Q. I am looking to see if it is too late to move money to a life cycle fund. I am 52 years old and in federal law enforcement; I am trying to go to mandatory age 57. Which fund would be best to move to? I’m trying to decide if I should draw monthly at 57 or wait until 62 when the supplement ends. When is the most productive time to move (market down or up)?
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 am 64 years old, retired under CSRS and receive a pension of $3,954 dollars monthly. I paid enough to be eligible for Medicare, but I don’t have enough quarters to receive Social Security benefits on my own. My wife is currently receiving a Social Security pension of $1,359.90 monthly. Am I eligible for a Social Security Spousal benefits?
Q. I’m considering taking a 59 ½ age-based partial withdrawal from my TSP while still employed. What is available to me – just the money I’ve contributed, or the money I’ve contributed plus the amount contributed by the government?
You may have heard of the “4 percent rule” or one of a variety of its variants. Whether it’s the 4-percent rule, the 4.5 percent rule, the 3.14159 percent rule, or any other version of this legendary piece of retirement planning wisdom, the basic premise is the same. This rule is supposed tell you how much you can safely withdraw from your savings and investment portfolio in retirement without risking running out of money before you run out of life. The problem with the 4-percent rule, and the reason that I am writing about it here, is that it’s unreliable…
Q. Does one have to completely pay back TSP loans before one retires? I will have 30 years and 5 months of work under my belt and be 56 years old this month.
Q. I have been investing in the traditional TSP during my entire career. I have approximately $585,000 in my account and plan to retire at 62 years old in 5 years from now. I’m contemplating changing my investments from the traditional to the Roth in order to lessen the tax burden later on in retirement when required minimum distributions kick in. My wife is self-employed and has been funding a Roth annually for the past 10 years. I began funding a Roth last year and we both plan to continue to fund a Roth for the next 5 years. Do you…
Q. My TSP account distribution percentages are G: 45; F: 5; C: 31; S: 5; and I: 14, all totaling $556,000 and $10,000 in a Roth. The TSP return from the past 12 months has been -0.29. I’m thinking about retiring this year at the age of 62, and I need $25,000 from the accounts plus increases based on inflation for 30 years. I plan to keep TSP in retirement. What changes in allocations do I need to meet these needs? Do I change to L2040?
Q. I retired at age 55 under CSRS offset. When I turned 62 I had to start drawing from Social Security. My husband is going to be retiring soon at FRA. Am I entitled to half his Social Security?
Q. I understand that I can take a TSP loan just prior to retirement, not pay it and have it become a taxable distribution after 90 days. If the 90 days fall after the first of the year, will the tax be on the new year income or at the time of the loan? I’m a rehired annuitant, if that matters.
Q. I understand you’re a proponent of leaving your money in the TSP at retirement, mainly due to low cost. However, are there benefits to rolling it into an IRA? I’m thinking along the lines of inheritance for my beneficiaries. I thought I read once that the options for beneficiaries are more restrictive with TSP. What are the advantages and disadvantages of the two choices? I am a FERS retiree who is 62 years old.