Q: If Congress is slow to approve a raise in the debt ceiling and the government decides to furlough employees in order to pay other loans, what are my options to use Thrift Savings Plan funds to put food on the table? Can I only make early withdrawals that are subject to penalty and tax, or can I get a hardship loan with delayed repayment when my checks start again? A: Unless an exception is offered, you should assume that you will still be considered “in-service” during the period and will be subject to the in-service withdrawal limitations. This means…
Q: I am a 52-year-old law enforcement officer, 6(c) designation, and retired under the Federal Employees Retirement System this past year. Although I thought I had a good handle on this from your website, I am confused by a retirement guide an LEO put out indicating the following: “If you continue your agency employment at least one day into the calendar year of your 55th birthday, you may make unabated penalty-free withdrawals from your TSP account upon retirement. You cannot roll over your TSP and make penalty-free withdrawals at 55.” The first part indicates than an LEO must work until…
Q: In a recent response, you recommended a reader not take out an annuity using Thrift Savings Plan funds. Do you consider these annuities unsafe? I am thinking of taking an annuity when I retire to guarantee an income (along with my regular annuity and Social Security). I’m not sure that I would get enough through taking a set amount each month, or that it would last for the rest of my life. What do you see as the problems with the MetLife annuity? Are there fees for administering the account? A: Because it is an irreversible action, I generally…
Q: I have five years of military service that I am considering applying to my federal retirement years. I have waited way to long to do this and am hoping I could use my Thrift Savings Plan monies to pay for the military service, similar to rolling over an individual retirement account. Is this possible? A: A rollover to the Federal Employees Retirement System or the Civil Service Retirement System for service is not allowed.
Q: Wouldn’t someone have a penalty for taking out Social Security benefits before age 66 such that the person would not be getting $21,000 at age 62? A: No, $21,000 is approximately the maximum Social Security benefit at age 62.
Q: What effect would a government failure to extend the debt ceiling have on the TSP ‘G’ fund? A: It should have no effect.
Q: May I make a partial withdrawal from my TSP account when I retire, if I am 55 years old? A: Yes.
Q: I’m trying to understand the effects of the RMD (at age 70) on a TSP withdrawal scheme if one is using the equal monthly payments method to draw on one’s TSP savings. Suppose one has about 150,000 in a TSP and starting at age 63 in retirement, they choose to withdraw 2 percent per year, almost guaranteeing growth of the fund to continue each year. Once the RMD kicks in, doesn’t that effectively switch the withdrawals over to a “Life-Expectancy” type of withdrawal (unless one elects to increase their withdrawals to exceed the RMD)? A: Yes, once the RMD…
Q: According to two articles in the Federal Times, the U.S. Treasury is now borrowing tens of billions of dollars from the CSRS and TSP to cover government obligations until the debt ceiling is raised. The article indicated that retirees would have nothing to worry about If the debt ceiling is raised. I’m planning to retire at the end of this month. After reading these two articles, I am concerned that if the debt ceiling is not raised (and according to many political pundits, this may be a real possibility given the political climate in Washington), there would be no…
Q: I am approaching 70, close to the 70.5 years of age TSP participation cutoff. I am required to make a decision on where to move my TSP money. I need info on what happens to my thrift savings money, if I choose to move the account funds to Met Life management. I need to know if the TSP fund money I transfer will earn interest. Would the transferred money need to be reinvested so as to earn money ? What are, if any, Met’s management fees? Are there other business fees? Will MET Life REQUIRE use of the IRS…