Q. I am 57 years old with 25 years of Veterans Affairs Department service. I plan to leave federal service in April 2013. I would like to resign and postpone my FERS annuity until I reach 60 years old. I would like to start withdrawing from my Thrift Savings Plan soon after resignation. Is this possible to start withdrawals after separation, or must one be in a retired federal service status before starting TSP withdrawals? A. You may start withdrawals after your separation from service.
Q. On Oct. 10, 2009, you said that you could begin receiving fixed payments and switch to an annuity. On Nov. 8, 2010, you responded to a similar question with the opposite advice. I am trying to decide whether to take payments while hoping the providers’ rates improve or go to a fixed index annuity with another company. Is the decision to take payments in the Thrift Savings Plan irreversible? A. My Oct. 10, 2009, answer was incorrect. You may not end a series of automatic monthly payments with a TSP/MetLife annuity purchase. That option is only available when starting…
Q. I have six more years of active duty in the military. I have approximately $62,000 in my Thrift Savings Plan, 100 percent is in the G Fund. What would be the best fund for investment for my age and retirement in six years? A. It’s impossible to say from this information. The correct answer depends upon how and when you plan to use the money.
Q. Effective Feb. 29, 2012, I am a CSRS retiree from federal service; I participated in both the Thrift Savings Program ($201,000), and the Voluntary Contributions Program. I must make an election soon of the funds now in the VCP: $87,637 (nontaxable); $34,682 (taxable). I am married, and I will be 66 years old in October. I (we) do not foresee needing the money from these two sources in the near term. I will likely convert everything to a traditional IRA then Roth IRA in April of the year after I turn 70½, to be left to my son after I…
The availability of buyouts at many agencies and the upcoming elections are among topics prompting readers’ questions related to their Thrift Savings Plan investments. My answers may help other readers with similar concerns: Q. With 25-plus years of service, I qualify for a buyout. If I take the buyout, what happens to my TSP account? May I purchase an immediate annuity or take a lump sum even though I am below the minimum retirement age? Would this cause me to have to wait until I am 59½ to access TSP if I take an early-out? Do you believe the $25,000…
Q. I am 54 years old and I have 30 years of federal service under FERS. Should I start a Roth TSP at age 54? I was born in March 1958. I plan to work until I hit full Social Security, which, I think, is 67 or maybe 66. Bottom line: If I were to start the Roth TSP until retirement at age 67 or 66, which is 13 or 14 years from now, is it worth my time and effort? My current Thrift Savings Plan is about $230,000 as of July. Six years from now, about March 2018, I will be…
Q. I am really confused about the purchase of private annuities and when that is a good idea. I am a FERS employee who just turned 59½. I plan on working for another eight to 10 years, as I only have 12 years of service. My Thrift Savings Plan fund is around $92,000. Last year, my financial adviser, whom I met when his firm conducted a retirement seminar at the Atlanta Federal Center, suggested that I sell most of the securities in my private brokerage account and buy a fixed index deferred annuity from Midland National to avoid losses in…
Q. I was contributing to the Thrift Savings Plan since 2002, when the program started, until 2009. I don’t contribute now on a monthly basis because I am not a government employee yet. I still put in money from time to time, like rolling over a 401(k) from a previous job. I have close to six figures in my plan. I plan on working for another 20 years, hopefully in the government sector soon. I currently have all my money in the G Fund. I have always been nervous to put money into those other funds. Can you provide me tips on…
Q. I want to withdraw some money from my Thrift Savings Plan. I need transportation, home repairs and needs for my child. I have a husband who is unreliable, not responsible and does not work, and our marriage is on the rocks. Is there any way I can withdraw money from my TSP without his consent? A. The rules depend upon your employment status, retirement system and the amount and type of withdrawal you take. If you are still an active federal employee, spouse’s rights affect your in-service withdrawal. If you are a married FERS participant or a member of the uniformed…
Q. I am a federal civilian with 20 years of service (12 to 15 years to go). I have more than $200,000 in my 401(k) plan. The new Roth IRA option sounds appealing to me, since I’d rather pay tax on my retirement money now, while I’m employed. If I start changing some of my biweekly allocations to the Roth option, am I negating the benefits of the Roth by contributing less to the “big pot” of my existing 401(k), reducing the compounding interest? I don’t want to end up robbing Peter to pay Paul. A. Directing your contributions to…