Q: I have an IRA from a previous employer that is not performing too well. The Thrift Savings Plan seems to be rebounding rather nicely over the past several months. Should I move the IRA into the TSP? Can this be done without any penalties? A: The TSP is a better investment environment than any retail IRA account I have ever seen, and I generally recommend that eligible investors move their IRA money into the TSP whenever possible. You are eligible if your IRA account contains no after-tax money — money from non-deductible contributions. Check with your IRA custodian to…
Yearly Archives: 2009
Q: If after I retire, I want to combine my Thrift Savings Plan and a 401(k) that I have, can I do this? Even if I create a 401(k) after I retire and then, several year later, want to combine these? Can I pull the 401(k) into TSP? A: Yes, yes and yes. — Mike Miles
Q: Could you elaborate on a couple of statements you made in your “Mistakes to Avoid” column that appeared in the July 13 issue of Federal Times? At mistake No. 2, “not having enough insurance,” you said “Once you are retired, long-term care insurance is a prudent thing to consider.” Many feds signed up for the federal long-term care insurance program when it first became available years ago. Are you saying that most of us workers don’t need to get long-term care coverage until we’re actually retired? You stated “Many people follow this rule of thumb: ‘It’s generally safe to…
Q: I plan to retire in early 2010 and I am thinking about getting long-term care before leaving. With the government plan going up significantly, do you advice looking at private plan? I understand, John Hancock offers both. A: I always recommend that you compare your employer’s benefits to the retail or other options you may have available. When it comes to long-term care insurance, there are potential advantages of an individual policy over the FLTCIP, depending upon your circumstances. — Mike Miles
Q: I am thinking about dropping my long-term care, or if I keep any, going to a company not associated with the Office of Personnel Management and the government plan. I feel they were not truthful and are in breach of contract with the raise in the premium. I paid the higher premium with the understanding that I would never have an increase. If they were not truthful with this, then I do not trust them for anything in the future; including any benefits when/if I try to collect them. Is it better to keep my current long-term care until…
Q: I expect to retire around the middle of 2010 at 65. I will be using my Thrift Savings Plan savings to supplement my Social Security and my Federal Employees Retirement System pension. I understand that I may leave my money in TSP and take monthly withdrawals from the TSP starting in January. I also believe there is a one time withdrawal that I may make to tide me over between July 2010 until January 2011 when the monthly withdrawals start to kick in. I want to confirm that I may do so without jeopardizing my receipt of monthly withdrawals…
Q: When I retire as a Federal Employees Retirement System employee, what are the options I have in regard to my Thrift Savings Plan account? I am 70 years old and may work for 2-3 more years. A: After you retire, you may maintain your TSP account for as long as you live and continue managing it, as usual, or you may withdraw all or part of your funds and roll over all or part of those distributions to an IRA, as long as the withdrawn funds are not part of a Required Minimum Distribution. — Mike Miles
Q: I have been a rehired annuitant for the past year and have been told that, as such, I cannot contribute to the Thrift Savings Plan. Is that true? A: It’s true. — Mike Miles
Q: I am planning to retire with 23 years of service, under the Federal Employees Retirement System. I heard from an unofficial source that a retiree can outlive his retirement under the Federal Employees Retirement System. I was of the understanding that the retirement was for life — is that not correct? Also, I have seen the response to a couple of questions in regard to rolling over Thrift Savings Plan money to outside funds. The answer has been that you “cannot move TSP money until one separates from federal service.” I am a little confused by that answer, as…
Q: If someone is not qualified to obtain long-term care insurance, short of saving hundreds of thousands of dollars, are there any options to relieve the financial burden? A: Medicaid is the payor of last resort. — Mike Miles