Q. I’m a 40-year old mailman with 17 years service. I plan on leaving the post office when I hit 52 (30 years service). I understand I need to leave my TSP alone until 55 without penalty. My house will be paid off before I’m 51. I plan to work part-time with less stress after 52. I have $91,000 in traditional TSP now ($15,000 in L2030), the rest in G fund. I just switched from 10 percent to 15 percent payroll withdrawal. Should I change my contribution to 100 percent going into L fund, or remain with my current 70/30…
Yearly Archives: 2014
Q. If I retire at my MRA, which is 56, with 31 years of service, will my distributions be subject to the 10 percent penalty if I am under age 59-1/2? A. No.
Q. I am in the National Guard and I am a civil service employee. Is the annual maximum contribution for the TSP the combination of the two, or is it for each individual account? Can I contribute in 2014 $17,500 to my Guard TSP, then $17,500 to my civilian TSP account as well? A. Unless there is a special exception for Guard pay, the limit is combined.
Q. If I retire in December under MRA +10 and I’m 59 years old, how long do I have to wait to request a full withdrawal with monthly payments? Also, can I request the same day to take a partial lump-sum withdrawal, or do I have to do them separate?
Q. I saw your response to a TSP question about what happens to an account that is giving monthly payments (not annuity) when you die; payments stop and remaining funds go to the beneficiary. If your beneficiary (wife) also has a TSP account, are there any ways to transfer that to her TSP vs. lump payout if you die?
Q. From what I understand, I must repay a TSP loan within 90 days of the date my agency notifies TSP of my separation from service, otherwise my loan is taxable. When does the agency notify TSP of my separation, upon retirement? A. You’ll have to ask your agency’s benefits officer.
Q. I am under FERS and contribute the maximum amount into TSP. When I am eligible to retire (57-1/2), do I have to immediately start collecting out of my TSP once retired, or can I roll it over into another bank or institution into a 401K without penalty? And how does one receive payments if I can’t roll it over?
Q. I am a FERS employee and plan to retire in December 2015 at age 68-1/2 with 30 years, nine months of government service. I presently invest my TSP with G Fund 60%, F Fund 10%, C Fund 10%, S Fund 10% and I Fund 10%. Should I switch the money out of the G Fund and invest in C Fund 60%, S Fund 20% and I Fund 20%, as they seem to be doing so much better than the G Fund?
Q. I’ll retire under FERS at the end of this year. Will the lump-sum payment for annual leave that I’ll receive early in 2015 would be considered earned income for the purposes of being able to contribute to my non-TSP Roth IRA? A. No.
Q. You recommend that if we do not feel comfortable managing our TSP, we should invest in the L Fund that most closely corresponds to our life expectancy. However, the L Funds are named for the year we expect to start withdrawing money, not the year we expect to expire. I expect that I will not be withdrawing much money the year I expire, and certainly none afterwards. So why do you word your advice that way?