Q. I plan on retiring in September 2014. I bought a house in November 2012 and need some remodeling done. If I borrow from my Thrift Savings Plan ($10,000), will I have to pay back the full amount borrowed prior to retiring? A. You’ll have to pay the money back shortly after you retire or it will be declared a taxable distribution.
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Q. Why would you recommended keeping money in TSP, when, with the possible exception of the G Fund, you can replicate the S, I and C via the use of low-cost exchange-traded funds. The IRA provides much more flexibility regarding withdrawal of funds and many more investment choices — stocks, ETFs, MLPs, real estate investment trusts, to name a few. A. To reap the benefits of the strategic use of the G Fund and the much lower costs. I know the benefit of these. You haven’t specified the benefit of the securities you mention. There may be times when you must…
Q. What are the negatives and positives as far as changing a Thrift Savings Plan account to a Roth IRA? A. The negatives are that you have to pay taxes now and that you’ll likely incur higher investment costs, greater investment risk, or both in a Roth IRA. The positives might include an advantage if your tax rate rises sufficiently between the time you convert and the time you ultimately withdraw your money from the Roth IRA.
Q. I have money in the Thrift Savings Plan. I am 68 and hope to work for two more years. I have recently been diagnosed with small brain outages. I can’t remember very small things without written notes. I need to know if my TSP will be OK if I have to go to a nursing home. In one of your comments, it seemed like it would. But, I know the nursing homes are going to come after all I have. Is there any way I can save this money, or should I go ahead and give it away? I…
Q. I know that you say (almost always) not to pay off the mortgage on retirement with Thrift Savings Plan funds. So when it is a good idea to do so? I’m CSRS Offset ending at GS-14, Step 8 with 32 years of service, $300,000 in TSP, $30,000 in cash on hand, will have no credit card or vehicle debt shortly as we are selling an investment property (taking the tax hit instead of identifying a new investment property because I really don’t want to be a landlord anymore), the usual monthly expenses, and will get the law enforcement/firefighter retirement benefit bump…
Q. I have a two-part question. I am a federal firefighter and, as of December, I will have 25 years and 10 months on the job and I am 50 years old. What is the salary they will be basing my retirement on: base pay or actual pay? When can I collect my Thrift Savings Plan? I would like to receive checks like a retirement. A. Mike: You may begin withdrawing your TSP balance, or use it to buy an immediate annuity, as soon as you are separated from service. Reg: Your annuity will be calculated using your basic pay.…
Q. I plan to retire Jan. 11, 2014. I would like to maximize my Thrift Savings Plan contribution. If my calendar is correct, Pay Period 1 of 2014 starts Dec. 16 and Pay Period 2 on Dec. 30. How much can I contribute in pay periods 1 and 2? My entire paycheck? More? How do I do that? A. You may contribute your entire paycheck until you reach the annual contribution limit. Submit forms TSP-1 and/or TSP-1-C to make your request.
Q. I turned 70 years old in July and have been a CSRS retiree since 1997. I started the required minimum distributions in September 2012 from the Thrift Savings Plan and an IRA with DWS Scudder. Monies were invested in the G Fund with TSP and the DWS GNMA S Fund, which are very low risk. Before retirement, I felt more comfortable taking risk. I started withdrawing RMD only because I had to avoid penalty. My main concern at this stage in my life is to face as little risk as possible and to at least maintain my balance with minimum losses. My IRA…
Q. I have power of attorney for my military retired son who is not employed and only receiving retirement benefits, as well as undergoing a divorce. There is just not enough money to go around. I am paying what I can with his funds, but there is one large debt that there is no way to make payments on (they’ve refused what little is available) since he is only getting half of his retirement income due to the pending divorce. He has an IRA and a Thrift Savings Plan account. Would the creditor be able to take the TSP monies?…
Q. I had the same concerns as the person who you answered Aug. 8. He is trying to follow a bucket strategy and not sell off equities in a down market. I think there is a way to do this in the Thrift Savings Plan, but it is more complicated than I like. Suppose you have $400,000 invested equally in G, C, S and I. Assume your required minimum distribution is $12,000 or $1,000/month and it is paid on the first of each month. On the last day of the month, before 1200 Eastern time, transfer $300,000 to the G Fund. Money transfers…