Roth IRAs, Retirement, and Law Enforcement

[badgerland]

Looking for some help with a question I have about Roth IRA in the TSP. I'm 28 and for the past 3 years I've been putting a small portion of my pay to the Roth IRA (a larger portion goes to the traditional portion). In those 3 years, I've accumulated about $12000 just in my Roth account according to the website. Recently I've been reading that since I am a LEO, the Roth option isn't so good, because I'll be able to retire at 47 - but not be able to touch the Roth portion until I'm 59 1/2 without penalty. So, I've gone into MYEPP and switched my contributions fully back to the traditional IRA portion of the TSP.

Now, what happens to that $12000? Say I want to start getting payments from my TSP at age 55 - does that $12000 stay there? Am I taxed 10% ($1200) at that point? More - since obviously that $12000 will grow in the next 20 years?

HELP!!!! I didn't realize!!! hahaha

Also, for those of you following NCAA basketball...FINAL FOUR - HERE COMES THE BADGERS!

 

[badgerland]

bump

 

[Maricar19]

Unfortunately, your tsp withdrawals are subject to proportionate distribution..meaning each of your funds will be withdrawn from proportionately..

Tsptalkers, please chime in if I am wrong,but I believe that you will be penalized for your Roth distribution if you are under 59 1/2...

 

[badgerland]

That makes sense that I'd be penalized for my ROTH distribution - but does that mean the ROTH that I initially paid into or the ROTH that grew over time? Like would it be $1200 (10% of the $12000 I've put in) or way more cuz that $$ will grow?

So confused!

 

[Shamus13]

I'm a LEO and am contributing 100% into ROTH TSP & my agency is matching into Traditional TSP. I freaked out when I saw the 59 1/2 age requirement. On top at retirement TSP distributes equally from Traditional and ROTH. Check out this thread I started it will help you in the right direction.( http://www.tsptalk.com/mb/retirement-ira-talk/21718-roth-tsp-10%-penalty-question.html )

There are retired LEOs here that can give additional information but how I understand it if you need to access your TSP before 59 1/2 you can without penalty if you are designated LEO or Firefighter it just takes paperwork... like everything else w/ the Gov't.

 

[Bullitt]

You can now decide whether to withdraw from TSP or Roth TSP. Previously it drew from both accounts proportionately and was really a dumb rule.

Access to Roth TSP account can be at any age but that would be contributions only (no penalty). A 10% penalty would be added on top of any taxes on capital gains before 59.5.

badgerland, you should just let the Roth TSP ride until you need to take the money which is hopefully not until you're well past the 59.5 age.