Q. I am 31 years old and have five years of federal service. I am a GS-12, Step 3. I contribute 7 percent to the Thrift Savings Plan but have not done anything with the allocation: 100 percent to the G Fund. I have tried to determine the best allocation on my own, but there is too much information out there. I know that I need to do something now. I was thinking about 40 percent C Fund, 30 percent S Fund, 15 percent I Fund, 10 percent F Fund and 5 percent G Fund. Would this be a good start to set…
Yearly Archives: 2013
Q. I am 62 years of age and have been in civil service for 12 years. Can I withdraw a portion of my Thrift Savings Plan funds prior to retiring and leave the rest in? If so, I realize I will have to pay tax on the amount withdrawn (but not sure how much), but will I have to pay a penalty? Also, can you direct me on where to go to do a withdrawal? I am currently in Okinawa working for the Marines. A. You may take one age-based, in-service withdrawal, which will not be subject to an early withdrawal…
Q. As a temporary employee, am I able to contribute to the Thrift Savings Plan? A. You may be, but only if you meet certain criteria. Check with your agency personnel or benefit office.
Q. If I retire early at 50 years of age with 30 years of service under FERS, I understand I’d have to wait until my minimum retirement age to receive the special retirement supplement. What reductions would I have in my retirement annuity? Would I be able to receive monthly Thrift Savings Plan annuity at age 50? A. Mike: You may use your TSP money to buy an immediate annuity and receive monthly income payments at any age, once you are separated from service. Reg: If your agency offers you a Voluntary Early Retirement Authority, there wouldn’t be any age-based…
I took a look at returns for the various Thrift Savings Plan funds for the 12 months ending June 30, and here’s what I found: * The returns on equity investments — nearly 21 percent for the C Fund, 26 percent for the S Fund and 19 percent for the I Fund — have been ahead of the long-term average. * The negative 0.5 percent return on debt investments — the F Fund — has lagged the long-term average. * The relationship between these two asset classes — debt and equity — is what I would expect: When equity is…
Q. I have $100,000 in my Thrift Savings Plan account. What will I receive, after early withdrawal penalties, if I close the account? A. The minimum federal tax withholding is 20 percent, but you can elect a higher rate, so the maximum you’ll receive is $80,000. The early withdrawal penalty won’t be due, along with whatever tax you actually owe on the withdrawal, until you file your taxes in April of the year following the year of the withdrawal. See the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for details.
Q. How much of my Thrift Savings Plan maximum contribution of $23,000 can be put into the Roth TSP? A. All of it.
Q. My mother recently passed away and her teacher retirement account provided a lump-sum benefit to my sister and myself. As a surviving beneficiary other than a spouse, I can take the payment as a rollover to an inherited IRA. I would like to put this money into my Thrift Savings Plan account. Can I transfer the proceeds directly from the teacher retirement to my TSP? A. Inherited money can’t be transferred into your TSP account.
Q. I know you can transfer a Thrift Savings Plan balance directly into a Roth and pay taxes on the entire amount, which are due at time of tax filing. This causes a tax burden that may be difficult to cover with personal funds. However, is it possible to withdraw the funds directly into your checking account and within the 60-day window, still roll over these funds into the Roth, but at a level that is net of taxes? This would allow a portion of the TSP withdrawal to cover the ultimate tax liability? A. This is a question for your tax…
Q. I worked for the Department of Justice from 1989 to 2003 under FERS. I have worked in the private sector since that time. I will be 62 in 2015, at which time I think I qualify for a retirement annuity. Can I do all of the following: 1. Receive a FERS annuity based on my high-3 salary; 2. Continue to be employed in the private sector; and 3. Leave my Thrift Savings Plan money where it is for now. Is there any reason not to do this, or any value in deferring this? My impression is that the annuity…