Q. My wife and I plan on retiring in seven years. We are covered by FERS and will each retire at the minimum age (56) with over 37 years of service for both. Can we combine our Thrift Savings Plan accounts at retirement? A. No.
Monthly Archives: June, 2013
Q. I’m no money expert and, in line with your advice, would like to do better than take the safe or easy route by contributing to the L Fund that most closely matches my life expectancy. How do I go about finding a financial adviser who is familiar with the Thrift Savings Plan and government employees? What sort of questions should I be asking them, and can you ballpark the cost of such an adviser? A. Your adviser should be: 1. Free from conflict on interest 2. Competent in the kind of work that needs to be done 3. Concerned…
I am regularly approached by Thrift Savings Plan investors with stories like this: “I made a big mistake with my TSP account. A few years ago, I lost a ton of money when the markets crashed, so I took all of my money out of the C, S and I Funds and put it into the G Fund. I’ve missed most of the rising stock market since then and I’m worried that I can’t afford to sit on the sidelines forever. Maybe I should just bite the bullet and get back into the market before it’s too late.” To the…
Q. I have between 10 and 15 years to work until retirement (I am 52 yrs old). Right now, my contribution allocation is: S: 25 percent C: 25 percent L: 20 percent G: 30 percent The distribution is more diversified. What do you think? I don’t know what I am doing; therefore, I am just guessing. A. Your allocation is basically: 50 percent stocks, 20 percent bonds and 30 percent cash. This would generally be considered a moderately conservative allocation. Whether, or not, it’s right for you is impossible to say without more information and analysis, but it doesn’t appear to…
Q. I am coming up on 10 years in the federal government and have not done a good job with my Thrift Savings Plan. I have left it at 100 percent in the G Fund, contributing 5 percent of my salary to TSP. I am now looking to maximize my TSP contribution (although perhaps not right away; I am considering increasing it to 8 percent this year and the upping it again next year until I’ve maxed it out). I was planning to put the additional contribution this year into the L Fund. I am almost 35, will soon have…
Q. I have $300,000 in my Thrift Savings Plan and am retiring soon. I plan on taking $40,000 out to put into my checking and then roll the remaining $260,000 into an account that I can make monthly withdrawals for the rest of my life. I am 60 years old. What percentage of this should I take out monthly (I’ve heard anywhere between 4 percent and 6 percent) … to make it last? What is your recommendation? A. First, you should take out enough to create a spending fund and then take the monthly withdrawals from your TSP account. No…
Q. I started taking 4 percent of my Thrift Savings Plan when I retired. When I reach 70½, will I have to make a total withdrawal or will I be able to take life expectancy payments? I am CSRS Offset if that makes a difference. A. You may change the amount of fixed monthly payments once each year or you may switch from TSP calculated payments to fixed payments, but not the other way around. See the publication at https://www.tsp.gov/PDF/formspubs/tspbk02.pdf for info.
Q. I was downsized when I was 46 and rolled over everything into a 72(t). I am currently withdrawing from it monthly as I cannot find a job that pays enough to live off of. I am in a situation now where I need some extra money to clear off some debt and buy a new car. Can I take a one-time withdrawal from my 72(t), in addition to my monthly? If so, what are the tax implications? A. You may not change the annual withdrawal scheme as calculated and required under 72(t). If you do, the 72(t) exception to the…
Q. In March of this year, I moved 50 percent of my balance from the G Fund to the F Fund because I was tired of not making any money in the G Fund. I evaluated the performance of the F Fund over the past several years before doing this and assumed that risk was low. Initially, I was quite happy with my decision, but now I see the F Fund share price dropping consistently. Is this drop in the F Fund share price temporary, and do you expect it to regain its momentum? I’m now a little nervous about moving to…
Q. I have all of my money in the L Fund 2030. All of the money experts are predicting that the stock market will fall. Should I transfer all of my money to the G Fund, then transfer back when to the L Fund when it nears the bottom? Are there any fees if you transfer? Or should I just ride out the storm and stay where I am? A. Are those “money experts” going to take responsibility for the outcomes you experience if you follow their “advice.” Of course not. So why would you listen to them? Aren’t these…