Browsing: Investing

Q. I am a federal employee and have been eligible to retire for a while, but I wasn’t ready until now. Within nine months I will have retired. I am one that converted way back when from CSRS to FERS. I am 67 and a half years old (already drawing my SSA, which I started at 65 when I reached 100 percent) and will be 68 and a half years old when I retire. Within 2 years after retiring, I will be required to start taking my minimum withdrawals. Several things: I am concerned with the recent money market fluctuations and…

Q. I am under FERS and 43 years old. I have been working for the government for the last six years at the GS-13 level and plan to retire after age 71 after 34 years of service. I currently contribute the maximum to traditional TSP and have $370,000 in TSP (about 90 percent invested in C, S and I funds, and 10 percent invested in F and G funds). Even if I switch to a Roth TSP, I can still contribute the maximum allowed each year including the maximum catch-up contributions allowed. Under these circumstances, wouldn’t it be beneficial to switch to Roth TSP? I…

Q. I’m a federal employee within about 5 years of retirement and am wondering about whether to revise the distribution of funds in the L 2020 fund in which I’m now invested ($127,000 balance). I was just told the rate of return in the G fund (to which the L 2020 fund currently allocates 44 percent) is quite poor and that I should consider reallocating funds out of the G fund — perhaps concentrating on the C, S and I funds. However, I’m aware of the need to invest conservatively with this short time horizon. Under these circumstances, would you advise…

Q. I am 61 years old and single. I have about $146,000 in TSP and $183,000 in another retirement account, which is managed by my financial planner. I plan to work another 5-6 years. Would a Roth IRA be something I should consider? Or would it be wiser to just continue on in the regular tax-deferred TSP? I am still paying my mortgage but will have the rest of my debt paid off by the end of the year. A. Of course you should consider it — and all other reasonable options available to you, but that doesn’t mean you should…

Q. I’m planning to retire as a federal law enforcement officer in March 2016 at age 50. I currently have all of my TSP invested in the L2020 fund. Others at Federal Times have recommended using the Lifecycle Fund that matches your life expectancy versus your target retirement year. I will be taking 72t life expectancy payments from my TSP beginning at age 50. Should I consider moving my TSP into the L2030 or L2040 funds? Is this more likely to make my TSP balance last longer into retirement?

Q. I plan to retire on Aug. 31 under FERS. Will I get a 5 percent matching contribution if I make 5 percent of my last paycheck (payable on Sept. 11) to TSP? Can I contribute 5 percent of my lump-sum pay from the unused annual leave? If so, will I get a 5 percent matching contribution?

Asset allocation is a term that should be familiar to anyone with a Thrift Savings Plan account. It’s everywhere in the investing world, but I have found that few investors understand what it is and what it is supposed to do. This is a serious problem since asset allocation is the main driver of investment performance. Study after study has shown that asset allocation overwhelms things like market timing and security selection in its impact on investment results. The TSP recognizes this and makes allocating your investment assets about as easy as it could be. Before you can use asset…

Q. I am a law enforcement officer planning to retire next year at age 50. I have a pretty good sum in my TSP and would like to take life expectancy (72t) payments. Two financial advisors have told me I shouldn’t need this money (after reviewing my expected income and expenses) and advised against taking the distributions. What is the downside of sticking with life expectancy payments for 10 years if I am invested correctly? It seems to me, assuming a greater than 5% return over this period, I should never touch the principal. Currently my TSP is fully invested…

Investing for retirement income is very different from investing purely for growth. As you approach retirement, there is rarely any good measure of the quality of the investment decisions that got you where you are today. You probably have no way of knowing what the mistakes you made yesterday have cost you today. Investing for retirement income is much more an exercise in avoiding mistakes, than an exercise in maximizing the potential for gains. Avoid the following common mistakes and you’ll be well on your way to maximizing the standard of living you’ll enjoy throughout your retirement. This list of…

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