Q. If I go out on FERS disability, will I still be able to make contributions to my TSP while on disability? If so, will there be matching contributions? A. You may not make TSP contributions from FERS disability retirement income payments.
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Q. I am 50 years old and have been employed with the federal government for more than 20 years. I have an outstanding TSP loan with a balance of around $14,000 from about three years ago. Each month I have difficulty paying all of my bills. I have no problem proving negative cash flow due to years of frozen pay, furloughs, increases in the cost of living including energy, food prices, medical expenses and prior debt. I see no circumstances where these costs will decrease nor do I see my income increasing in the foreseeable future. I need to take…
Q. I am 69 years old and made a small early withdrawal from my TSP. I am thinking of retiring within the next two years and wondered if I should roll part of my TSP earnings into a Roth IRA. What are your suggestions? What type of Roth should I choose, and what amount should I roll over? A. Nothing in your note indicates that there is a good reason for doing this. You will certainly incur higher investment expenses, lose access to the G Fund, and pay taxes at today’s rate. What do you expect to gain in return?…
Q. I am a 49-year-old FERS employee, and I have been contributing to my TSP account for the last 8 years. I am contributing 100 percent to the G Funds because I was told that is safer, but I don’t see my money growing fast enough, and to be honest I don’t really understand the different options available to me. I have at least 13 more years of service before retirement and need to see my money grow faster. Please advise where should I be contributing my money. The options I have are: G Fund Government Securities F Fund Fixed Income…
Q. I’m 58 yrs old with 34 years at the Postal Service. I have about $400,000 in my TSP account. I’m not ready to retire, but I would like to take a one-time withdrawal from my account to use for down payment of a house ($100,000). Is that money subject to a penalty? Do I have to pay it back? Or is it just treated like ordinary income? A. You may take a loan up to the TSP loan limit, which will not be taxed if you repay it on time. You may take an in-service hardship withdrawal if you…
Q. Based on your advice to select the Lifecycle fund based on your expected lifespan, rather than retirement age, I am considering the idea of transferring all of my shares from the Lifecycle 2040 to the 2050 fund. Would it better to do this when the stock market is down or up? A. Of course it will work out better if it is accomplished before the market rises than before it falls. The real question is: How will you know when this is before it has happened? Is the market higher or lower today than it will be tomorrow? The…
Q. At what age can I withdraw my TSP without penalty? I will not have 30 years in the federal service. A. You may do it any age as long as you meet one of the exceptions listed on page 7 of the notice at: https://www.tsp.gov/PDF/formspubs/tsp-536.pdf.
Q. I am a federal employee (FERS employee from January 1988 to the present) who will likely be leaving federal employment for a private sector position in a different city. What happens to TSP? I can either leave my money in the TSP account or roll it over; in any case, I am not touching the balance until I retire. A. You may, and probably should, maintain your TSP for life. Later, when you leave private sector employment, you may, and probably should, move your retirement plan balance(s) to the TSP account and manage it there.
Q. I read the article related to the management fee charged by mutual fund brokers. Is this fee charged annually or monthly? (www.federaltimes.com/article/20140310/MGMT01/303100003/The-TSP-hard-beat) I have been investing in Fidelity in a traditional IRA account for a number of years, but lately I have had to pay taxes on the contributions because my household income has been above the threshold required to get the tax deduction. I was wondering if I could move some of the contributed funds from fidelity straight to the TSP Roth without having to pay taxes again or incur any penalties and still continue saving with Fidelity.…
Q. I am 26 years old and have been investing into TSP (Roth) for about seven months. I am currently investing at just above 10 percent of base pay. I was investing into G Fund at 100 percent and recently moved to the L Fund 2040 at 100 percent. I have zero experience with investing and took this advice from a friend’s parent who has experience. Was this the right move? A. Based only on your age, which is the only relevant clue you’ve provided, I think that the L 2050 Fund would have been a better choice. The person…