Q. I have a two-part question. I am a federal firefighter and, as of December, I will have 25 years and 10 months on the job and I am 50 years old. What is the salary they will be basing my retirement on: base pay or actual pay? When can I collect my Thrift Savings Plan? I would like to receive checks like a retirement. A. Mike: You may begin withdrawing your TSP balance, or use it to buy an immediate annuity, as soon as you are separated from service. Reg: Your annuity will be calculated using your basic pay.…
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 plan to retire Jan. 11, 2014. I would like to maximize my Thrift Savings Plan contribution. If my calendar is correct, Pay Period 1 of 2014 starts Dec. 16 and Pay Period 2 on Dec. 30. How much can I contribute in pay periods 1 and 2? My entire paycheck? More? How do I do that? A. You may contribute your entire paycheck until you reach the annual contribution limit. Submit forms TSP-1 and/or TSP-1-C to make your request.
Q. I turned 70 years old in July and have been a CSRS retiree since 1997. I started the required minimum distributions in September 2012 from the Thrift Savings Plan and an IRA with DWS Scudder. Monies were invested in the G Fund with TSP and the DWS GNMA S Fund, which are very low risk. Before retirement, I felt more comfortable taking risk. I started withdrawing RMD only because I had to avoid penalty. My main concern at this stage in my life is to face as little risk as possible and to at least maintain my balance with minimum losses. My IRA…
Q. I have power of attorney for my military retired son who is not employed and only receiving retirement benefits, as well as undergoing a divorce. There is just not enough money to go around. I am paying what I can with his funds, but there is one large debt that there is no way to make payments on (they’ve refused what little is available) since he is only getting half of his retirement income due to the pending divorce. He has an IRA and a Thrift Savings Plan account. Would the creditor be able to take the TSP monies?…
Q. I had the same concerns as the person who you answered Aug. 8. He is trying to follow a bucket strategy and not sell off equities in a down market. I think there is a way to do this in the Thrift Savings Plan, but it is more complicated than I like. Suppose you have $400,000 invested equally in G, C, S and I. Assume your required minimum distribution is $12,000 or $1,000/month and it is paid on the first of each month. On the last day of the month, before 1200 Eastern time, transfer $300,000 to the G Fund. Money transfers…
Q. After entering my Thrift Savings Plan earnings in the Employee Benefits Information System profile, it shows my TSP annuity is $2,000 per month if I retire at age 56 (my minimum retirement age). What is the $2,000 based on? Is it $2,000 until I die, or only until I reach a certain age? A. It could be your life, your joint life with a partner, or a minimum of 10 years, depending upon which annuity option you choose.
Q. I plan to start withdrawing a specific amount each month from my Thrift Savings Plan account next year. Will my withdrawals be taxed by my state of North Carolina? A. From the North Carolina Department of Revenue website: “If you received retirement benefits as a former employee of the State of North Carolina or any of its local governments or as a former employee of the federal government and you did not have five years of service with the government as of August 12, 1989, you may deduct the amount included in federal adjusted gross income or $4,000, whichever…
Q. 1. I am retired at 52. If I take a life expectancy withdrawal through the Thrift Savings Plan from now until I reach 59½, can I then roll over the balance of my account to a privately held traditional TSP such as Vanguard? Or does taking the life expectancy withdrawal through the TSP commit me to them for life? 2. If I receive life expectancy withdrawals now through the TSP, can I still take a partial withdrawal (amount of my choosing) when I am 59½ without the 10 percent penalty? 3. If I roll over my entire TSP account now to a…
Q. I have eight years and nine months of government service and had my entire Thrift Savings Plan contribution in the G Fund until about two weeks ago. I had around $50,000, and I moved that $50,000 into 40 percent C Fund, 40 percent S Fund and 20 percent I Fund, and moved my contribution from 100 percent G Fund to 50 percent S and 50 percent I. I am 34 and have probably 25 to 30 years of service left. How would you rate my contribution move? A. To rate it, I’d have to clearly understand your goals for the money…
Q. I understand why you defend leaving your money in the Thrift Savings Plan because of low expenses, security, protection from lawsuits, etc. However, how do you address the issue of “locking in losses” when withdrawing money in retirement from the TSP? For example, in an IRA, I can have (for a basic portfolio) a cash fund, an income fund and an equities fund. I know I can do this in the TSP, as well, G/F/C or S, but the primary difference is when I go to withdraw my money, in the TSP it comes out of all of these…