Browsing: Investing

Q. I’ll retire under FERS at the end of this year. Will the lump-sum payment for annual leave that I’ll receive early in 2015 would be considered earned income for the purposes of being able to contribute to my non-TSP Roth IRA? A. No.

Q. I understand I am allowed to roll or transfer other 401’s or Roth IRA’s into TSP, but can I just invest money saved in traditional savings accounts into my TSP? A. While you may transfer certain qualified tax-deferred retirement assets into the TSP, Roth IRA and taxable savings are not eligible.

If you had just enough money to pay your electric bill next month, would you gamble with it just for fun? Hold it in cash, and you’ll enjoy another month of electrified living. Lose even part of it, and you’ll be living in the dark for a while. If the sole purpose for that money is to pay for the electricity you’ll need to live the life you want, why would you risk losing it to have a chance to win money you don’t need? Many investors don’t understand the principles and techniques necessary to manage a retirement investment portfolio…

Q. I have three IRA accounts and I turned 70 in March. Do I combine the three to figure the required withdrawal? What would the tax  be if I do a lump-sum withdrawal from all three? A. You must obey the aggregations rules for calculating your IRA RMD spelled out in IRS Publication 590. The taxable portion of each withdrawal will be added to your tax return as ordinary income for the year, where the tax you owe on the withdrawal will be calculated. Whoever prepares your tax return for the year of the withdrawal is responsible for making sure…

Q. I retired nine months ago after 35 years of federal service. I am a CSRS annuitant. I am unsure of the best avenue to take regarding the opportunity to withdraw all or some  of my TSP when I am 59-1/2 (I will be 56 in August). Like any investor, I am worried about the repeat of the 2008 stock market failure. I am considering withdrawing half of the balance and moving it into my money market account and converting the balance into a lifetime annuity.

Q. I am 25 and I am almost at the four-year service mark. I have been contributing since I started working for the federal government as a GS-07 at 5 percent. I am a GS-12 and started contributing 15 percent about five months ago (10 percent ROTH). My current allocation is 50 percent in C and 50 percent in S. I am trying to diversify my allocations a little better. Please help me with some feedback as to which other categories I should looking.

Q. I am a retired federal employee since July 1, 2011. Because of the IRS rules regarding RDA if you’re 70-1/2 years old. I decided to withdraw an annuity of $1,500 each month. What is the best investment as to where to put my $1,500. By the way, this amount is below the 4 percent commonly used by retirees as a yardstick. A. You should invest the money in the safest place that is highly likely to produce a sequence of periodic investment returns that will support your future financial goals. If you’re not sure what that is, I suggest…

Q. I am 67, and I plan to work two more years. I am collecting my Social Security. My TSP is invested in the G fund, and I panic every time I invest elsewhere and the market goes bust and I lose $6,000 in one day. Should I diversify or stay in the G fund so close to retirement? I have diversified in the past and lost $52,000 in 2008. A. It sounds like you’re not qualified to manage a retirement investment account. You should either stick to the G Fund, buy a TSP annuity or find a trustworthy investment…

Investors, as a group, make plenty of mistakes. When it comes to investing, bad decisions are not the exception, but the rule. Investing mistakes stem from a variety of influences: ignorance, gullibility, fear and greed, to name a few. But I find impatience to be one of the most pervasive, and underappreciated, drivers of bad investment moves. The burning desire to act immediately, to do something, anything, right now, underlies many of the bad decisions investors make. The desire to act is part of the American way. We’re all responsible for our own fates, goes the thinking. Life is full…

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