Q: Regarding the Jan. 26 posting on “Forced into choosing TSP withdrawal options,” your final comment states: “An alternative would be to roll over your TSP to a low-cost IRA and then withdraw money as you please.” How is that possible if he is already 70 1/2. I’ve understood that an IRA is not available to purchase if you are already 70 1/2. A: You may roll your TSP balance to an IRA at any age.
Monthly Archives: April, 2010
Q: I am 70 and intend to retire Dec. 31 with FERS civil service since July 2001. Can I keep the TSP funds in an account and continue to earn whatever the fund may provide while also making minimum withdrawals to satisfy IRS withdrawal rules (whatever they may be). A: Yes, you may.
Q: My divorce Judgment and Decree of 2004 awarded me porrata share of FERS employee annuity, Thrift Savings Plan and Former Spouse Survivor Annuity. I remarried before age 55. My former spouse and I were married 21 3/4 years. Will I be eligible for any of these benefits? A: You should consult an attorney for the answer.
Q: I am retiring soon at age 50 and at some time in the future may decide to take a full TSP withdrawal under the substantially equal payments based on IRS life expectancy. I understand that I will have to continue to receive these payments for five years, or until age 59 ½, whichever is longer. Should anything happen to me while receiving these payments, will my surviving spouse be able to stop the payments and do as she pleases with the remaining account balance? She is the sole beneficiary. A: Yes.
Q: I have a question regarding borrowing against TSP and would like your opinion on the scenario as to whether it would be worth borrowing against TSP. I am 52 and have eight years as a FERS employee and I intend to do 12 more years for a total of 20 years before I retire. Currently, I contribute approx $600/pay period into TSP which currently totals to approx $100,000. I have about $20,000 in loans. My questions is: would it be sensible to borrow $20,000 against my TSP to pay off the loans? Or should I leave my TSP alone?…
Q: I am an Army reservist who will be 55 in September and will retire Dec. 31 because of the requlation that military officers can only perfrom 28 years of service; assuming I do not get promoted to colonel. When do I have to start withdrawing funds from my TSP? A: Under current law, you will have to start taking withdrawals from your TSP the year after the year in which you reach age 70 1/2, or when you retire, whichever is later.
Q: How does one go about determining the most advantageous proportions of all five funds to achieve one’s expected level of return? And after knowing that secret, how does one know when is the right time to to adjust these proportions? A: I can tell you how I do it in my practice. I know of no better way to do it: We use long-term historical data and some practical knowledge to make assumptions about the expected rate of return, standard deviation of those returns and correlation coefficients for each of the asset types underlying the asset types you’ll be…
Q: Can you comment on Thrift Savings Plan Pilot? I am five years from retirement and took a big hit from the last dip in the market. I need to maximize my TSP; how am I to know what the proper percentages are to allocate to the five funds? A: I don’t believe that market timing services are a reliable way to manage a portfolio for retirement income. Like anything else, your assets should be managed to acheive your goals, not to beat this or that arbitrary benchmark. Asking how to determine the proper asset allocation to support your goals…
Q: I am a Federal Employees Retirement System employee with the Postal Service who plans to retire at the age of 60 with 27.5 years of service. I plan to take monthly withdrawals from my Thrift Savings Plan account to apply to my mortgage for ten years until I am 70 1/2 years old, rather than paying off my mortgage when I retire. My mortgage is a 30-year fixed at 4.75 percent. By leaving my money in the TSP and earning an estimated 8 percent while taking monthly withdrawals to make my mortgage payments, won’t I be ahead money at…
Q: I’m trying to procure a Thrift Savings Plan residential loan, with a general purpose loan outstanding. I’ve read the TSP loan book and made a copy of the pertinent pages, spoken to the TSP folks on several occasions and perused the IRS Web site. Do you know someone I can talk to who might provide me a definitive answer to my questions? At this point, I have a house purchase contract in my hands, and have been told that the amount available for a residential loan is far lower than I anticipated. A: The limits on TSP loans are…