Q. I work for the BOP and I am 10 months away from being forced to retire with 20 years of service. A few years ago there was talk around work that the age restriction was going to be raised, and it seems that was wishful thinking. I just accepted it as a probability because it was raised in the past and that gave me the opportunity to get hired. I took out a loan against my TSP account anticipating the age requirement would go up and as a result, unless something does change, I will most likely have a…
Monthly Archives: July, 2014
Q. Will TSP only pay out over a 30-year period? If so, then what happens to the money if I happen to pass away at 70? Can a beneficiary be set up so the rest of the money in the TSP will be paid out?? A. The TSP does not limit monthly payments to 30 years. If you pass away at any time, your account balance will be paid to your beneficiaries. I suggest that you review the information available at www.tsp.gov and then ask a specific question that is not answered by the literature.
Q. I’m trying to decide how to withdraw my TSP. I really do not need the income at this time. I’m 60 years old with no dependents or heirs. I have about $240,000 in my TSP. Is it possible to buy a life annuity with half now and take monthly payments later? I was also considering a life annuity with increasing payments and 10-year certain. Or would it be better to do monthly payments? From what I understand, I can adjust the payment once a year.
Investors, as a group, make plenty of mistakes. When it comes to investing, bad decisions are not the exception, but the rule. Investing mistakes stem from a variety of influences: ignorance, gullibility, fear and greed, to name a few. But I find impatience to be one of the most pervasive, and underappreciated, drivers of bad investment moves. The burning desire to act immediately, to do something, anything, right now, underlies many of the bad decisions investors make. The desire to act is part of the American way. We’re all responsible for our own fates, goes the thinking. Life is full…
Q. I am 65 years old. I have been employed in the federal government for nine years. At this late stage and age, should I join TSP. A. If you’d like to save money for your use later in retirement, yes.
Q. I’m 26 and I’m planning to get out of the Army next year. If i withdraw all the money and stop my TSP account after leaving the military, would I be charged for anything? If yes, what would it be ? A. You will be subject to income tax and the 10 percent early withdrawal penalty unless you qualify for one of the exceptions on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
Q. I have reviewed information at the TSP website. I have been unable to locate information regarding survivor benefits in the case of a nonannuity, monthly distribution without 10-year certain enabled. What are the rules in this most simple TSP account distribution plan? A. If you die while receiving automatic monthly payments from your TSP account, the payments will end and the remaining balance in the account will be distributed to your beneficiaries.
Q. If I were to retire Dec. 31, can the payments actually received in 2015, such as my last paycheck earned in 2014, payment for unused annual leave and buyout, if any, be used to fund a 2015 ROTH IRA? A. Paychecks constructively received in 2015 can be used as the basis for an IRA contribution to the extent that the income is earned income for this purpose. You annual leave payout is not considered earned income for this, however, and can’t serve as the basis for IRA contributions.
Q. I reached my MRA last January with 30 years of service. I plan to retire in January. For 2015, I am planning to withdraw $100,000 and then have monthly benefits of $1,000 from my TSP. Can I do that in the same year? Or do I have to wait in 2016 to start my monthly benefit? A. A partial lump-sum withdrawal and a full withdrawal in monthly payments can both occur in the same year.