Monthly Archives: May, 2010

Take a lesson from the gulf oil spill: Manage risk wisely


Watching the news about the Gulf of Mexico oil spill, I am struck by the similarities between drilling for oil and trying to extract wealth from an investment portfolio. After wondering — and worrying — about the impact of the spill on life and livelihood, my question was: How could this well have been drilled without a reliable plan to stop the flow of oil in the event of a problem?” I realized that most investors — Thrift Savings Plan investors included — make the same mistake with their portfolios every day: They take risks that they don’t understand, or…

Reaching 59 1/2


Q: My birthday is Dec. 27. I will be 60 this year. How do I calculate when I am exactly 59 1/2 years old? A: Adding 6 months to your birthday will work. You’ll be 59 1/2 on June 27, 2010.

TSP withdrawals, taxes and loans


Q: I turned 55 this year and just applied for disability retirement under the Federal Employees Retirement System. I have large bills I want to pay off. My income will drop the first year, then will decrease $1,000 the following year before continuing at that rate. I realize if I keep my Thrift Savings Plan or roll it over once I leave service, I will not be able too take a loan on it. I realize I will need to pay my fair share of taxes, but is there a way I can work it out that I can take…

Vested TSP and breaks in service


Q: I am a Senior Executive Service employee with two years of active federal civilian service and 34 years of prior active military service. I have been discussing a possible opportunity wherein I would leave the federal government for a year or so and work as a contractor. I would then hope to compete for another SES position with a different agency and return to active federal civilian service. Because I have only two years of active federal civilian service, will I lose the agency matching contributions I have received in my Thrift Savings Plan account to date if I…

G Fund percentages


Q: I read your May 3 piece regarding the G Fund. You said it should represent 10 percent or less of an investor’s Thrift Savings Plan assets. Maybe I’m not understanding correctly, because the suggested G Fund distribution in the L Funds has 32 percent in the L 2020, 64 percent in the L 2010 and 74 percent in the L Income. My opinion is that these are very high percentages, but I also think your 10 percent is rather low. I’m not currently in the L Funds and probably won’t be. I plan to retire in 2014 so I…

Finding out TSP basics


Q: I’m working for the federal government and plan on retiring there. I wanted to get some information on the Thrift Savings Plan. I have about 10 percent going to the G Fund and was wondering whether you recommend it or whether I should move my money into another fund. A: Unfortuantely, I can’t provide you with specific investment advice because I don’t know nearly enough about you, your goals and your circumstances. You can learn more about the TSP by visiting the TSP website.

Switching TSP funds


Q: I am an active-duty soldier participating in the Thrift Savings Plan. I do not get a matching contribution. My money is invested in the S and I Funds, and this week I have lost $4,000. My investment had been exclusively in the G Fund, and my account was slowly growing. When I switched money in February from the G Fund to the I Fund, I began to make more money. I want to switch back to the G Fund for stability but am afraid that since the share prices are lower, the value of my account will drop because…

Early retirement and TSP


Q: I made a deposit to the Federal Employees Retirement System for 20 years of military service and have been working for the federal government for 10 years, which gives me 30 years of federal service. If I was to resign today, at age 50, would I continue to keep my military retirement pay until I reached my minimum retirement age (56) and could start drawing my FERS retirement? Will the FERS retirement consist of 10 years of Social Security Supplement, FERS and my Thrift Savings Plan payout, or would I have to wait on the TSP? A: Because you…

One-time withdrawals


Q: How much money can you take out for your one-time withdrawal without tax penalties? I am retiring under 6c, federal law enforcement retirement, at age 50. A: Unless you meet one of the special exceptions to the early withdrawal penalty, the amount will depend upon your life expectancy and the calculation method you choose. This excerpt from my July 23, 2007, Money Matters column should help: “Another exception to the early withdrawal penalty — one that is available to anyone — is to take distributions before reaching age 59 1/2 as a series of so-called substantially equal periodic payments…

Did the G Fund lose value?


Q: I noticed that today (May 6), the G Fund lost value ($0.01 per share). I don’t understand how this can be. I would greatly appreciate an explanation. A: The price you cited in your question was incorrect. The G Fund’s closing price on May 6 was $13.2680 per share, and on May 5 it was $13.2669. Recent share prices for the G Fund and for other Thrift Savings Plan investments can be found at

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