Monthly Archives: April, 2013

Loan balance and G Fund

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Q. I am a 48-year-old GS-14/7 with about $240,000 in my Thrift Savings Plan (I have a little more in a prior 401(k), and my wife makes more than I do but does not have a 401(k) plan…I am willing to take reasonable risks). I have contributed the maximum at 43 percent C, 22 percent S, 25 percent I and 10 percent F for several years and rebalanced each year. Indeed, I stubbornly left it like that during the crash but have recovered nicely. I recently borrowed $30,000 (yes, I know, that is not the best course), at the G…

Rollover into TSP

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Q. I have retirement funds in TIAA-CREF. The funds are listed as 401(a) and 403(b) accounts. All are pretax. May I roll over these accounts into my Thrift Savings Plan? I am considering this only for consolidation purposes. A. Yes.

Partial TSP withdrawal

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Q. I will be 63 years old in August. I have made a previous partial Thrift Savings Plan withdrawal but need another for a down payment on a home. 1. Can I make another partial withdrawal?  If not, what regulation dictates that I cannot? 2. If I can’t make another partial withdrawal and decide to take monthly payments, can I set the monthly payment amount or does TSP have a required monthly distribution rule?  And will the remaining balances continue to earn income? A. You are limited to one partial withdrawal during your lifetime. I’m not a lawyer, so you’ll…

Divorce and TSP

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Q. I am about to divorce my husband, who works for the Federal Aviation Administration. 1. Can I keep his health insurance as an individual? Does this cost anything to him? How much will it cost me? 2. How can I be eligible for his life insurance after divorce? 3. Which is more beneficial: Getting a survivor benefit or getting a higher pension? 4. When can he start taking money from his Thrift Savings Plan? A. You can’t withdraw money from his TSP account. Your divorce settlement will govern how the TSP is divided and distributed and you’ll likely wind…

TSP MetLife annuity protection

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Q. Is an annuity purchased with Thrift Savings Plan funds from MetLife federally insured/guaranteed the way bank accounts have FDIC? Or is a MetLife guaranteed annuity not really guaranteed at all, in case even a huge company like MetLife fails? A. A TSP annuity is guaranteed by MetLife, not by the federal government.

TSP vs. Roth IRA

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Q. I am a fully vested CSRS employee with the Environmental Protection Agency for 33 years at age 55. I have received my numbers, but I missed my first date to retire. How long does it take to receive my first full check? Worst-case scenario? Best-case scenario? And is there any way to speed up processing? When will I receive my annual leave payment? Will it be immediate in one lump sum without taxes since I already paid taxes on my leave? Should I take all of my Thrift Savings Plan out at once or leave about 10,000 in and…

Keep bonds in your portfolio to guard against stock losses

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With interest rates so low, it might be tempting to think bonds are a bad investment. If you are counting on your portfolio to provide reliable income in retirement, however, this might be a dangerous idea on which to act. Bonds are more than just interest generators and have value beyond the cash payments they spin off. They provide an important hedge against the risk of loss elsewhere in your portfolio. Unless there are exceptional circumstances — you plan to withdraw and spend your entire Thrift Savings Plan balance within the next couple of years, for example — you should…

TSP withdrawal at 70 1/2, Part II

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Q. I am retired CSRS. I was born Nov. 15, 1942. Therefore, I’ll be 70½ on May 15. 1. When will I have to start taking payments from my Thrift Savings Plan account? 2. Can I wait until January to March 2014 before I get my first payment? 3. What is the minimum I will have to take? 4. I do not want a total lump-sum payment. 5. Do I have to take a monthly payment, or can I get my minimum payment once a year? 6. What form do I need to submit to get minimal payments each year? 7. Can…

TSP withdrawal at 70 1/2

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Q. I have to withdraw my Thrift Savings Plan because of my age (70½). I am indecisive as to: 1. Withdraw all to a saving account 2. Get a partial withdrawal for 120 months, or 3. Withdraw part of it and gradually withdraw the rest over a 10-year time span. My considerations are: 1. No taxes, as I understand it, over a period greater than 10 years on a gradual withdrawal 2. Putting me into a higher tax bracket. What advice or comments can you give me? A. Unless you can come up with a good reason – that is,…

Penalty on TSP withdrawal?

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Q. My age is 52. I worked 22 years in the Postal Service. I have a Thrift Savings Plan account and am now retired due to a disability. If I make a full withdrawal, will I be penalized? A. Yes, unless you qualify for one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.

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