Monthly Archives: August, 2012

Q. I am in my early 20s and have just left a federal job. I am trying to decide what to do with my Thrift Savings Plan money. I’m leaning toward rolling it over to an IRA but do not understand where to start. Where do you get the forms to do this? Is it a good idea? (Cashing it out would have been my next option.) A. The best thing you could do with it is to leave it in the TSP and manage it there for as long as possible. In fact, if you have IRA, 401(k) or…

Q. The Internal Revenue Service deferral limitation for 401(k) accounts is based upon a dollar limitation, which is the same for government and service members who contribute to the Thrift Savings Plan. For federal employees wanting to maximize their TSP contributions, this is a simple process on Form TSP-1: You merely take the current IRS limit ($17,000) and divide it by the number of pay periods (26) and you get the amount you should withhold in each pay period ($653.84). If you receive a step increase, or get promoted, or anything else that changes your pay, there are no effects…

Q. I served six years in the military and was honorably discharged in 2005. I can’t remember if I had a Thrift Savings Plan or not. Who can I contact? I’m receiving disability benefits through the Veterans Affairs Department. Would they know? A. Start by contacting the TSP (www.tsp.gov).

The most fundamental task in retirement planning is the management of risk. It is critical to identify sources of unacceptable, or catastrophic, risk and to neutralize these risks by either eliminating them or insuring against them, if possible. One potentially catastrophic risk often overlooked by federal employees is liability for damages stemming from their performance on the job. Any federal employee can be the target of a lawsuit filed by a private party for alleged violations of their legal rights. Most at risk are managers and employees who have frequent dealings with the public, such as those at the Department…

Q. I am 66. I was told that I can stop contributing to my Thrift Savings Plan, which I already knew, but still get the 1 percent from the feds. Can the fund be closed entirely without being penalized? The account has very little in it, and my retirement is next year. A. No, your TSP account will continue until you have retired and withdrawn all of its contents.