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.
NY Department of Taxation and Finance, Common questions and answers about pension subtraction adjustments: CSRS: (Civil Service Retirement System) - if the federal employee was hired before January 1, 1984, income from their Thrift Savings Plan is considered supplemental for which the exclusion is subject to the age and amount limitation to the extent it is included in their FAGI, not to exceed $20,000. FERS: (Federal Employee Retirement System) - if a federal employee was hired on or after January 1, 1984, income from their Thrift Savings Plan is fully excludable to the extent included in FAGI.
@@kenweiss6720 all I have is this. Not sure about CSRS. Please see: 1. www.tax.ny.gov/pdf/advisory_opinions/income/a17_1i.pdf “We conclude that the lump sum distribution attributable to contributions made by Petitioner and his employer to his TSP account while he was a Federal employee will be exempt from New York State income tax if the amounts are included in Petitioner’s Federal adjusted gross income (FAGI).“ 2. www.tax.ny.gov/pdf/advisory_opinions/income/a94_1i.pdf “Herein, with respect to Issue "1", where an employee is covered by FERS, the distributions received by such individual from such employee's TSP account are considered part of such individual's pension and may be allowed as a deduction from Federal adjusted gross income, pursuant to section 612(c)(3) of the Tax Law, to the extent includible in gross income for Federal income tax purposes.” 3. www.tax.ny.gov/pdf/advisory_opinions/income/a15_6i.pdf “We conclude that distributions that are attributable to contributions made by Petitioner and her employer to her TSP account while she was a Federal employee, including the accumulated earnings from those contributions, will be exempt from New York State income tax, if the amounts are included in Petitioner’s Federal adjusted gross income (FAGI).”
Retired at 55 with 34 years of service under a VERA/VSIP in September 2022. I waited until January 1, 2023 then took it all out and used the rule of 55 to avoid an additional 10% penalty. Investing now and doing much better than TSP management.
Thank you for your informative videos! I started monthly automatic TSP withdrawals a few months ago and was surprised that they didn't take out any taxes. Now I'm finding I need to re-adjust my pension taxes in order to compensate (which is fine as far as I'm concerned). Last year when I took money out of the TSP (all at once) they took the 20%. I got a nice refund from the IRS but owed my state most of that. Watch out for those state taxes. Also, be aware that automatic monthly TSP withdrawals are always on the 15th of the month (or the Monday after if it's a weekend). I don't believe you can pick a different date for monthly withdrawals.
The 20% actually helps, because if you live in a state that also taxes your withdrawal (most of us do) of course over time this will be different for those who choose to be in the "ROTH"
This was really informative. During my withdrawal I noticed the 20% withholding was deducted from the TSP amount. During this tax season I'm curious if I need to pay taxes on this again after the fact?
That's a great question. When it comes to questions like this, it's hard to give a universal answer. The answer depends on your circumstances. The 20% withholding that you mentioned was the federal tax withholding, but the question still remains whether you owe more taxes. If you would like to have a one-on-one meeting with us to go over every detail, feel free to schedule an appointment with us: hawsfederaladvisors.com/work-with-us/
Thank you. Your videos are very helpful. If at retirement your money is in the G Fund (or whatever fund), can you choose Installment Payments and then subsequently, over years, move your money from one Fund to another? For example, if a person retires with everything in the G Fund, and then after retirement, can they move their money into the F Fund or into some other Fund? And, can they keep their money in the TSP until the day they or their spouse (beneficiary) die? Thank you for all the great and informative videos you put out!
After 59½ it makes no sense to keep either traditional or roth tsp. The tsp is no longer the low cost option and the withdrawal options are terrible. Not to mention they made the website horrendous to use.
Does NY state tax TSP withdrawals from CSRS federal employees? If yes, is there an exclusion if the withdrawal is under 20K in a year. Any references will be appreciated. Thanks!
HELP...Retired ten plus years, everything in G fund and getting RMDs every December, paying taxes twice on this withdrawal. Please, please give me suggestion on what I can do before I run out of my retirement money all together!! Thank you!
Also... Everything in the G fund is a mistake! The G fund does not even cover inflation (and that is not coming from me, that is coming from the TSP folks). So if everything is in the G fund then you are losing money to inflation.
Here's what I don't understand. If we take out a loan, and the repayment is not deferred like how our regular TSP deposits are, how come that loan repayment is not converted to a ROTH?
So when it comes to annuities, my question is why are you buying an annuity? So before you buy an annuity you should ask yourself why are you buying an annuity don’t cha think? Annuities often comes with higher management fees compared to mutual funds and other investments. True, and these fees are higher for a lot of reasons that I won’t go into here. So I won’t buy an annuity because, anything that requires me to give up control of my money, is never a good thing to do. So an annuity is a type of contract between you and an insurance company, it’s a reverse insurance product, where you pay the insurance company, and then they pay you. How does that make any sense? It doesn’t! It should be noted, that there’s a lot of rules that you need to understand before signing on the doted line, because once you sign on the doted line, your decision is irrevocable, meaning, that you can’t change it. So read, and understand what you’re doing before you do it, is my advice. Cheers 🥂
So don’t quote me on this, but I believe Roth IRA withdrawals are all tax free, because you already paid the taxes on the front end, so there’s no withholding once you withdraw your money at retirement, and there’s no RMD’s either, ever, as it’s one of the advantages of the Roth IRA over the Traditional IRA. I personally don’t believe that it’s much of an advantage or benefit, but some do! Cheers 🥂
DONT touch your TSP. Sell a car or whatever, but dont drain your retirement savings losing out on that money, the taxes, early withdrawal fee's and whatever multiples would have been produced.
Is it true that your heirs will not get the 10 years to withdraw the balance and that TSP will simply cut them a check and likely stick them with the 37% tax rate if balance is over $300k?
This is the scenario I'm in now. I was my father's beneficiary. And now I am trying to see if the initial 20% withholding is the extent of the taxes I'll need to pay on it.
@@MagaSaver2024 20% is essentially a guesstimate or "placeholder" federal tax withholding. You may actually owe more than or less than 20%. Avoid that automatic 20% tax on *_cash_* withdrawal by rolling TSP to inherited IRA.
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.
NY Department of Taxation and Finance, Common questions and answers about pension subtraction adjustments:
CSRS: (Civil Service Retirement System) - if the federal employee was hired before January 1, 1984, income from their Thrift Savings Plan is considered supplemental for which the exclusion is subject to the age and amount limitation to the extent it is included in their FAGI, not to exceed $20,000.
FERS: (Federal Employee Retirement System) - if a federal employee was hired on or after January 1, 1984, income from their Thrift Savings Plan is fully excludable to the extent included in FAGI.
So to Mr Haws, TSP withdrawals for CSRS annuitants A are subject to taxation from the State of NY but up to $20,000 is tax exempt. Is that correct?
@@kenweiss6720 all I have is this. Not sure about CSRS. Please see:
1. www.tax.ny.gov/pdf/advisory_opinions/income/a17_1i.pdf
“We conclude that the lump sum distribution attributable to contributions made by Petitioner and his employer to his TSP account while he was a Federal employee will be exempt from New York State income tax if the amounts are included in Petitioner’s Federal adjusted gross income (FAGI).“
2. www.tax.ny.gov/pdf/advisory_opinions/income/a94_1i.pdf
“Herein, with respect to Issue "1", where an employee is covered by FERS, the distributions received by such individual from such employee's TSP account are considered part of such individual's pension and may be allowed as a deduction from Federal adjusted gross income, pursuant to section 612(c)(3) of the Tax Law, to the extent includible in gross income for Federal income tax purposes.”
3. www.tax.ny.gov/pdf/advisory_opinions/income/a15_6i.pdf
“We conclude that distributions that are attributable to contributions made by Petitioner and her employer to her TSP account while she was a Federal employee, including the accumulated earnings from those contributions, will be exempt from New York State income tax, if the amounts are included in Petitioner’s Federal adjusted gross income (FAGI).”
I’m finding mixed messages on this topic. Even from my nys tax accountant. Is it true? No nys tax on $$ taken from tsp if fees retired?
@Markmiller3210 I’m interested in what you have found out
Retired at 55 with 34 years of service under a VERA/VSIP in September 2022. I waited until January 1, 2023 then took it all out and used the rule of 55 to avoid an additional 10% penalty. Investing now and doing much better than TSP management.
I was surprised to hear about the less than 20% if they think it will last more than 10 years... had never heard that before.
Thank you for your informative videos! I started monthly automatic TSP withdrawals a few months ago and was surprised that they didn't take out any taxes. Now I'm finding I need to re-adjust my pension taxes in order to compensate (which is fine as far as I'm concerned). Last year when I took money out of the TSP (all at once) they took the 20%. I got a nice refund from the IRS but owed my state most of that. Watch out for those state taxes. Also, be aware that automatic monthly TSP withdrawals are always on the 15th of the month (or the Monday after if it's a weekend). I don't believe you can pick a different date for monthly withdrawals.
When is the TSP going to allow Roth conversion inside the TSP?
Ira conversation first
Great video. Very informative! Thanks for your time putting this valuable info out!
The 20% actually helps, because if you live in a state that also taxes your withdrawal (most of us do) of course over time this will be different for those who choose to be in the "ROTH"
This was really informative. During my withdrawal I noticed the 20% withholding was deducted from the TSP amount. During this tax season I'm curious if I need to pay taxes on this again after the fact?
That's a great question. When it comes to questions like this, it's hard to give a universal answer. The answer depends on your circumstances. The 20% withholding that you mentioned was the federal tax withholding, but the question still remains whether you owe more taxes. If you would like to have a one-on-one meeting with us to go over every detail, feel free to schedule an appointment with us:
hawsfederaladvisors.com/work-with-us/
Thank you. Your videos are very helpful.
If at retirement your money is in the G Fund (or whatever fund), can you choose Installment Payments and then subsequently, over years, move your money from one Fund to another? For example, if a person retires with everything in the G Fund, and then after retirement, can they move their money into the F Fund or into some other Fund? And, can they keep their money in the TSP until the day they or their spouse (beneficiary) die? Thank you for all the great and informative videos you put out!
Yes, to all your questions.
One more year. That is what I keep saying.
I hope you made it. I'm there now
@ , January 11th.
After 59½ it makes no sense to keep either traditional or roth tsp. The tsp is no longer the low cost option and the withdrawal options are terrible. Not to mention they made the website horrendous to use.
Hi what are some alternatives? I am leery of these financial advisors
Does NY state tax TSP withdrawals from CSRS federal employees? If yes, is there an exclusion if the withdrawal is under 20K in a year. Any references will be appreciated. Thanks!
HELP...Retired ten plus years, everything in G fund and getting RMDs every December, paying taxes twice on this withdrawal. Please, please give me suggestion on what I can do before I run out of my retirement money all together!! Thank you!
How are you paying taxes twice? At the end of the year your total income and total taxes for year are calculated. If you paid too little you owe
Also... Everything in the G fund is a mistake! The G fund does not even cover inflation (and that is not coming from me, that is coming from the TSP folks). So if everything is in the G fund then you are losing money to inflation.
Why in G...
@@makaiokalahama I truly don't know what to do! Put it in other areas under TSP?? Plus, so hard to trust anyone. SMH
@eMARie905 I know some say they put 60% in G fund, 40% in C fund.
Here's what I don't understand. If we take out a loan, and the repayment is not deferred like how our regular TSP deposits are, how come that loan repayment is not converted to a ROTH?
That is why a loan is not a good idea, repayment is taxed twice.
@@stephendove2850 Definitely feels that way. I'll write to the TSP and see what their response is.
So when it comes to annuities, my question is why are you buying an annuity?
So before you buy an annuity you should ask yourself why are you buying an annuity don’t cha think?
Annuities often comes with higher management fees compared to mutual funds and other investments. True, and these fees are higher for a lot of reasons that I won’t go into here.
So I won’t buy an annuity because, anything that requires me to give up control of my money, is never a good thing to do.
So an annuity is a type of contract between you and an insurance company, it’s a reverse insurance product, where you pay the insurance company, and then they pay you.
How does that make any sense? It doesn’t!
It should be noted, that there’s a lot of rules that you need to understand before signing on the doted line, because once you sign on the doted line, your decision is irrevocable, meaning, that you can’t change it.
So read, and understand what you’re doing before you do it, is my advice. Cheers 🥂
If I want an installment to start in September, how far out do I have to apply? Can I set a start date?
Great question. You might want to do it about a month in advance.
The government keeping 20% looks like an interest free loan to Uncle Sugar.
Does the 20% apply on Roth withdraws? Assuming you are over 59
So don’t quote me on this, but I believe Roth IRA withdrawals are all tax free, because you already paid the taxes on the front end, so there’s no withholding once you withdraw your money at retirement, and there’s no RMD’s either, ever, as it’s one of the advantages of the Roth IRA over the Traditional IRA. I personally don’t believe that it’s much of an advantage or benefit, but some do! Cheers 🥂
Can I withdraw money from my TSP if I’m still a federal employee and 56.5 years old? I have debt to pay off
Great question! We have several videos on that. Here is a great one:
th-cam.com/video/6ZVucZQNryA/w-d-xo.html&ab_channel=HawsFederalAdvisors
If I withdraw my money from it can I still co tribute to it after?
Great question. Here is a good video that can help:
th-cam.com/video/Yo8qU3PDLwo/w-d-xo.html&ab_channel=HawsFederalAdvisors
DONT touch your TSP. Sell a car or whatever, but dont drain your retirement savings losing out on that money, the taxes, early withdrawal fee's and whatever multiples would have been produced.
Thank you for sharing!
Is it true that your heirs will not get the 10 years to withdraw the balance and that TSP will simply cut them a check and likely stick them with the 37% tax rate if balance is over $300k?
This is the scenario I'm in now. I was my father's beneficiary. And now I am trying to see if the initial 20% withholding is the extent of the taxes I'll need to pay on it.
@@MagaSaver2024 20% is essentially a guesstimate or "placeholder" federal tax withholding. You may actually owe more than or less than 20%. Avoid that automatic 20% tax on *_cash_* withdrawal by rolling TSP to inherited IRA.
Thanks ❤
These tax brackets are BS. Should be 12% across the board. 12% of $1M is a whole lot more than 12% of $100K.