Q. I am a few months from retirement. I have a small residential loan (circa $6,000) that I am still repaying, but would also like to take out some more money from the TSP via a general purpose loan just before retirement. This seems worth it to me, even with the eventual tax liability because I could use the extra cushion while my retirement income stabilizes with OPM. I am over 55, so am only going to have to pay the loan values at my regular income tax rate, money which I will set aside. My TSP account is very healthy, as is…
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. If I retire at 58 this year, and don’t touch my TSP until I’m 60, does the IRS still withhold 20 percent for taxes?
Q. I am a federal law enforcement officer with 25 years of service and I am 51 years young. Can you advise what are my current options and my future options (2017 TSP Modernization Act) to take withdrawals from my TSP account without penalty?
Q. I am a federal employee with 17 years until retirement. I was going to open a 529 college fund for my daughter, but I’m thinking that I should invest that money into my TSP instead … knowing that I’ll retire when my daughter graduates high school. If she gets a scholarship or decides not to go to college, however, the money can be spent elsewhere. Is this a good idea?
Q. I am a current Department of Defense employee with eight years of federal service. I am applying for disability retirement and Social Security Disability Insurance. Can I contribute to my TSP after I am on disability retirement?
Q. I’ve been reading your archives for CSRS Voluntary Contributions Program (VCP) and the strategy of rolling its balance over into a Roth. Since TSP offers such low management rates, a TSP Roth is my intended destination for these VCP funds. But as of your 2012 guidance, the VCP cannot be directly into a TSP Roth, as the VCP is not a “designated Roth account.” Has this guidance changed? If not, then can this still be done by transferring the VCP funds twice – from the VCP into a generic non-TSP (commercial) Roth and from that non-TSP Roth into the TSP…
Q. When you lose money in the TSP C,S or I Funds (during a correction or crash), is it only on paper and only temporary until the market rises again at some point? The only time you really lose money is when you sell in a down market and “lock” in your losses, correct?
Q. I am a FERS employee with 33 years of service and will be eligible to retire at the end of the year when I turn 56. Upon retirement, I would like to keep my 401(k) money in my TSP account, but would like to take out approximately 4 percent per year in monthly payments. Would this be subject to the 10 percent IRS penalty for withdrawals before age 59 1/2?
Q. I plan to retire in September 2018 at the age of 58. Does it make sense to withdraw the max amount from TSP annually and remain in the 12 percent tax bracket or just take the minimum I need and pay more on taxes when I turn 70 and start drawing Social Security and required minimum distribution? If I choose option 1, I would probably invest the extra somewhere.
Q. I have my personal investments with Wells Fargo. Would it be practical to move all of my Wells Fargo investments to the TSP to avoid the 1 percent fees I am charged? I know the TSP is very low cost.