Q. I will be 70 in February 2016 and plan to retire and take all my money out of my TSP. I am a single divorced woman and do have monthly security for which I have been paying taxes. Can I take all my money out, as I have calculated that the $1,000 I am from Social Security is not enough for my expenses as I have calculated it. A. Yes, you may take all of your money out. Use form TSP-70.
Yearly Archives: 2014
I have written about the perils of trying to time the investment markets for years, but I continue to receive questions from readers who use it to manage their Thrift Savings Plan accounts. There are a number of ways to effectively attack this misguided strategy, and the trick is to find the one that resonates with each investor. This time around, I’ll discuss the risk that market timers either don’t see, or choose to ignore: long-term risk. Market-timing strategies are focused in avoiding near-term risk:; the risk of losing money to market declines, or the risk of failing to capture…
Q. I recently lost a high-paying private sector job. I may be getting a much lower-paying federal job. The only way I can make it is to cash out of my 401(k) about $35,000 to pay off debts. But I was thinking if I get the federal job, how long before I can participate in the TSP? And how long before I could take out a loan?
Q. After reviewing the TSP rules, it appears that I can’t transfer (or roll over) my Roth TSP monies into a qualified Roth IRA without a proportional share coming out of my traditional monies. Is this correct? I wanted to leave my traditional monies in my TSP and separate the Roth monies and roll them over into a Roth IRA.
Q. I just started a federal career at age 31. I rolled over about $21,000 dollars into the S fund from prior retirement. Would it be better to use the L funds for growth which carry less risk, or seek the highest amount of returns in the S fund. I am huge risk-taker when it comes to investing, just trying to make informed decision before accepting all the risk of the S fund with no diversification. A. Let’s see … I know that you’re 31, have about $21,000 in the S Fund, are a huge risk-taker and know little or…
Q. Can I withdraw from my TSP if I accept a VERA with 30 years of service and my age is 47, or is there a penalty? If so, how much? A. If you separate from service before the calendar year in which you reach age 55, you will be subject to an IRS 10 percent early withdrawal penalty unless you qualify for one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
Q. My daughter is 20 and just entered the military, hopefully to make a career of it. She is contributing 10 percent to her traditional TSP and $25 per month to her Roth TSP. Her traditional TSP is fully invested in the G Fund (this was automatic and she didn’t know enough to change anything). Wouldn’t it be better for her to put the maximum amount she can afford into the Roth TSP before putting anything into the traditional? She will probably be making quite a bit more money when she retires than what she makes now. If not, what…
Q. How do I request a TSP partial lump sum after age 59-1/2? What forms do I need to fill out, and how long does the process take? I plan to keep working until age 63 and continue contributing to my TSP. A. Use form TSP-75 to request an age-based, in-service withdrawal. Allow weeks for the withdrawal to be processed.
Q. I was recently hired at the the FDA. I have about $43,000 in student loans with a high interest rate. How much should I set up to be put into my TSP in order to take a loan from myself? Would this be a smart move? I believe that this way I’ll take out a loan from myself at a lower interest rate.
Q. My birthday is June 30, 1944, so I turn 70-1/2 on Dec. 30, 2014. Do I draw on this by Dec.30? Or if I wait until April, do I have to do two payments in 2015? A. Deferring some or all of your 2014 RMD into 2015 will reduce your taxable income for 2014, but increase your taxable income for 2015.