where to move my ira

You are here:
< Back

L1: where to move my ira
I just retired from the government. Their version of a 401k is called the thrift savings plan(tsp).I called today to make arrangements for withdrawals using my 72(t) plan.They informed me that they do not make annual withdrawals, whichI prefer, only
monthly withdrawals.I will need to transfer my money to another IRA venue. My question is, does anyone know of a company that actually codes your withdrawals as tax exempt if you submit the proper 72(t) paperwork to avoid IRS complications? Is that even possible?
2011-10-11 18:02, By: atcdave, IP: []

L2: where to move my ira
No company codes the 1099 as tax exempt.
Some companies, but not many, use a code of ‘2’ on the 1099 to indicate that you are using an exemption to the 10% penalty. I certainly wouldn’t pick a company merely because they will use a code of ‘2’ – that could change tomorrow. A code of ‘2’ doesn’t
guarantee anything.IRS Form 5329 is easy to complete.
Make sure that you check our Planning Pointers at http://72t.net/72t/Planning/Pointers- especially the last one titledMost Important- It is your responsibility.
2011-10-11 20:26, By: Gfw, IP: []

L3: where to move my ira
You are much better off using an IRA for your 72t plan because the TSP does not support such plans with the little flexibility you might need. The withdrawal options are just element of that.
Last I knew, Chas. Schwab provided the exception code on Form 1099R, and very few others do. But as gfw indicated, this is not a good reason to select a custodian. However, Schwab might fit your needs for the other more important
issues as well.
Be sure to order a “direct rollover” from the TSP. That will avoid withholding on your distribution.

2011-10-11 20:54, By: Alan S., IP: []

L4: where to move my ira
We usually warn you against annual withdrawals because it places a tremendous pressure on you to budget very carefully for the full year so as not to overspend youir available resources.
If you are comfortable with your tsp investment options, I suggest that you reconsider your aversion to monthly withdrawals. As indicated in a recent posting thread, a full year withdrawal late in the year, followed by a full year withdrawal early the next
year can have significant adverse long-term effects if you have a down market at that time.
2011-10-11 21:26, By: dlzallestaxes, IP: []

L5: where to move my ira
Dlz… as I recall there are other issues related to TSP withdrawals.
Jim F. is more familiar with TSPs than I am, but in addition to only monthly withdrawals, they also only allow one change per year making error correction pretty much impossible. There is also mandatory 20% withholding. I also believe that they will only
allow monthly amounts rounded to the nearest dollar which * 12 may be more or less than the calculated annual distribution amount.
2011-10-11 21:40, By: Gfw, IP: []

L2: 72t
If Vanguard doesn’t withhold automatically and I elect to take a lump sum next year are you saying I could then pay quarterly estimates or would I have to take quarterly distributions to take quarterly estimates [I understand the risk of the money ‘disappearing’
and facing a tax penalty]?
2011-10-12 12:29, By: Rory, IP: []

L3: 72t
Regardless of how you take SEPP distributions (annual, quarterly,monthly, etc.) income tax estimates are filed quarterly.
2011-10-12 12:36, By: Gfw, IP: []

L4: 72t
You only have to file estimates for income taxes that will not be covered by withholdings, or prior year overpayments carried forward.
The IRS gives you immediate credit for the withholdings by Vanguard, or other custodian, as soon as they are remitted by them to IRS.
If your withholdings approximate what would be due as estimates, then no estimated forms or payments might be required.
Therefore, you, or your tax professional, must do applicable projections of your tax situation each year.
2011-10-12 13:49, By: dlzallestaxes, IP: []