Q. I am 65 years old and have been retired 5 years from USPS under FERS. My mortgage balance is $58,500 at 4.5%. I pay $665/mo. for principal and interest. The mortgage balance will be paid off in Dec 2023. My TSP balance is $129,000 and all in the G fund earning 2.5%. Right now I take monthly payments of $700 from my TSP. I am thinking of increasing my monthly TSP payments (during open season) from the present $700 to $2,000. I would then put an extra $1,200 per month towards my monthly mortgage payments. I would then pay…
Yearly Archives: 2014
Q. Read your Money Matters columns in the Federal Times and am always intrigued by what advice you put for. Particularly interested in a column you did for the October 6, 2014 issue, entitled “Why market timing is a sucker’s bet.” I am a federal retiree with 30 years federal service, and have been retired 8 years. One of the issues I wish you would discuss, either in association with the above column, or as a standalone, is how retirees can continue to invest, albeit in a more careful manner.
Q. I recently returned from Afghanistan. I maxed tax exempt ROTH TSP contributions ($17,500) and made tax exempt Traditional TSP contributions as well. All contributions were tax exempt between January and June. Upon redeployment, I planned to continue to contribute tax deferred contributions not to exceed $17,500 between July and December in accordance with the 415(c) annual addition limit of $52,000. However, my TSP contributions were stopped. DFAS told me I could make NO additional Traditional TSP contributions as I had left the CZTE and was no longer eligible to contribute over the TSP limit. I spoke with a TSP representative and they stated…
Q. Can you tell me why TSP G Fund doesn’t earn interest every day? I retired just about two years ago. On the advice of my tax accountant, I consolidated all of my TSP into the G Fund about a year prior to retirement at age 62. I don’t have a lot in the TSP, but it is over $300,000. I created a spreadsheet to track my daily, weekly and monthly interest earned and payouts (that should continue till I am in my 80s). There are no TSP postings on weekend days, but on the next work day interest is posted,…
Q. I am 64 years old with 27 years of federal service and will retire in two years (FERS). I want to withdraw $50,000 now to help out my kids. When I retire can I make a lump-sum withdrawal? Can I make another withdrawal when I retire? If I took a lump sum I would probably invest most of it. What options do I have with my TSP money at age 66 when I retire after I withdraw money at 64?
Q. How do administrative costs of TSP compare with TIAA-CREF? A. In general, the TSP costs are lower. TIAA-CREF offers a wide variety of investment and plan options and the administrative costs vary among them, so the difference depends upon what, exactly, you are comparing to the TSP.
Q. I am 52, and I have all my TSP money in the C Fund: $187,000. I probably will not retire until 62 or 65, and by that time I will have 30 years of government service. Which L Fund should I switch to, and should I make a lump-sum move now?
Q. I’m a FERS participant and a big supporter of the TSP. I’m not a huge fan of not being able to change distribution amounts more than once a year and not a fan of not being able to choose which fund(s) the distributions come from. Do you think either of these two issues may be modified in the future? A. I know of no plans, but both are possible.
Q. I am looking at retiring in the FERS LEO category next year. I have a $30,000 outstanding TSP loan, which we will not be able to pay back. I understand I will incur a 10 percent IRS penalty and the $30,000 will be looked at as a taxable disbursement. Am I still eligible to obtain life expectancy withdrawals when I retire? A. Yes.
Q. I have approximately $4,500 to repay on a TSP loan. I want to retire in five years, so I’m trying to build up my TSP. Am I better off to let the loan run it’s course, or am I better off putting the additional contributions toward the loan?