Q. I’ve been in the government for four years (retired Army) and have invested in the Thrift Savings Plan since 2009. I plan to retire from the government in 2020 with 11 years of service (I’ll be 58). My TSP portfolio is diversified but certainly heavy in the C and S funds. To avoid the losses all experienced several years ago, what are the recommended allocation moves, within funds, that one should take during what appears to be a stock market selloff that has started in August? A. Unless you plan to withdraw and spend all of your money within the next few…
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 took out all of my money from my Thrift Savings Plan and put it in an IRA. Now I have lost a lot of money. I retire in January. Can I have the bank put my money back in my TSP account? If so what do I need to do to make this happen? A. You should be able to do this if your TSP account is still open. If you emptied it earlier, this is no longer an option for you. You could, however, move the money to a discount broker and use Exchange Traded Index Funds…
Q. How will Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay affect my retirement benefits in regard to the Thrift Savings Plan and what I do with the money in the TSP (when do I have to take withdrawals, etc.)? I am a Defense Department civilian, age 53, with 35+ years of service under CSRS. A. Early retirement does not affect the rules governing access to your TSP account. The usual rules apply and they can be found at www.tsp.gov. In particular, you should understand the information contained in this notice: https://www.tsp.gov/PDF/formspubs/tsp-536.pdf. You’ll be subject to the early withdrawal penalty unless…
Q. I plan to retire in December 2014, when I will be 60 years and six months old. I plan on drawing the special retirement supplement for about 1½ years. I would be taking approximately $1,000 a month from my Thrift Savings Plan. Would the amount I receive from TSP be counted as earnings toward my $15,000 yearly limit? Also, when I start to draw my regular Social Security check, will the amount I receive from TSP be counted as income also? A. Mike: Your TSP withdrawals are not considered earned income for the purpose of means testing either the…
Q. I’m nearing retirement and have a Thrift Savings Plan loan. If I decide not to pay off the loan but to pay the taxes on the taxable distribution, am I still eligible for the one-time partial withdrawal after I retire? A. A declared taxable distribution does not violate the TSP’s eligibility requirements for taking a partial withdrawal after separating from service.
Q. I will be a 56-year-old CSRS employee with 33 years in service and 2,842 hours of sick leave. Since I contributed to the Thrift Savings Plan and plan on doing a one-time complete withdrawal, will I incur a large tax penalty? A. If you retire at age 56, you will not be subject to penalty for withdrawing money from your TSP account.
Q. I’m a Defense Department firefighter (special category). At what can I withdraw my Thrift Savings Plan without incurring any penalties? A. If you’ll settle for specific monthly payments, you can withdraw it any time after you separate from service without penalty. If you want a lump sum or monthly payments that don’t fall within the limits imposed by Internal Revenue Code section 72(t), then you’ll have to wait until you reach age 59½ unless you separate from federal service during or after the calendar year in which you reach age 55. In the latter case, any withdrawal you make…
Q. I’ve been retired for a few years and I’ve put 100 percent of what I have in to the C Fund that was closest to my life expectancy. I know I can’t purchase any more shares and that the way I make money is for the value of the shares to rise. I’ve been told that if I roll my Thrift Savings Plan account over to a company such as Fidelity, Schwab or Vanguard my monthly dividends would buy more shares and not only would my funds increase but my shares would too. A. I don’t see a question…
Q. How long after I retire do I have to repay my loan? Is there time to take a partial payment from the Thrift Savings Plan at retirement to pay the loan? A. You have 90 days following your separation to repay the loan. It doesn’t make sense to take a partial withdrawal to repay the loan, since any unpaid balance will be declared a taxable distribution when the deadline is reached but won’t count against your once-in-a-lifetime limit on partial withdrawals.
Q. My husband asked me to get a paper notarized and sign stating that I waive my rights to 50 percent annuity and so forth. Is he trying to keep me from any of it, or is that the only way to receive his withdrawal? A. You need to read and understand what you’re being asked to sign before you agree. In certain circumstances, the only way he can withdraw the Thrift Savings Plan money is if you agree to waive your claim for a survivor annuity. You have a right to certain benefits from his TSP account. If you…