Monthly Archives: March, 2012

TSP loan


Q. I have worked for the Postal Service for 24 years as a postmaster. I would be able to take an early out if it was offered. I want to borrow on my TSP for a residential loan. If I make a 10-year loan from my part of the TSP next month and then the Postal Service offers an early-out retirement and I take it, will I have to continue making the payments? Also, when I do retire, will I be able to pull out all my savings in TSP? A. If you retire, your outstanding TSP loan will become…

TSP complaint


Q. I am a federal employee and I have a TSP account from which I am trying to take out a residential loan. So far I have faxed in my information four times and I am told every time that a different page is unreadable. The issue is I have sent each fax from a different fax machine and there is an issue every time. I would like to follow a complaint, but the thrift line is no help. How would I go about filing a formal complaint? A. The Federal Thrift Retirement Investment Board administers the TSP. You can…

Full TSP withdrawal at age 59


Q. I left federal service and have $4,019.42 in my TSP account. I requested a full withdrawal. Will I get the full amount less the 10 to 20 percent that is with held for taxes? A. Your payment will be subject to 20 percent mandatory tax withholding.



Q. I read your article that Traditional IRA funds can be transferred to the TSP either before or after a person’s retirement. My question is, can I transfer SEP IRA funds into TSP after retirement also? How about 401K-SOLO? A. Yes and yes.

TSP minimum distribution


Q. Just how is the minimum distribution calculated for the TSP? I understand calculations based on life expectancy tables, but not how the minimum amount is calculated. I am assuming that it would be less than that based on life expectancy. I am FERS and plan to retire in June. A. In general, the Required Minimum Distribution amount is calculated by dividing the prior year’s ending account value by the appropriate life expectancy factor. There are specific rules that may apply to certain situations, however. See IRS Publication 590 for instructions for calculating the RMD.

Transferring IRA money to TSP


Q. I currently have about $75,000 in a money market at a local credit union — this money market used to belong to my father, but my name was on the account also. When he passed away I moved that money into my own credit union account.  May I take $50,000 out of the money market and put it into an IRA and then when I retire (in three years) move that IRA money into my TSP? A. I’m not sure how you’ll get the money into an IRA, unless it’s already in once, since contributions are limited each year.…

TSP withdrawal


Q. A friend of mine in the office (Federal, CSRS) recently passed away. His wife, in looking through his TSP account, discovered that he had withdrawn $70,000, but she cannot figure out where that money went because she finds no records other than the withdrawal itself.  If you have any ideas of how I might help her track it (or anyone involved in federal service TSP), or discover what happened to it, it would be extremely helpful. A. If the TSP made the check payable to him, then the answer can only be found in his records, and not in…

Retirement and TSP


Q. I am planning on retiring within a year, at the age of 55.  When will I be able to withdraw funds from the TPS account without a tax penalty.  My understanding is at any age once retired but I would like to make sure I am correct on this. A. As long as you retire from federal service during or after the calendar year in which you reach age 55, your subsequent TSP withdrawals will not be subject to the early withdrawal penalty.

TSP Monthly Payment Calculator


Q. Why do you consider the TSP Monthly Payment Calculator useless? I have only G Fund allocations now that I am close to my FERS retirement of 34 years. I have even transferred all dollars from a traditional IRA into the TSP for ease of management and greater total G fund assets. My retirement stool has four legs: military reserve retirement, FERS, early Social Security income and TSP. The calculator allows us to put in any part of our accumulated expected TSP value that we desire for retirement supplementation and somehow calculates that against expected growth without any future contributions…

Financial checkups: Once is not enough


Investors, unsure about whether they are on track to meet their financial goals, frequently ask me to perform a financial “checkup.” I suspect that is the result of three influences: They are concerned about their ability to maintain their desired lifestyle for as long as they are alive; they have seen financial checkups relentlessly offered by various purveyors of financial services and products; and they lack the time or specialized knowledge to determine the answers for themselves. Although many people are willing to pay a handsome price for this service, I rarely comply since I don’t believe the one-time financial…