Q. I am interested in buying a franchise. I am 61 and plan to retire in 2014. Can I withdraw my money without it being taxed for this type of investment? A. No.
Author Mike Miles
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 a 55-year-old Postal employee planning to retire sometime in the next year under CSRS. Many years ago, I purchased a $2,000 Vanguard IRA that has grown to more than $40,000. I also have a separate similarly valued Roth IRA. I know that I can begin penalty-free withdrawals from TSP after separation, but can I roll my Vanguard IRA into TSP? I also know that I cannot roll my Roth into TSP. My desire is to have the money accessible before 59-1/2 and to avoid having three pots to withdraw MRDs when I’m 70-1/2. Any suggestions? A. You…
Q. I am 67, and I plan to work two more years. I am collecting my Social Security. My TSP is invested in the G fund, and I panic every time I invest elsewhere and the market goes bust and I lose $6,000 in one day. Should I diversify or stay in the G fund so close to retirement? I have diversified in the past and lost $52,000 in 2008. A. It sounds like you’re not qualified to manage a retirement investment account. You should either stick to the G Fund, buy a TSP annuity or find a trustworthy investment…
Q. I will retire in two years. If I leave my money in the TSP, what happens when I reach 70-1/2 and I am forced to pay a certain percentage of my savings out every year due to my age. Does that mean I would have to pull all my TSP money out (pay taxes on it) to transfer it to another account in anticipation of the yearly deduction? A. If you begin monthly distributions using form TSP-70 during or before the year you reach age 70-1/2, the TSP will automatically distribute the required amount each year. There is no…
Q. I work for the BOP and I am 10 months away from being forced to retire with 20 years of service. A few years ago there was talk around work that the age restriction was going to be raised, and it seems that was wishful thinking. I just accepted it as a probability because it was raised in the past and that gave me the opportunity to get hired. I took out a loan against my TSP account anticipating the age requirement would go up and as a result, unless something does change, I will most likely have a…
Q. Will TSP only pay out over a 30-year period? If so, then what happens to the money if I happen to pass away at 70? Can a beneficiary be set up so the rest of the money in the TSP will be paid out?? A. The TSP does not limit monthly payments to 30 years. If you pass away at any time, your account balance will be paid to your beneficiaries. I suggest that you review the information available at www.tsp.gov and then ask a specific question that is not answered by the literature.
Q. I’m trying to decide how to withdraw my TSP. I really do not need the income at this time. I’m 60 years old with no dependents or heirs. I have about $240,000 in my TSP. Is it possible to buy a life annuity with half now and take monthly payments later? I was also considering a life annuity with increasing payments and 10-year certain. Or would it be better to do monthly payments? From what I understand, I can adjust the payment once a year.
Q. I am 65 years old. I have been employed in the federal government for nine years. At this late stage and age, should I join TSP. A. If you’d like to save money for your use later in retirement, yes.
Q. I’m 26 and I’m planning to get out of the Army next year. If i withdraw all the money and stop my TSP account after leaving the military, would I be charged for anything? If yes, what would it be ? A. You will be subject to income tax and the 10 percent early withdrawal penalty unless you qualify for one of the exceptions on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
Q. I have reviewed information at the TSP website. I have been unable to locate information regarding survivor benefits in the case of a nonannuity, monthly distribution without 10-year certain enabled. What are the rules in this most simple TSP account distribution plan? A. If you die while receiving automatic monthly payments from your TSP account, the payments will end and the remaining balance in the account will be distributed to your beneficiaries.