Q: I am a CSRS employee. When I decide to retire (possibly age 55 or 56), I’m not sure what to do (if anything) with my thrift savings account. I do not plan to rely on this savings as part of my living expenses during retirement. Do you recommend keeping in the thrift plan or place it in something else? A: What you do with the money should depend upon what you expect from it. Since you have no expectations for the money, there is no appropriate investment strategy and it doesn’t matter what you do with it.
Author militaryonline
Q: I was born in 1956, serve under FERS and completed 10 years of federal service this year. Can I resign from the service and draw reduced annuity at age 56? Also, am I eligible to draw 40 percent of my TSP contribution with the remaining amount in monthly annuity immediately after resignation? A: Under those circumstances, you will be permitted to take a partial withdrawal followed by monthly withdrawals or annuity payments.
Q: What is the best resource for retirement planning for federal employees? Is there is listing of qualified fiduciaries or financial planners available for retirement planning who are not commission-driven brokers? A: I know of no such resource. My practice is Variplan, LLC, and I believe that we are the best resource you’ll find – fiduciaries, fee only, cost effective, experts. www.variplan.com.
Q: Upon retirement from federal service I opted for life insurance, with monthly premium payments withdrawn from my monthly retirement checks. I now no longer need this insurance and would like to cancel it. OPM says they are not able to do this. How do I go about canceling this life insurance? A: From the OPM: “Unless you have assigned your insurance, you may cancel it at any time. If you cancel your basic life insurance, you are canceling all your optional insurance as well. If you elected 50 percent or no reduction for your basic life insurance, you may…
Q: I will retire shortly from the U.S. Postal Service. My question is about withdrawing my money from my TSP account. My husband, who is already retired, and I went to see a financial adviser about retirement planning. I just turned 62 in December and my husband is 66. The financial adviser said we should take all my money out of my TSP account and hand it over to him. He would then invest it for us. Some would go into buying an immediate annuity which would give us an income of $1,000 for the next 10 years. Then he…
Q: Based on your answers to previous questions, if I retire at age 58 (my MRA is 56) with 15 years service, I can start receiving payment immediately. Why is it my Human Resources folks and the printed literature I read says I have to wait until I’m 59.5? A: The exceptions to the early withdrawal penalty are listed in the section titled “Additional 10% penalty tax if you are under age 59 /12” on page 4 of the TSP tax notice at https://www.tsp.gov/PDF/formspubs/octax92-32.pdf.
Q: I’m retired from a government job. I want to roll my thrift savings into an IRA. However, I need a new roof on my house and I don’t have the cash I need and don’t want to put the cost on a credit card. Can I take a partial withdrawal from my thrift account to cover the repair, and then roll the rest of the money from the account into an IRA without penalty, since I took a distribution from the thrift plan first? A: Yes, as long as you haven’t already taken a partial withdrawal from your TSP…
Q: My husband just retired on Dec. 31 from the U.S. Postal Service and has a TSP loan balance. He’s 60 and will turn 61 on March 11. Should we pay off the loan, or should we choose not to pay and declare a taxable distribution? How much tax penalty with there be if we declare a taxable distribution? A: If in doubt, he should repay the loan. If he doesn’t repay it, there will be no early withdrawal penalty – only income tax.
Q: I will be 70 in February and realize I have until April 2012 to make my decision about how to distribute my funds. But I am doing my best trying to make a good decision. I am a CSRS retiree, single, no dependents, and have slightly less than $100,000, so not a huge amount. I spoke with a bank, and their advice was to withdraw the whole sum and roll it over into an IRA, which would be a Mutual Fund with a management fee of 1.6 percent. My thinking is that it would be better to take a…
Q: The letter from Treasury Secretary Tim Geithner to Harry Reid said that they could suspend re-investment of the G-FUND if the debt ceiling was not increased. How would this impact the G-FUND? A: This has been done before and the government will make up any losses, so there should be no affect on participants’ accounts.