Author Mike Miles

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

Q. I am 68 years old retired and a FERS retiree. Currently, my wife and I do not need my TSP retirement to withdrawal. We know we need to start withdrawing at age 71½ and we will probably set up a monthly payments from my TSP account (not annuity). However, if I die before 71½, can my wife still receive the monthly payments? A. Your TSP required minimum distribution will begin when you reach age 72. As long as your wife is the beneficiary of your account, she will be able to take money from it after your death.

Q. What agency would I need to seek remedy on requesting a TSP withdrawal with paying no federal tax and the IRS withdrawal penalty? I am a 58-year-old FERS employee with four years to go before I can retire. I can get a TSP withdrawal at age 59½ years old without paying the IRS penalty, but I need the money now due to immediate financial needs, including not paying the federal/state taxes and penalty.  A. Since you are currently eligible to contribute to the TSP and are under age 59½, there are only two ways to remove money from your…

Q. What is considered a good percentage to withdraw from your TSP beginning at age 56? I’m married, so we have dual TSPs and dual pensions. Is there a formula that is generally accepted? I was considering 3 to 4 percent a year and have my funds in the L2020 and L2030 at this time. A. There is no generally safe rate higher than zero since the answer will depend upon how you manage the money along the way.

Q. To calculate the monthly installment and figure how many months before you deplete your account, what is a reasonable rate of return to insert into the calculator? Or is there a better way to figure this out? A. You’ve pointed out the problem that makes this calculator useless at best and dangerous at worst. Competently run Monte Carlo Simulation is needed to figure this out. Without that and some corresponding account management, you should consider using your funds to buy a fixed immediate annuity to provide lifetime income.

Q. I’m a non-career SES (presidential appointee). How many years must I work in the federal government to be eligible for a FERS-FRAE pension and for the entire 5 percent federal contribution to my TSP if I am involuntarily separated? A. Most FERS participants are vested in Agency Automatic (1 percent) Contributions after completing 3 years of service. FERS employees in congressional and certain noncareer positions become vested in Agency Automatic (1 percent) Contributions after 2 years of service. BRS members become vested in Service Automatic (1 percent) Contributions after 2 years of service. If you leave government service before…

Q. Does it make since to invest in more than one TSP L Fund? I will be retiring within the next 5 to 10 years. I have a portfolio value of $420,000. I moved all of my money from 75 percent C stock fund and 25 percent F bond fund to 100 percent G fund trying to protect my assets during the first week of January to plan for a market correction. The market is still doing well and I regret that I moved all money to the G fund. I am going to move all money to the L2030 fund,…

Q. I’m a CSRS employee with an active TSP account, but I have not contributed to my account through payroll deductions in several years. I’m over 60 years old and eligible for catch-up contributions. Can I make a one-time cash contribution this year and, if so, what is the maximum amount? I’d like to move funds from a low-paying IRA savings account into TSP for better returns. A. You may not make a lump-sum cash contribution to your TSP account. Your options are payroll deferral or transfer of qualified funds from an IRA account.

Q. My late husband was a FERS retiree when he passed in 2017. I am also a federal employee, but am under CSRS. I’m planning to retire soon, and am wondering if I have our TSP funds in the correct L Funds. I was told it should correspond to your retirement year, but just read that it should be based on my life expectancy. Which is accurate? Also, is it correct that if I withdraw from my husband’s TSP it would not be subject to the 10 percent penalty? A. There is no “accurate” or correct way to choose an…

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