Q. Why was MetLife chosen as the entity to provide an annuity for the TSP? Are there provisions or protections for federal employees that were negotiated? I asked that question of the TSP and they stated that there was no one within TSP or MetLife that I could talk to. Finally, most forums seem to discourage annuities — they suggest that we stay in the TSP and take monthly allotments. Comment? A. The FRTIB chose MetLife, so they would be the ones to explain why. I don’t know of any special protections built into the deal. Once you buy the annuity, it’s…
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’ve heard conflicting reports about TSP withdrawal and would like to get an answer about my particular situation: I have 22 years with the Bureau of Prisons, and I’m eligible to retire any time. I will be 55 years old this year, but I want to work until 2016 (mandatory retirement age of 57). Can I withdraw a portion of my TSP while I’m working to pay off some debt (which is not a hardship case) and take the penalty, and at the same time, leave the rest in the TSP until I separate from the BOP? A. No, the only…
Q. I’ve been getting mixed advice regarding my voluntary contributions options. I was planning to ask OPM to send the (post tax) VC contributions to a new Roth IRA so I can more easily track the five-year holding requirement, and send what minimal interest accrued during the brief time the account will have been open to my TSP (if OPM will transfer such a small amount) or simply let them withhold 20 percent and send me the accrued interest. However, I also have a small basis in an old traditional IRA because of a recharacterization several years ago, and now…
Q. I am FERS-covered and plan to retire in August at age 62. I am now front-loading my TSP contributions to the maximum (including the $5,500 catch-up which I have already contributed). At retirement, I plan to roll over all my TSP balance to an outside IRA account. Questions: 1) Will I be able to roll over the: a) Traditional TSP portion to a traditional IRA account? b) TSP Roth portion (which I started in 2013) to an outside established Roth IRA account? 2) Shall I now contribute the remainder (about $12,000 of $17,500) to the TSP Roth so that…
Q. I retired (at age 72) from the Department of Labor on Jan. 31. I have $368,000 in my Thrift Savings Plan invested — 40 percent G fund; 20 percent C fund; 20 percent I Fund; and 20 percent S Fund. The combined interest yield for 2013 was $85,000 (a 12 percent gain). I was thinking about drawing out $5,000 a month for 10 years and depleting the fund. If I take a monthly deductions, I computed the interest earned for a 10-year period at 10 percent. This will expand the fund each year until it is paid out in…
Q. Can you transfer unused annual leave into your TSP fund at retirement? A. No.
Q. I’m retiring in one year. I’m 66 years old with $617,000 in the 2020 L fund. I plan on taking level payments from the TSP. Should I leave the the funds in the 2020, move them to the L income fund, or move them to the 2030 fund based on my life expectancy? A. The correct answer to your question will depend upon the size of those level payments and whether or not the payments may need to continue after your death. There is no one-size-fits-all-for-a-66-year-old solution for this. The answer is different for different circumstances.
Q. My name is Tom Archer. I currently work for a federal agency and plan to retire at age 57 under the FERS program. I did not buy back my military service, so I will only have 17 years with my current agency. If I fully withdraw my TSP funds at that time, what, if any, penalty will I incur? A. None.
Q. My total salary is a combination of my base pay and my market pay. Are my Thrift Savings Plan contributions deducted from my base pay, market pay, or are they deducted from my total salary — base + market? A. Total salary.
Q. Is it possible to take a partial withdrawal from the TSP, say $100,000, and then reinvest the majority of the withdrawal into a separate IRA within the 60-day limit? I would like to buy another house, using cash from my TSP account, then take a home equity loan on 70 percent appraised value and reinvest this money back into a separate IRA. My hope is to reduce taxes. I am 62 and retired. A. Yes.