Monthly Archives: October, 2010

TSP withdrawal will be in fixed payments

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Q: Let’s see if I’ve got this right. If I request monthly withdrawals from my Thrift Savings Plan account and change the amount each year, I’ll be able to receive a monthly check for life and still be able to build my principal, which I can pass on to my children or grandchildren. Does TSP have such a plan as this? What option is it and how does it work? If I need some emergency money, would I be able to make a withdrawal from my principal? A: You may request a full withdrawal as fixed monthly payments. You set…

Benefits stand on their own

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Q: Will I get full Social Security and a full Federal Employees Retirement System annuity when I retire at 66? And when I invest my Thrift Savings Plan, will that affect how much I receive from Social Security? A: I can’t say whether you’ll get a “full” FERS annuity, but none of these benefits, on their own, will affect the others.

Converting IRAs tax free?

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Q: This is regarding the following question and answer — Q. If I have a traditional IRA worth $100,000 with a basis (post-tax contributions) of $20,000; can I roll over $80,000 to the Thrift Savings Plan and the other convert the other $20,000 to a Roth? Would these two actions result in a tax-free transaction? A. Yes, a special rule allows for this to be done. — is this your final answer? Please tell us what the special rule is. And if this is the final answer, can a retiree do this? I would contribute my pre-tax earnings in my…

IRA rule doesn't apply to TSP

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Q: My husband and I want to convert all or a portion of our traditional IRAs to Roth IRAs in 2010. Our contributions have been nondeductible and our IRA accounts are about double the investments we have made (value versus basis). So, we will be paying tax on the earnings.  Then I thought about our Thrift Savings Plan accounts. Are these considered IRAs for the purposes of this conversion opportunity? I read that the IRS will consider all IRAs; you can’t pick and choose among or within our IRA regarding the conversion, but I certainly would not want to have…

Federal long-term care plan should be top option

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The Federal Long-Term Care Insurance Program increased premiums for its automatic compound inflation option as much as 25 percent last year, a move that angered many participants. But, in my view, the program just became more attractive, compared with retail alternatives, and should be considered the benchmark when comparing long-term care insurance. That’s because John Hancock has announced that it will seek rate increases that average about 40 percent on many of its retail long-term care policies. That’s a surprising number since John Hancock’s policies were never widely known for being relatively cheap. In fact, years ago, I identified John Hancock…

TSP annuity vs. monthly payments

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Q: Is it possible to set up monthly payments from your Thrift Savings Plan account and then later have the TSP use part of your funds to purchase an annuity while continuing those payments? Or must both withdrawals be set up at the same time? A: It is not possible to take a partial withdrawal for a TSP annuity while continuing monthly payments.

TSP annuity process

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Q: I will be retiring, hopefully, at age 56. I have been investing in the Thrift Savings Plan since 1987, contributing the maximum amount allowed (15 percent). At age 56, can I set up an annuity with TSP requesting a small amount each month and still receive interest on the amount left in my account? A: Yes, as long as you haven’t already taken a partial withdrawal. Use a partial withdrawal to purchase the annuity and leave the rest in your account until you need it.

TSP payout schedule

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Q: Let’s see if I’ve got this right: If I request monthly withdrawals from my Thrift Savings Plan account and change the amount each year, I’ll be able to receive a monthly check for life and still be able to build my principal, which I can pass on to my children or grandkids. Does TSP have such a plan? What option is it and how does it work? If I need some emergency money, would I be able to make a withdrawal from my principal? A: You may request a full withdrawal as fixed monthly payments. You set the amount,…

Competing annuities, benefits

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Q: Will I get full Social Security and a “full” Federal Employees Retirement System annuity when I retire at age 66? And when I invest my Thrift Savings Plan money, will that affect how much I receive from Social Security? A: I can’t say whether you’ll get a “full” FERS annuity, but none of these benefits, on their own, will affect the others.

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