Q. According to a letter I received from the Thrift Savings Plan, I’d save in account management fees if I transfer traditional IRA to TSP. I don’t feel comfortable with this transfer. How would we know that the federal government won’t decide to use our funds, like they borrow Social Security funds, and then it won’t be there when we want it? What are your thoughts on this? A. What you’re worrying about is against the law. I think you are worrying needlessly. Your money is probably at greater risk in an IRA.
Monthly Archives: March, 2013
Q. I am a retired federal employee, having worked for the Social Security Administration. I have funds accumulated in the Thrift Savings Plans. I am getting close to age 70 and am considering the purchase of a life annuity with some or all of those funds, and know that those payments will be taxed by the Internal Revenue Service. But what about the states — particularly, for me, Alabama? Are these TSP annuity payments taxable by Alabama? A. I don’t give state tax advice for each of the 50 states. You should ask an Alabama CPA for specific advice.
A sudden reduction in your earnings from something like a furlough can be frightening. Some of this fear is justified. Earning less can mean immediate changes in lifestyle for many who are making just enough to meet spending needs. But some of the fear might be unnecessary — based on a lack of understanding. A 20 percent reduction in income, as has been discussed in response to the threat of sequestration, might wipe out the ability to contribute to the Thrift Savings Plan for more than a few employees. Even those who could maintain their standard of living, or at least adjust to…