Page 93 - The Informed Fed--Hearn Wealth Management

If the estate is larger than that, the Roth IRA will be taxable to
beneficiaries (other than surviving spouses). Non-spouse beneficiaries

are not allowed to make additional contributions to the inherited Roth
IRA or combine it with their own Roth IRA. In addition, the beneficiary
may elect to choose from one of two methods of distribution. The first

option is to receive the entire distribution by December 31 of the fifth
th. The second option is

to receive portions of the IRA as distributions over the life of the
beneficiary, terminating upon the death of the beneficiary and passing
on to a secondary beneficiary. This lifetime distribution also known as a

-Spousal Beneficiary
also

to withdraw an inherited retirement account within 10 years of the date
the original owner dies. For income tax purposes, distributions from
Roth IRAs to beneficiaries are not taxable if the Roth IRA was

established for at least five years before the distribution occurs.
The TSP began accepting Roth TSP contributions on May 7, 2012.

Note that some participants have the ability to make Roth (after-tax)
contributions to their TSP accounts. These contributions have to be held
in a balance separate from traditional TSP contributions. This is because

traditional and Roth contributions have different tax treatments and the
two types of contributions and their gains (or losses) have to be

accounted for separately.

Greg Long, the executive director of the Federal Retirement Thrift
Investment Board, says the one thing he wants all federal employee

because they are different in two very important ways.

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