1st time home loan

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L1: 1st time home loan Hello,
First post to this site. I just turned 50 and I am about to purchase my first home, while the markets are good. I am not at all knowledgeable if I can take a % of my TSP total andtransfer that to an IRA? Then withdrawal from that? I’m very unsure?2011-04-20 15:44, By: dannyboy, IP: []

L2: 1st time home loanIf you are still working for the govt, you probably do not qualify for a distribution from the plan other than a hardship distribution or perhaps a plan loan.
If you no longer work for the govt, then you can roll over all or part of the TSP balance to an IRA, and then take an IRA distribution that will be penalty free up to 10,000 if you meet all the first home requirements. This penalty waiver does NOT apply to distributions directly from the TSP.
The first question is whether you are still employed by the govt or have separated from service……….2011-04-20 21:46, By: Alan S., IP: []

L2: 1st time home loan
Hello, Danny, and welcome to the 72t web site.
There is a lot of info here on how to set up a 72t plan, which is also called a Substantially Equal Payment Plan or SEPP. The purpose of this kind of plan is to take the 72t exemption from the 10% penalty on IRA distributions taken prior to age 59.5. The plan must run for the longer of you reaching age 59.5 or 5 years. You cannot make any changes to the amount distributed once you start if the plan is to remain valid. You also cannot take money from or add money to the IRA or IRAs that fund your 72t plan other than the exactly calculated distributions. You can take these distributions monthly, quarterly, semi-annually, or annually and you can change the distribution schedule, such as from quarterly to monthly, if you desire. Just be sure that your annual distribution is the same.
If you are new to this type of plan, then the best thing I can recommend is that you purchase the book that is for sale on this web site that fully details this info. That will save you a lot of time in looking up and putting it all together in an understandable and useful form. The calculators here are also excellent and you can do some really good planning with them.
If it seems right for you and as you prepare for and then go into a 72t plan, be sure to keep every scrap of paper that has anything to do with your 72t plan. This should include things like IRA statements, correspondence, initial starting balance of your plan, your calculations per one of the 3 IRS approved distribution calculation methods, etc. Don’t be afraid to include everything connected with your plan, as problems are more likely to be caused by a lack of information than having too much of it. Organize it in a 3″ 3-ring binder, using those construction paper sheets with the colored tabs. This will not take up a lot of room but it will be very useful in case you ever get an IRS inquiry about your plan. I would start this with a type-written letter of intent… basically a document that you date and sign that tells what you are trying to do and how you are doing it. This is like a “to whom it may concern” letter but you don’t send it to anyone; you just keep it with your records. Include a printout of your IRA web site that shows the balance on a date 1-2 months prior to your 1st distribution. You can also use the 12/31 date value of the prior year if you are starting shortly thereafter.
Feel free to come here and ask any questions for which you need answers. There are some real experts here plus a lot of folks who have been through the 72t process. Between them, they can answer many questions. A large number of these have already been asked and answered, so use the old messages to search for items of interest to you.
Best of luck to you as you check out whether or not a 72t plan is for you.
2011-04-21 17:29, By: Ed_B, IP: []

L3: 1st time home loanIf you also have an IRA already, you could take the $ 10,000 from there, and avoid the complexities of dealing with a SEPP 72-T.2011-04-21 17:36, By: dlzallestaxes, IP: []