Monthly Archives: July, 2013

Q. I separated from federal service in 2007 after 19 years in FERS. At the time of separation, I withdrew my Thrift Savings Plan contributions. I am considering returning to federal service. I was born in 1961. If I return to federal service, what will be my minimum retirement age? Are there special service requirements for reinstated federal employees? Am I required to return funds I withdrew from the TSP? If not required, is it still possible to return TSP funds that were withdrawn and deposited in another 401(k)? How will my FERS retirement annuity be calculated? Where can I…

Q. How is the Thrift Savings Plan’s G Fund related to bonds I keep hearing about lately being sold off from other bond funds? How is the G Fund different from these funds? Is this bond fund an inflation-protected bond fund? How does this fund guarantee the principal investment? Who takes the loss if yields on bonds purchased are lower when shares in this fund are transferred than on when those shares were bought? A. The G Fund is backed by the federal government and accrues interest equal the weighted average interest rate for all outstanding U.S. Treasury debt. It is not a…

Q. I’ve retired and have placed 100 percent of my Thrift Savings Plan account in the L2030 fund. How will my account grow if I’m not able to purchase more shares? A. The value of each share you own will change (hopefully grow) over time.

Q. Last fall, when we were approaching the fiscal cliff, I made the mistake of transferring my L2030 fund into the G Fund because I believed the market was going to have a significant drop due to the instability of the federal budget. At the time, the Dow Jones was around 14,000. Long story short, my funds are still in the G Fund and the Dow Jones has now exceeded 15,000. I don’t know when to transfer them back to the L2030 fund because I feel like I’m buying high right now. What are your thoughts? A. You’re not qualified to manage an investment…

Q. I left federal service in 1998 after almost seven years. I left the Thrift Savings Plan intact and have seen it grow quite nicely. It is approximately $95,000.  My husband has been in federal service since 1995 and will most likely stay in until retirement age (we are both 49 yrs old). My husband’s TSP has also grown nicely. However, being a stay-at-home mother of five, we are seriously struggling. Our oldest child is two years away from college and our next oldest will be starting at a very expensive parochial high school in September. Our other children are 11, 9 and 3. Our biggest…

Q. I am a contractor in between jobs and would like to withdraw my Thrift Savings Plan. If there are any owed monies to the government, will that be taken from my TSP?  How much tax will be taken from me if I do a lump sum? And is there a difference in taxes if I do a monthly payment? Lastly, is there a hardship exemption rule if unemployed? I am retired from active duty (20 years) and 42 years old. A. There is an “it depends” at the beginning of the answer to each of your questions and I can’t…

Q. I am retiring under FERS in a few months, and am looking for recommendations on how to best invest my Thrift Savings Plan dollars. I believe my options are to buy a MetLife annuity, leave the funds in my TSP account until I turn 71 years old (I am now 60), or roll the TSP dollars into an IRA or other type of investment account. I have approximately $350,000 and will receive my FERS retirement and eventually Social Security. Do you have any recommendations to roll the dollars into an investment account that I could occasionally draw from and that could draw…

Q. I read one day this past week that federal employees who are retiring may be allowed to make a one-time withdrawal from there Thrift Savings Plan account at age 55 without penalty due to the fact they will receive a six-month reduced (estimated to be 50 percent) annuity until the Office of Personnel Management can reconcile the employee’s account. Where is that information in writing? A. I haven’t seen this in writing. If you read it, I presume that it must have been in writing. Where did you read it? The current law allows you take one or more…