Browsing: TSP

Q. I will turn 60 next year and plan to retire with 30 years of service. I am invested in the L2020 Fund. Upon retiring, can I stay there or do I need to move my money? A. You may keep your TSP account, and manage it as you like, for life.

Q. I know TSP funds can be rolled into an IRA, and IRA funds rolled into TSP. Is there any limit on how many times money can be moved back and forth? A. There is no limit that I am aware of.

Q. I currently have all my TSP balance ($210,000) in the L2030 Fund. I will retire in 2030, but will not be withdrawing any money (hopefully) until about 2040. I would like to move to a little more aggressive L Fund. If I move some or all of my L2030 fund balance to L2040, will I lose any money in the move? A. There is no cost assessed against your account to transfer your funds among and between the various TSP investment options.

Q. I am a 51-year-old retired federal employee with 27 years of service. I retired on 12/31/18. I served 25 years in a covered federal law enforcement officer position, then transferred to a non-covered LEO position with another agency for the remaining two years. I do receive the LEO FERS retirement. My issue is with the TSP withdrawal options. According to the Defending Public Safety Employees Retirement Act, effective 01/01/16, any federal public safety official, such as LEO, who separate from service at age 50 or older could make penalty-free TSP withdrawals if they retire after 12/31/15. In order for…

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.

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 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. 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…

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