Q. I’m trying to find out whatever happened to the additional TSP fund options (additional mutual funds offering more diversity for an additional cost) that were supposed to be offered. Also, I understand that the I Fund will be based on a new index. How will that impact it? A. I can find no official word that either of these proposals is being implemented.
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 retired from the military in 2009 with 20 years of active service, then entered federal service in 2009-2012. I resigned for 1.5 years due to medical, then returned to federal service in 2014 to present. So, if I depart in 2020, I would have 10 years of federal service. What is my path to collect a pension for time served and how am I impacted by the minimum retirement age? I am born in 1966. If I want to depart federal service before my MRA, can I resign and defer annuity until 62 to forego penalty? If so,…
Q. I hope to retire in 2020 under the FERS retirement system. My spouse is a school teacher, does not pay into Social Security, and is covered by the Ohio State Teachers Retirement System (STRS). Will either of us lose a substantial amount of survivor benefits when one of us passes due to the WEP or GPO? A. The windfall elimination provision does not apply to survivor’s benefits, but the government pension offset may reduce or eliminate your wife’s survivor benefit, if she survives you.
Q. I currently have a TSP account as an FERS employee, with 100 percent is in the L2040 Fund since I started almost 3 years ago. I have a long way until retirement, as I am 37 years old. Someone said I should do the “CSI,” which would be C Fund=40 percent; S Fund=40 percent; I Fund=20 percent, but I’m not sure what that even means. I would like to look forward to a comfortable retirement so suggestions are welcome and much appreciated! A. You should ask the “someone” whether they will take responsibility for the outcomes their advice will produce.…
Q. My understanding is that the TSP lifecycle funds do not change allocation percentages based on projected market trends and changes in risk. For example, a lifecycle fund would not increase the percent in G funds if they thought a bear market was nearing. So, if Forbes is right and a bear market looms, what is the best way to minimize loss in one’s TSP lifecycle fund? Should we drop back from lifetime expectancy L fund selection to actual expected retirement timeframe for our L fund? When is the recommended time to do this? A. Market timing is pretty simple,…
Q. In your May 7, 2018, “Money Matters” blog you provided information concerning the rollover of CSRS Voluntary Contribution Program (VCP) funds into a Roth IRA. Can the contribution portion of such funds (non-interest, after tax portion) be rolled over into the Roth TSP? Form RI 38-124, referenced in your earlier column, suggests not, but the most current version of that form predates the creation of the Roth TSP. Such a rollover would be particularly attractive in light of the ability to designate TSP withdrawals as traditional, Roth or a proportional amount of each, with the new withdrawal flexibilities coming to…
Q. My husband is a CSRS retiree. His Social Security benefit was reduced due to his receiving a pension. I am at full retirement age and plan to apply for Social Security based on his earnings since I do not have my quarters met. Will my Social Security be based on his benefit before the reduction or will mine be based on his reduced amount? A. This is a question for a Social Security rep, but it is my understanding that your spousal benefit will be calculated based on your husband’s windfall elimination provision-reduced benefit amount.
Q. I understand how and why the L funds such as the 2020, 2030 and 2040 adjust themselves as you get closer the target date. I don’t understand why the L Income Fund adjusts itself, since isn’t it the consistency of the Income Fund that retirees are after? A. The stated goal of the L Income Fund is “to achieve a low level of growth with a high emphasis on preservation of assets.” I can’t tell you why they decided to use this method to achieve this goal, since it isn’t necessary, but that’s the way it is. Remember that…
Q. I retired from my dual-status job on Dec. 31, 2018, at the age of 53 in Mississippi, which is below my minimum retirement age. Am I able to collect from my TSP plan without paying a penalty since I am under my MRA? What are the laws that govern this for my CPA to use at tax time? A. If you receive a TSP distribution before you reach age 59 ½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10 percent of any taxable portion of the distribution not…
Q. If I retire from civil service (under FERS) and I return to work as a civil servant at a later date, I know that my annuity will be subtracted from my pay. However, will I be able to contribute to TSP again? If so, can I contribute to my original TSP account or would I have to start over with another account? A. You will allowed to contribute to the TSP for during any period of eligible employment under TSP’s rules: https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/index.html. A new TSP account will be opened for you when your are eligibly employed.