If you have any of your Thrift Savings Plan account invested in the C, S or I Funds, you should be nervous. Why? Not because of the Ebola virus, turmoil in the Middle East, the national debt or legislative gridlock. Sure, those are all significant threats to various interests in various ways, but, whether you realize it or not, the threat those pose to stock values are already reflected in the share prices of the various TSP funds. Professional investment managers are not paid to wait for bad things to happen before responding. They are paid to predict the probabilities…
Yearly Archives: 2014
Q. I will retire Jan. 2 in CSRS. I believe the paydays on Jan. 2 and Jan. 16 will be part of the 2015 TSP contribution year. Also, I believe that I can contribute up to 100 percent of my basic pay to TSP (which is what I would like to do for these last two pays). Would the 100 percent be whatever is left after all other deductions (taxes, FEHB, etc.) have already been deducted? Essentially, when does the 100 percent get applied? A. The 100 percent is applied after all required deductions have been subtracted.
Q. My husband and I are 51. We will retire in about 10 years. How do we find the right financial advisor that will help us understand what we need for retirement, and what we need to do if we won’t have enough to meet our needs?
Q. In the event I choose a lump-sum payout at my departure, can this payout be rolled into my TSP account? A. No.
Q. I’m in the FERS retirement plan and will retire March 31 from the Defense Department. At the time of retirement, I will have more than $300,000 in my 401k. I have two multiple-part questions: 1. Can I decide how much I want to take in monthly withdrawals and, if so, do I pay the 20 percent penalty monthly or do they take the 20 percent off the $300,000 before I even start getting my monthly payments? 2. If I leave my money in the TSP, do they continue to invest my money, and will I continue to earn interest…
Q. If I take 5 percent or the maximum interest my retirement plan provides, does this violate the 72t definition of reasonable interest rate, and would I end up paying the 10 percent penalty? A. 72t distributions must be computed using one of three specific formulas, and the rules are strict. Anything else will not qualify for the exemption. You should work with a qualified tax adviser before initiating any payments.
Q. I retired September 2013 in CSRS after 40-1/2 years. I want to take out a one-time distribution equal to about 25 percent of my TSP account. Is is true I can only take out a one-time distribution or payout? I am over 59-1/2. A. You are limited to one partial lump-sum withdrawal and a full withdrawal, which may be taken in the form of monthly payments. You must take the partial lump-sum withdrawal before beginning monthly payments.
Q. Upon retirement, can I elect to take a full withdrawal in the form of monthly payments, and then at some later date choose to take a one-time lump-sum withdrawal? For instance, three years after retiring, can I choose to remove $50,000 if I have never taken a lump-sum amount. A. Only if the lump-sum is the entire balance remaining in your account.
Q. I am 63 and will be retiring under FERS probably within the next two years. Am I allowed to have my long-term girlfriend on my TSP annuity? A. Maybe: “If you chose a TSP annuity that provides for a joint annuitant other than your spouse, the joint annuitant must be either a former spouse or someone with an insurable interest in you. This means that the person is financially dependent on you and could reasonably expect to derive financial benefit from your continued life. Blood relatives or adopted relatives (but not relatives by marriage) who are closer than first…
Q. I have been retired from the federal government for eight years and have worked for a private firm. I have a 401k that I have been contributing to since I started working for this firm. Can I transfer my existing 401k to the TSP when I stop working. A. Yes, as long as it doesn’t contain any after-tax money. Use Form TSP-60.