Q: I have a question about the limited withdrawal options in the TSP. I’m 58 and retired with an early-out from the Postal Service. I took out a few thousand to get my retirement started and I’m leaving the balance in until I reach 62 1/2. My main reason for this is the low fees of the TSP. The snag is that I’d like to make further withdrawals for certain investments, side businesses, etc. Not a lot, of course, as I would never stupidly blow through my retirement, but the TSP has their second withdrawal as an ‘all or nothing’ option…
Browsing: retirement
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?
Here’s a pop-quiz question for you: How many partial lump-sum withdrawals are you allowed to take from your Thrift Savings Plan account during your lifetime? Go ahead, write down your answer. Everyone knows that the answer is one, right? In fact, that is the stated limit in every TSP publication that I can remember seeing. This limit is also one of a number of common reasons that TSP participants decide to roll their account assets from the best retirement investment vehicle in the United States into an individual retirement account after retiring. But, while the TSP’s withdrawal restrictions are inconvenient,…
Q. I am a military technician and was told I’m under a special military technician early retirement 50/25 and will have 34 years of service, 4 years of which was active duty. I bought back my time and plan to retire in December. I will be 54 years old. If I start withdrawing from my TSP, will I be penalized 10 percent because I’m not 56 years old yet?
Q. I’m a young federal employee, about 30 years old, trying to plan for retirement. Some of the literature on saving out there sets goals, either in dollar amounts such as $130,000-$200,000 by 30 years old, or in terms of salary such as one year’s salary by 30 years old. I presume these are geared toward private sector employees who do not have a FERS component to their retirement planning. I understand FERS changes the numbers, but I’m not entirely clear on how to factor it into my retirement planning goals. Are there any similar guideposts for our TSP you…
Q. My question is about having a TSP loan at time of retirement. I understand that if you don’t pay in full within 90 days, it is dispersed as income and subject to taxes and penalties. When it is dispersed, does it count as one of your allowable withdrawals?
Q: My concern is what happens to my TSP account upon my death (when in retirement); while I understand it will go to my listed TSP beneficiaries; will they have an option to take the money over time so as to not be burdened with immediate taxes. Similar to the way on can take an inherited IRA?