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Federal Thrift Savings Plan monthly withdrawal

denlow
denlow Member ✭✭
edited November 2018 in Investing (Windows)
I am using Quicken 2017 and have been tracking my Federal Thrift Savings Plan (TSP) as a 401k. I am a separated (retired) federal employee and just set up a full withdrawal as monthly transfers into a local savings account. How can I keep track of this in Quicken? When I go to transactions I see the most likely drop down choice for the transfer is "transferred cash out" (Xout); however that does not seem to subtract the monthly transfer amount from my total "market Value". Can someone help me to figure this out? Thanks so much!

Comments

  • UKR
    UKR SuperUser ✭✭✭✭✭
    edited October 2018
    "Cash transferred out of account" is the correct transaction to use.
    However, if the cash that was put into your TSP account was invested in some kind of security, you also need to sell an appropriate amount of shares of this security to make the cash available for transfer.
    • Sell $1000.00 of security
    • Transfer $1000.00 cash to your checking account

  • denlow
    denlow Member ✭✭
    edited November 2018
    Update: I believe what I need to do is to transfer the current full amount of my "Securities Value" into the "Cash Balance" so that the "Total Market Value" will correctly reflect the balance after each monthly withdrawal. Thanks again for any help.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    Is the TSP account showing a cash balance in the rightmost "Cash Bal" column, and does the XOut make that number go down?

    Normally in an investment account you would hold some securities and there may or may not be an ongoing cash balance. Unless there is cash in the account, you would have to sell something to cover the withdrawal.
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  • denlow
    denlow Member ✭✭
    edited August 2018
    UKR said:

    "Cash transferred out of account" is the correct transaction to use.
    However, if the cash that was put into your TSP account was invested in some kind of security, you also need to sell an appropriate amount of shares of this security to make the cash available for transfer.

    • Sell $1000.00 of security
    • Transfer $1000.00 cash to your checking account

    Thanks UKR
    If I understand correctly then I will have to "sell" all of my holdings in the TSP (i.e. G Fund, C Fund, L Income Fund, etc.) in order to convert their value into the cash balance? Is that correct? Even though each of those funds maintain their balance, minus the monthly withdrawal, and continue to earn income?
  • denlow
    denlow Member ✭✭
    edited November 2018
    Jim
    No my cash balance column is showing a minus amount, equal to the recent monthly withdrawal. In the TSP they consider it a "full withdrawal" when you begin monthly payments; however the balance remains in each of the individual funds and continues to gain  (or lose) value due to the gains or losses of the funds until the entire account balance is disbursed.
  • UKR
    UKR SuperUser ✭✭✭✭✭
    edited August 2018
    UKR said:

    "Cash transferred out of account" is the correct transaction to use.
    However, if the cash that was put into your TSP account was invested in some kind of security, you also need to sell an appropriate amount of shares of this security to make the cash available for transfer.

    • Sell $1000.00 of security
    • Transfer $1000.00 cash to your checking account

    OK, guys.
    Somebody who actually has a TSP account needs to chime in here. Or you need to talk to TSP support and ask.
    I don't know how they are handling your monthly withdrawals and how much of each fund is liquidated to make the cash available for your monthly withdrawal.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited August 2018
    denlow said:

    Update: I believe what I need to do is to transfer the current full amount of my "Securities Value" into the "Cash Balance" so that the "Total Market Value" will correctly reflect the balance after each monthly withdrawal. Thanks again for any help.

    No No No -

    All you have to do is sell enough shares of whatever securitie(s) were sold in the TSP to cover your cash withdrawal. It may sell a little of everything you hold "pro rata" i.e in proportion to how much you have of each, or maybe you can set it up to sell only the needed amount of one security and keep all the rest. 

    You can record the cash withdrawal in Quicken even if it makes your cash balance go negative, then after it has been processed, you should be able to go to the TSP account online and see what happened.
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  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited August 2018
    UKR said:

    "Cash transferred out of account" is the correct transaction to use.
    However, if the cash that was put into your TSP account was invested in some kind of security, you also need to sell an appropriate amount of shares of this security to make the cash available for transfer.

    • Sell $1000.00 of security
    • Transfer $1000.00 cash to your checking account

    each of those funds maintain their balance, minus the monthly withdrawal
    I.E., the balance is reduced ... by the amount of the sold funds.

    There's really only 2 choices here:
    • The number of shares of the particular fund are reduced, or
    • The shares are producing a cash dividend of some sort.
    These TSP funds really work exactly the same as any other Mutual fund ... so you can't produce cash in the account without one of those 2 statements (maybe, both) being true.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited August 2018
    denlow said:

    Jim
    No my cash balance column is showing a minus amount, equal to the recent monthly withdrawal. In the TSP they consider it a "full withdrawal" when you begin monthly payments; however the balance remains in each of the individual funds and continues to gain  (or lose) value due to the gains or losses of the funds until the entire account balance is disbursed.

    Well the cash to cover the withdrawal has to come from somewhere, and usually that means selling a few shares of one or more of your securities.

    As UKR says, maybe someone who actually has a TSP account can chime in.
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  • denlow
    denlow Member ✭✭
    edited August 2018
    denlow said:

    Update: I believe what I need to do is to transfer the current full amount of my "Securities Value" into the "Cash Balance" so that the "Total Market Value" will correctly reflect the balance after each monthly withdrawal. Thanks again for any help.

    Thanks, Jim
    That sounds like a plan. I will let the cash balance remain negative until I receive the monthly statement from TSP to figure out how they divide up the withdrawal from each of the funds. Then perhaps, I can figure out how to automate the monthly transfer transactions.
  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    edited November 2018
    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    I see all the withdrawal options are outlined here
    https://www.tsp.gov/PDF/formspubs/tspbk02.pdf

    Have you chosen a monthly withdrawal and not an annuity?
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  • denlow
    denlow Member ✭✭
    edited August 2018
    UKR said:

    "Cash transferred out of account" is the correct transaction to use.
    However, if the cash that was put into your TSP account was invested in some kind of security, you also need to sell an appropriate amount of shares of this security to make the cash available for transfer.

    • Sell $1000.00 of security
    • Transfer $1000.00 cash to your checking account

    As you can all probably tell, I am a complete novice when it comes to investments like this. I don't believe there is any such thing as "cash dividends" in the TSP, but the monthly and quarterly statements reflect share balances, share prices, and the only thing I really track...the fund balances in $. I have been tracking for years now by entering the cash amounts shown on my statements as "Adjust Share Balance" transactions in Quicken. I enter the cash balance of each fund as "shares" and the Market Value then equals the total balance. I may have been doing this all wrong, but it has worked to give me an accurate total in Quicken, that is until beginning the monthly withdrawals.
    Thanks to all for weighing in.
  • denlow
    denlow Member ✭✭
    edited August 2018

    I see all the withdrawal options are outlined here
    https://www.tsp.gov/PDF/formspubs/tspbk02.pdf

    Have you chosen a monthly withdrawal and not an annuity?

    Yes Jim, a monthly withdrawal. I did not purchase an annuity.
  • denlow
    denlow Member ✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    I asked TSP to withhold at the married with 0 exemptions rate. I see the full monthly amount (apparently $0 state or fed tax withheld) arrived as direct deposit into my savings account.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited August 2018
    UKR said:

    "Cash transferred out of account" is the correct transaction to use.
    However, if the cash that was put into your TSP account was invested in some kind of security, you also need to sell an appropriate amount of shares of this security to make the cash available for transfer.

    • Sell $1000.00 of security
    • Transfer $1000.00 cash to your checking account

    My ex-wife was a Federal employee, so I worked with her TSP accounts.  The way that you've set things up is sub-optimal ... but if it works for you GO With it.

    As I mentioned, TSP funds are really just Mutual Funds ... and Quicken Help has info about tracking mutual funds.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    ?? Sounds like they should be taking taxes out. Better check with them. You don’t want to come up short on your tax return. Or maybe what you think is the full amount is really just the Net amount after taxes.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    When I withdraw from the mutual funds in one of my IRA accounts, the following happens.
    1. The account has it's Tax Schedule set to that withdrawals are categorized as "Form 1099-R, Gross Distribution"
    2. I sell an amount of funds in the account and instruct Fidelity to withhold an amount (I can select either a percentage or a fixed dollar amount)
    3. I record, in Q, the Sale of the mutual fund shares equal to what Fidelity records as the sold number
    4. I transfer the GROSS sale amount to my checking account
    5. In the checking account, I split the transaction and show the Gross amount as coming from the IRA and then I add a split line with a Negative dollar amount to reflect the amount of tax withholdings.  The Category for this added line is my "Fed Taxes:Withheld" category.
    6. I adjust the amount actually received in my checking account.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • denlow
    denlow Member ✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    I assume that the small amount of increased annual income derived from this small monthly withdrawal does not increase our tax burden, hence no tax was withheld. We do have "extra" withholdings taken from my regular pension income.
  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    Ok, sounds like you have it covered.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    OK, so once the withdrawals have started, hopefully you will see something like

    Starting balances 8/31

    x shares of Fund A @ $y/share Total $Z
    U                Fund B @ $V         Total $W

    etc

    9/xx Sold X-M shares of fund A    Total $J
            Sold U-Q                 fund B   Total $K
    Withdrawn $1,000


    Ending balance 9/30

    M              Fund A       $N/share  Total $ P
    Q              Fund B       $R            Ttoal $ S

    Unfortunately there is no online connection to TSP for Quicken so you have to do a little arithmetic and enter the Sell and Withdraw transactions manually.

    When entering the Sells, it is best to enter the number of shares and the total received and let Quicken calculate the price per share, to reduce the possibility of rounding errors.

    To get started, you may have to adjust the share balances and the prices per share to match your statement


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  • denlow
    denlow Member ✭✭
    edited August 2018
    Jim,
    Really appreciate the help! My statement should be available on the next business day following the holiday and I will try your suggestions. Here is an edited screenshot of my Quicken TSP screen.
    dale

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    I asked TSP to withhold at the married with 0 exemptions rate.
    hence no tax was withheld.
    These 2 statements seem to contradict each other.  Perhaps the amount withdrawn is so small that the 0% tax rate applies to it.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • denlow
    denlow Member ✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    I believe that to be the case...amount is so small that it would not materially increase our adjusted gross income.
  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    It may be too small to take out withholding but it will increase your AGI and may increase the taxable amount of any Social Security you or your spouse gets. It can affect a lot of things on your tax return.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    So you probably have years of these Placeholder entries. The dollar amount of each fund you hold is correct but the share prices and numbers of shares do not match your statement. When you get your next statement you will want to Add or remove shares of each fund to make the share balances match the starting balance and edit the price history of each fund as of the starting date (8/1 probably) so that the total value (shares x price per share) is correct as of that date. 

    Then enter the Sells as described above.



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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited August 2018
    volvogirl said:

    Nobody has addressed any tax withholding . Do they take out taxes? Once you get the total gross amount transferred to the savings account then make a new transaction or two in the savings acct to account for the federal and state withholding.

    I think also in the year you turn 70 1/2, if the withdrawal amount you have chosen is less than your RMD, it will be adjusted to match the RMD amount.
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  • denlow
    denlow Member ✭✭
    edited August 2018
    Jim
    Thank You...Thank You! That is exactly what I was looking for to help me get this "back on track". And, Yes, I understand that after turning 70 and 1/2  they will increase the final monthly payment of each year to meet the minimum required distribution. Again, you have been the greatest help. I will try to clean up my Quicken mess as of 08/01/18 and then hopefully go forward from there.
    dale
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