Q. I’m looking to retire in 18 months and don’t know who to trust when making a decision to keep money in the Thrift Savings Plan, do a mix with a traditional IRA, or take it all out and put 100 percent in a traditional IRA? A. I can give you one recommendation that may solve your problem: Leave your money in the TSP and manage it there for as long as possible. In fact, if you have eligible retirement plan accounts outside of the TSP, you should move them into the TSP. Anyone who tells you otherwise is either…
Yearly Archives: 2012
Q. I’m active-duty military, maxing out one Roth IRA. I was interested in opening a Roth TSP, as well, but a financial adviser at my bank recommended opening a second Roth IRA in my wife’s name and maxing it out first before contributing anything to a Thrift Savings Plan. This struck me as odd because it would leave my retirement money spread over three separate accounts. I couldn’t max out the TSP but could probably contribute more than $5,000. Is my financial adviser (free service from the bank) right or just trying to get me to open another IRA at…
Q. I just changed my contribution allocations from 100 percent G Fund to 100 percent L Fund 2030. Would it make sense to transfer my fund balance that I earned with G Fund to the L Fund? A. It’s impossible to give you reliable investment advice without the proper analysis and understanding of your unique circumstances, goals and constraints. How you manage your investments should depend directly upon what you expect that money to do and when. In general, though, unless the G Fund is holding money that is to be spent within the next few years, or that is part…
Q. I want to help my daughter reduce her $120,000 graduate student loan, which she will repay at 6.5 percent interest when she finishes next year. I am 58 years old, a foreign service officer, and planning to work until I am 65. Given that Thrift Savings Plan general loans are at 1.2 percent interest, I am considering asking for a $50,000 loan to help my kid jump-start payments. In your opinion, would this be wise? A. Wise is not really the issue here. It’s certainly generous. But, is it affordable? That’s really the question.
Q. My wife recently retired from a state position. She was informed by her human resources/benefits office that she could roll over the balance of her 401(k) into my Thrift Savings Plan. Is this accurate? A. Wrong! One spouse can’t combine their retirement plan assets with those of the other.
Q. Can a TSP residential loan be taken out to pay off a mortgage on a primary residence? A. No.
Q. My wife has 12 years of FERS service at the age of 62. She is eligible to retire. Can she withdraw the full amount from her Thrift Savings Plan without penalty? A. Yes.
Q. I recently retired from the military. I had $30,000 in the Thrift Savings Plan. I have no plans on returning to federal service. I have Roth IRAs with two other private companies, each with less than what I had in the TSP. I want to remove these from TSP and place into either a new Roth or one of my existing accounts, which makes more sense as a larger pot of money will earn me more since I can continue to contribute. This opens a new concern as the limitations of combined income and contributing to a Roth. I…
Q. I am 63 years old, in FERS, have 25 years of service, and have worked for the same agency my entire government career. Because of medical conditions, I need to retire within the next two months. I have an outstanding $20,000 loan and will not be able to repay it before retirement. I have read a lot of what might happen: 10 percent penalty, etc. But could you explain what would be the best course of action and how the outstanding loan will be treated. I would like to use part of my Thrift Savings Plan for medical bills. A. If…
Q. I am going on 72, working for the Postal Service, contributing to the Thrift Savings Plan and paying off a loan. Do I have to start the age-based withdrawal? If I do, how do I contribute and withdraw at the same time? My health is good, and I don’t feel like quitting at this time. A. You don’t have begin taking Required Minimum Distributions from your TSP account until after you’ve retired.