Q. Right now I am allowed to contribute $21,500 annually ($16,500 normal plus $5,000 over 50 catch-up) to my government-run TSP. I am also allowed to contribute $6,000 annually ($5,000 normal plus $1,000 over 50 catch-up) to my civilian-run Roth. I am told that when the government Roth option is established I will still be limited to $21,500 total in the government-run accounts however I allocate it? Is this true — it would make more sense if the ceiling stayed the same to TSP, but I could only do a $6,000 for Roths no matter if it was government or…
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. My husband is retired and has a fairly decent sum in the Thrift Savings Plan. He keeps talking about taking it out and investing it in mutual funds, etc. Is this smart or would it be better to leave it where it is? A. It would be better to leave it where it is! Lower costs, efficiently diversified, easy to manage, the G Fund. There’s no better place to invest for retirement income.
Q. My question on keeping my money in my TSP when I retire from the Post Office was answered (yes, I can keep it in until age 70 1/2) Now for the next question: If I decide to keep it in the TSP, can I add to it after I retire? I have heard that you can’t, please clarify this. If the answer is no, what would be the advantage of keeping it in? If the answer is yes, how would you do this, automatic from retirement payments? A. The only way to contribute to your TSP account after you…
Q. Thank you very much for allowing us the opportunity to “ask the experts” through your forum. It can be difficult to get a correct answer at times from the Web. I am an air traffic controller with 30 years government service, and am eligible to retire now at 50 years of age. I currently have a TSP loan with a $2,900 balance outstanding. If I retired now, would I be able to withdraw my TSP account as a lump-sum payment with this outstanding loan balance? Or would I first be required to pay off the $2,900 loan before TSP would…
Q. If I retire at 59, leave my money in TSP and immediately start taking monthly payments, can I leave my money there past 70 ½ and continue drawing monthly payments? Someone told me at 70 ½ I have to take it all out, but that’s not the way I understand it. A. You were misinformed. You may leave your money in the TSP for life, as long as you take the Required Minimum Distribution each year after reaching age 70 1/2.
Q. Age: 56 (will be 57 in July 2011) Service comp date: May 1983 Hired: July 1984 Retirement: FERS from the start Break in service: May 2007-February 2009 (about 22 months) Military: USMC 1975-1978 (“bought” the time) VER Authority: Application deadline and irrevocability date 4/25/2011 Effective date 5/31/2011 RIF Effective Date: Sept 9, 2011 Questions ========= If I lost my job on Sept. 9 (with 28 years and about four months service) and took a discontinued service retirement, would I be eligible for: a) Annuity supplement (Social Security offset) b) No “+ 10” reduction of my FERS annuity c) TSP…
Q. What are the answers to the below questions if under age 55? For instance, taking a early retirement option at age 53 — how would the TSP 10 percent penalty apply using the original scenarios in the question?? Original question: Q. I have read many of the articles and TSP literature and I am still a bit confused. As a federal law enforcement officer over age 55, I plan to retire later this year. I have read that if I want to take withdrawals from my TSP account prior to age 59½, I can do so without having to…
Q. I am exploring the idea of retiring from the postal service as a CSRS with 32 years at age 55. Can I just leave my money in the TSP? Some answers I read say you can keep it in, but I have also read that I have to withdraw it when I retire. I prefer to leave it and not touch it for at least 10 years. So what is it? A. You can, and should, leave your money in the TSP until you have to begin withdrawing it -– usually at age 70 1/2.
Q. I am still employed by the federal government and am 63 years old. Am I permitted to transfer a portion of my TSP to an traditional IRA now, before I retire? I expect to retire in December. A. You may take a single age-based, in-service withdrawal and transfer or roll it over to an IRA.
Q. What fund diversification strategy percentages would you recommend for low to moderate risk tolerance for my TSP account? I am 57 with 27 years of FERS service. I plan to retire at age 60. I currently have $425,000, all invested in the G fund. I moved it to the G fund in October, 2009 after recouping all my losses of 2008. I figured the market would tank again and I would jump back in to take advantage of low share prices. Obviously, I was wrong. I want to get back into the riskier funds to maximize my returns without…