Q. A rumor is going around at work telling everyone to get their money out of the G Fund because the government is going to borrow from it and won’t be able to repay. They said that it almost happened once in the 90s and could happen again real soon, so people should avoid G altogether because, although it has the least risk, it’s not safe from the government getting to it. Sounds like another vicious rumor; what do you think? A. I agree — an unfounded rumor.
Monthly Archives: August, 2010
Q: Can a TSP annuity be purchased at any age upon separation from service? A: Yes.
Q: I will be 59 in October 2010. I retired about four years ago under the old CSRS system and contributed to the TSP while I was employed as a federal civil servant with the Navy. What is the earliest age I can withdraw from the TSP without penalty? I see information on being required to withdraw by the age of 70 1/2 but nothing on the earliest age to withdraw. A: If you separated from federal service during or after the calendar year in which you reached age 55, you may withdraw your money now without penalty. Otherwise, you’ll…
Q: You say, “If you are still employed, you will not be required to begin distributions from your TSP account until you retire.” Does that mean that contributions to the TSP can continue indefinitely after age 70 1/2 as long as you are working? A: Yes.
Q: How do we get a copy of your firm’s calculator versus the one TSP provides? It would be great to have a look at this to see where we would stand. A: It’s not from a calculator, it’s the result of my firm’s proprietary probability analysis.
As a Thrift Savings Plan participant, you have a vested interest in your account’s ability to produce a reliable stream of income that will support your lifestyle in retirement. Unfortunately, TSP doesn’t guarantee a stream of income in exchange for your contributions. What many TSP investors seek is a way to predict how much they can expect to receive in retirement for each dollar they invest today. Unfortunately, this value is impossible to accurately predict. The best you can do is to try to estimate it — which is, it turns out, a difficult task. The problem is there are a…
Q: I am a firefighter about to be forced to retire at 57 years old because of the mandatory retirement age. I plan on taking out my Thrift Savings Plan earnings to buy my house when I retire. Do I still have to pay the 10 percent penalty for withdrawing from my TSP before turning 59 1/2 even though I was forced to retire because of my age? A: Because you are retiring during or after the year in which you reach age 55, your subsequent TSP withdrawals will not be subject to the early withdrawal penalty.
Q: I plan on withdrawing money from my Thrift Savings Plan account for a residential loan. Can I continue my contributions and receive matching funds during the repayment period? Also, is it required that repayment is done through payroll deduction? As I intend to pay back the loan in 20 months from my wife’s income, I prefer to pay directly by check each month. A: You may continue to contribute and receive matching contributions while repaying your loan. Your loan must be repaid through payroll deduction.
Q: I am currently on military leave without pay from the U.S. Postal Service and have been on active duty with the Air Force for about 12 months. When I was with the USPS, I was contributing 5 percent to the Thrift Savings Plan and receiving the available agency matching funds. During my period of active duty, I have been contributing 10 percent to the TSP with no matching funds. What are the rules or regulations with regards to agency matching funds upon my return to the USPS? Specifically, would I be eligible for any agency matching contributions during the…
Q: I am 57 years old and plan to retire in two years. I have basic Federal Employees Group Life Insurance plus two times optional coverage. My total annual premium is nearly $1,900 for roughly $400,000 of insurance. Equivalent coverage in the open market is considerably cheaper. Is there any advantage to retaining my FEGLI coverage as I approach retirement? A: The major benefit, assuming that you are insurable at more attractive rates on the retail market, is that if you retire with basic FEGLI coverage, you can, once you reach age 65, retain 25 percent of that coverage, at…