephmonteferante986
2 жыл бұрын
I suggest having a tax accountant to help you through all this that's what I did because between my pension , social security and thrift savings he told me what my holdings should be on each amount coming in Avery month
@mikedv39
2 жыл бұрын
Q when i retire, I will be asking TSP for $2,000 a month. Will I get a monthly reduction of the 22% I fall in = $1,560 or do i get the $2,000 and get taxed at the end of the year. If taxed up front I will then need to take $2,600 in order to get the required $2,000 needed - $2,028 Thank you for your help.
@JpOcDenver
2 жыл бұрын
You can designate the withholding, which is the money taken out of the payment for taxes. It defaults to either 10 or 20%. If you need $2000 net, you’ll need to increase the payment amount equal to the withholding amount, or set your withholding to zero and pay all the tax at the end of the year.
@chauthi1191
2 жыл бұрын
I plan to retire at age 67or one year later ( 2022 or 2023) I keeping my money in TSP. To prevent forget withdraw money, what’s the best year I should start withdraw minimum money out of TSP to avoid 50% penalty on age 72 .
@PlanYourFederalBenefits
2 жыл бұрын
RMDs will start for you in the year you turn 72.
@stevedavis3370
3 жыл бұрын
Great explanation on taxes. Thanks!
@PlanYourFederalBenefits
2 жыл бұрын
Glad it was helpful!
@philforonda7589
3 жыл бұрын
So, if you're in a higher tax bracket than 20%, you can notify TSP to take out a higher amount? Also, does TSP notify you when you need to take RMD based on the new age limit, or do you need to initiate action by designating the amount & frequency of payments? Does TSP send a separate end of year distribution statement, or is it listed in combination with the federal pension earnings? Also, is it correct that any remaining TSP balance will continue earning in designated funds, once RMD is started?
@PlanYourFederalBenefits
2 жыл бұрын
You can have TSP take more than 20% if you want. Also, you can continue to invest your TSP once RMD's start.
@lovedogs4989
2 жыл бұрын
I retired under 6c retirement so not subject to 10% penalty after age 50. I am working part time now with a traditional 401k. Can I transfer the current 401k to TSP after retirement to take avoid penalty on new 401k?
@michaelvadney5803
3 жыл бұрын
Thanks Dallen!
@PlanYourFederalBenefits
2 жыл бұрын
You are very welcome!
@michaelvadney5803
2 жыл бұрын
@@PlanYourFederalBenefits here is a question for you. Being that I am a fed with a TSP you know that your income comes from selling stocks in your TDP. The TSP consisting of stocks can easily out produce a path of buying stocks that produce dividends for income. Of course the big downside of basing your income on stock values can also drop dramatically. Which path would you recommend? Selling TSP stocks or converting the TSP into an IRA set up for dividend growth? As always, thanks
@danraymond1755
2 жыл бұрын
Very informative. Thanks
@rappwash
3 жыл бұрын
If the IRS does not agree with social security of giving me disability and i get a distribution from my regular TSP and would have to pay a penalty since i younger then 59.5 is the penalty also used in provisional income calculation?
@jessicag4940
2 жыл бұрын
If you get a job in retirement and contribute to the 401K (non federal)... are you limited in taken out TSP or as long as you are eligible (50 with special provisions) you are allowed to do the partial withdrawals at anytime just have to pay taxes... and then can still contribute to another 401K with salary from other job? and Roth IRA as I would think salary would decrease at that time so you become eligible to contribute to that as well?
@kellyrenot3971
2 жыл бұрын
I moved my tsp into a G fund after approval of fers disability...What should I be concerned with?..I am way under 59 yrsof age too
@watchinyourback295
2 жыл бұрын
My MRA is 57. That 10% penalty shouldn't apply to me right?
@cdakskid
3 жыл бұрын
Off topic, but can you address if FERS retirement benefits and/or TSP funds are protected from lawsuits? Do you recommend umbrella policies for those cases?
@PlanYourFederalBenefits
2 жыл бұрын
Umbrella policies can be helpful for many people with this concern.
@Mc.flyyy11
3 жыл бұрын
RMD is no big deal, once your forced to, just take the money and reinvest in other assets or investment vehicles. Dont sweat it
@glasshalffull2930
3 ай бұрын
For ‘most’ you are probably correct. But for many who were 100% in the S&P500 and stayed 100% after retirement, you may have several million dollars in your TSP. If that’s the case, the RMDs could put a large amount in the 24% bracket or if single filing into the 32% bracket. Some very serious extra taxes that you can possibly avoid by early adjustments to your withdrawals.
@danieljustdaniel9550
2 жыл бұрын
Yes but our tax rate only goes up that year u take out a large portion of your TSP .If the next year you are onlt in the 12% for that year that is waht you pay, correct?
@PlanYourFederalBenefits
2 жыл бұрын
Right, every tax year will be based on the income only in that year.
@bleebu5448
3 жыл бұрын
So what you are saying is that I could limit my tax bracket by strategically withdrawing from my tsp. So, if I wanted to be in the 22% bracket, keep the sum of my pensions, SS, and TSP withdraw under that, taking into account standard and itemized deductions that I may qualify for?
@christinemeers4858
3 жыл бұрын
Correct
@davido6880
Жыл бұрын
Is your pension considered income on the tax bracket?
@thomas8827
2 жыл бұрын
Hello boss, My head is spinning, dum question how to calculate what tax bracket I will be. Is it based on income and how to keep below 12%. Trying to learn all this it’s all new to me my apologies and Thank you 🙏
@PlanYourFederalBenefits
2 жыл бұрын
I'll put that on my list for future videos. Have a great day!
@thomas8827
2 жыл бұрын
@@PlanYourFederalBenefits Thank you much. 🙏
@stringbeans8
2 жыл бұрын
Hello, thanks for the video, if I retire at 60, and want to keep social security income earning limit , is an LLC earnings counted as income? Can I contribute to Roth from LLC earnings?
@PlanYourFederalBenefits
2 жыл бұрын
Yes, generally a LLC earnings will count if you are actively involved in it and if that is the case then you can often fund a Roth IRA with the income.
@thomasdagostino9273
2 жыл бұрын
I understand this is an older video and this question may have been asked before but I am wondering, is my TSP taxed by FICA or Medicare etc... as if its a normal Payroll income. I was previously informed my Pension is not subject to FICA taxes and such because these are not forms of "Worked" earned income and as such are only taxed federally. Can you please just as a line or two for clarification sake. Thanks
@PlanYourFederalBenefits
2 жыл бұрын
No, It is Fica doesn't come out of TSP withdrawals
@danjuhas3094
3 жыл бұрын
Thanks for the tax thumbnail, Dallon. Stupid Question: Is my tax bracket calculated on (what will be; not retired till july 2022) total income (SS supplement [age 60- 62], plus pension, plus TSP disbursements)? Or, my TSP withdrawals alone? It could mean the difference (in my case) of 12% or 22% tax rate.
@christinemeers4858
3 жыл бұрын
It is all together what gets taxed. Your pension plus the supplement plus your income plus tsp withdrawals plus dividends/interest (if applicable). Add it up subtract the standard deduction and voila that amount will be what’s taxed at whatever tax rate that amount falls into. And there’s more. You also may have to pay state taxes on that amount. Depends on the state.
@huebner1019
2 жыл бұрын
It is all together. The taxes are a lot more than I expected. If you have pension, tsp an social security you may end up in a higher tax bracket then you thought you would. When RMDs start I will be really hurting so decided to put off social security and spend down my tsp so I can flatten the taxes more. Hopefully RMDs will be lower due to lower balance. Plus good to spend while you are young enough to enjoy.
@ncmichael938
2 жыл бұрын
What are the three options that can be used at retirement so that you don’t have to use MetLife???????
@billjordan1173
2 жыл бұрын
I believe the only withdrawal that requires you to use MetLife is if you take an annuity. If you set up your withdrawals yourself as a monthly amount either based on an amount of your choosing or your life expectancy computation, that is not an annuity. But I'm certainly no expert, and still a few years away from having to withdraw mine.
@PlanYourFederalBenefits
2 жыл бұрын
Check this out: hawsfederaladvisors.com/the-best-tsp-withdrawal-options-and-strategies/
@tjlazer71
2 жыл бұрын
How about DSR Retirees retiring at age 50, do they have to wait until 55 as well?
@PlanYourFederalBenefits
2 жыл бұрын
Special provisions employees can get to their tsp as early as 50.
@TM-ui9gt
3 жыл бұрын
Hi, I purchased the Building Wealth in the TSP from Amazon and wondering if there is an error on page 25 in the loan comparison table. Should the columns in the last row regarding the effect on taxes be switched around?
@PlanYourFederalBenefits
2 жыл бұрын
We'll check it out. Thanks for letting us know!
@patticook5435
3 жыл бұрын
Hi, I am widowed with two young children. I will never remarry. I have 6.5 years until retirement. I would like to know what is my best option to leave my TSP to my children with the least amount of taxes?
@PlanYourFederalBenefits
2 жыл бұрын
Any money you have in the Roth TSP will be tax free for them but your traditional TSP will be taxable for them when they take it out.
@baller1515
2 жыл бұрын
I keep saying "Mega Backdoor Roth IRA" on YT where you can contribute up to $57k annually . Does the TSP have any "after tax" contributions option?
@PlanYourFederalBenefits
2 жыл бұрын
No, they don't.
@AJBAF
2 жыл бұрын
In regards to the The Tax chart you used in the video, were those amounts for annual amounts of money taken out of tsp or are they monthly amounts?
@delbrett2257
2 жыл бұрын
Tax rate charts are annual amounts
@ampiciline
Жыл бұрын
hi , i am 53 years old and 20 years service at VA dep . is there any way that i start taking out my TSP without that 10 % penalty ? i think I saw somewhere if i would take out in instalment fashion monthly that could be waived , even if I am not at 55 age ...is that true ???? is instalment withdrawal waves the 10 % penalty for people who are not at age of 55 yet if you were at VA dep ?
@PlanYourFederalBenefits
Жыл бұрын
Feel free to submit your question here: app.hawsfederaladvisors.com/question-submission This is where we get topics for future videos.
@pameladavis3991
2 жыл бұрын
If I leave my money in the tsp after retirement how do I make withdrawals? Monthly? And does it continue to grow as it always has when I was working.? How much control do I have?
@PlanYourFederalBenefits
2 жыл бұрын
There are many different withdrawal options including monthly if that's what you want. You are able to invest it in retirement just like you did while you were working. You just can't put more money in.
@WrvrUgoThrUR
2 жыл бұрын
I’d take it all out, take the tax hit, invest it in non-us dollar related assets. Time is ticking on the USD. 10 more years, and the last 2% of its value will have been surpassed.
@user-cx6ju4gs4q
Жыл бұрын
I had to retire due to a disability.
@keithdomke5136
3 жыл бұрын
How do you know what your RMD dollar amount is at age 72? Are you just notified of what it will be for the year, is it a certain % of your balance that you can calculate?
@christinemeers4858
3 жыл бұрын
There are rmd calculators online. Put in the amount you will have @ 72 and it will tell you the amount. It’s based on your life expectancy. I am pretty sure that tsp will notify you.
@chevman46
Жыл бұрын
I'm 58 drawing money from my tsp ... how do get tax free ...?
@ljs0511
2 жыл бұрын
Do u recommend I take monthly payments or yearly withdrawal
@ljs0511
2 жыл бұрын
From my tsp sorry left this part out
@brianturner7940
3 жыл бұрын
What is the percentage or amount that's required at 72 RMD? I've never heard that number. Thanks for your help.
@brianturner7940
3 жыл бұрын
Also, what counts against your income for the year ? Pension? Social security and TSP? This would tell us what tax percentage (roughly) they will be using . Thanks
@glasshalffull2930
3 ай бұрын
The amount is very close to 4%. The exact number is based on life expectancy each year. For age 72 it’s (TSP total / 26.5)
@seankmath2214
3 жыл бұрын
My wife and I are GS workers, I'm 10 years older than her. Let's say I die at 62, is she able to use my TSP or does she have to wait till 59.5? Thanks
@christinemeers4858
3 жыл бұрын
Probably best to call the tsp helpline and ask. I have always found them helpful. I’m pretty sure it would be considered an inheritance by a beneficiary and the 59.5 does not apply. But best to make sure directly with tsp
@AKAFT
3 жыл бұрын
If a retired employee buys an annuity through TSP, the taxation occurs when the annuity payments are made in the future, right? Thank you.
@5050kas
3 жыл бұрын
annuity is not the best option
@cdakskid
3 жыл бұрын
@@5050kas I've NEVER heard a reputable advisor recommend buying an annuity.
@5050kas
3 жыл бұрын
@@cdakskid that’s why I said not the best option
@cdakskid
3 жыл бұрын
@@5050kas my comment was meant to be in agreement with yours!
@christinemeers4858
3 жыл бұрын
Yes payments will be taxed.
@mcz68l
3 жыл бұрын
Can we please stop saying "the IRS says this"it's the laws that Congress wrote that says this. IRS employees are Federal employees (I am not an IRS employee)
@StumpRider719
3 жыл бұрын
True, but the IRS writes it in the IRS Code for IRS Federal Employees to execute. Congress doesn't come down to Audit your income taxes, the IRS employee does. Semantics!
@mcz68l
3 жыл бұрын
@@StumpRider719 And they get to write that code how?
@StumpRider719
3 жыл бұрын
@@mcz68l In a code book.
@mcz68l
3 жыл бұрын
@@StumpRider719 and they can make up this code book with no say from Congress or the executive branch?
@StumpRider719
3 жыл бұрын
@@mcz68l Come on man! OMGosh! Yes of course planning teams, staffers at varies levels with a bunch of bureaucracy write the Internal Revenue Code (IRC) in which the IRS is the Arm of execution. LOL!
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