Q. I’ve worked for the Food and Drug Administration for 18 years. I started investing in the Thrift Savings Plan about 10 years ago and don’t plan on retiring until 2030. I’m investing 15 percent right now, and I plan on doing more. I’ve been advised to invest in the L Funds. But lately I’ve been looking at the F, C, S and I funds, which are doing so much better than the L. I want to switch to the one that’s earning the most. Isn’t the L fund for those who are ready to retire within a couple of years? I’m…
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 have a Thrift Savings Plan loan that I would like to pay off and was wondering if there was a way to do it by transferring funds from my personal IRA. First, would a direct transfer work at all? Is there any way to designate that transfer to count against the loan? Second, since I should pay back the loan with post-tax funds, if I do a rollover from a Roth IRA, can I then put it in the TSP as a loan payment? Because I’m under 59½, will I get the early withdrawal penalty, even though I…
Q. I am 55 years old and retiring from federal service in March. Once I retire, can I withdraw all the funds in my Thrift Savings Plan account? If so, will I have to pay a penalty for early withdrawal of my TSP account? A. You may withdraw your TSP assets after you retire. If you retire during or after the calendar year in which you reach age 55, your TSP withdrawals will be exempt from the early withdrawal penalty.
Q. I am retired (68 years old) under CSRS. We are thinking of refinancing our home and paying off the line of credit. If we include the settlement fees, we will be saving $5,474 per year, recouping our settlement fee within 1½ years. However, if we refinance without including the fees, we will be saving $5,916 per year. My husband wants to draw $8,000 from either his 401(k) (he is 68 also), or draw $4,000 from his 401(k) and my Thrift Savings Plan. I don’t want to touch these for a $42 a year savings. Are there drawbacks at our age to taking…
Q. I assume a high inflation rate is in our near future, based on the high amount of money being printed. I also assume the economy could go into a greater depression when all the corresponding actions take place — high inflation, high interest rates, market crash, possible dollar collapse. Is the G Fund going to be safe through all of this? With it being a government-backed bond, what if the government defaults on all debt and can no longer borrow to keep the economy from collapsing? Is any money in the Thrift Savings Plan safe? Basically, can I move…
Q. I am in under FERS. If I retire after 30 years of federal service at age 58, can I start withdrawing my Thrift Savings Plan, or do I have to wait until I am 59½? I do not have any part of the TSP as a Roth. A. Under the circumstances you describe, you may begin withdrawals without penalty.
Q. Someone asked you online Oct. 8 if they could deposit funds into the Voluntary Contributions Program and transfer “the whole amount” into a Roth TSP. You said “yes.” The poster said they thought they could only transfer interest to TSP. By asking if they could transfer “the whole amount,” I believe they were wondering if they could transfer both contributions and interest. You have said as recently as an answer given on Sept. 24 that “You’ll have to use a Roth IRA for the after-tax portion of the VCP account,” and gave a corrected answer to a question posted…
Q. I’m CSRS. If I deposit funds in my Voluntary Contributions Program, I thought I could only transfer interest gain to TSP. Can I transfer the whole amount if I choose Roth TSP? A. You may not transfer or convert money into the Roth TSP. You could roll the money over to a Roth IRA, however.
Q. Is there any way to manage one’s Thrift Savings Plan account so as to effect a bucket strategy of withdrawal? My reasoning is that not all funds will be up in any one year. I would like to have a three-to-five-year bucket (G Fund) for the lifetime monthly withdrawals and a six-to-10-year bucket for asset growth (C, S and I funds). Periodically, I would move money from the longer-term bucket to the shorter-term bucket. As it stands now, withdrawals come out of each fund based on the percentage in each. My reasoning is that the rock bottom expense ratios…
Q. I received a packet from my previous employer that I needed to cash out or roll over my funds to an IRA or another retirement fund. I’m 48 years old. Where can I put this fund without having to pay a broker or a financial adviser fee? Is there a fund that I can roll this into without upfront fees or an annual fee? A. The best place for this money is your Thrift Savings Plan account. You can use form TSP-60 to request the transfer.