Q: Currently I’m a FERS employee at the U.S. Postal Service and I may be going on active duty for an extended period. I currently contribute the maximum to TSP through the civilian side of TSP. On active duty, I could continue my contributions up to the IRS maximum of $16,500, but I don’t know if I should. The Post Office matches 5 percent (providing I put in that much). I would lose that contribution for the year I’m away. I know I have 30 days when I come back from active duty to catch up to the full $16,500…
Q: I will turn age 70½ this year. I have non-Roth IRA accounts apart from my TSP account with the federal government and will be required to start taking withdrawals from those accounts. However, the majority of my retirement savings is with my federal TSP account and I am continuing my participation in this plan while still employed. I plan to continue my employment with the federal government for several more years and have no retirement plans in the near future. I do not wish to make any withdrawals from my TSP account while still employed by the federal government.…
Q: I will retire Dec. 31 and would like to begin monthly payments from my TSP account in January. I have read that you have to have your withdrawal form completed and sent by Dec. 14 to take effect in January, but I cannot determine which form to fill out to start monthly payments: TSP- 70 to be completed for full or partial payments or TSP-73 to be completed to make a change to your monthly TSP payments. A: Use form TSP-70 to start monthly distributions.
Q: I am 51 years old and will not be able to retire from federal service until I am 65. I have 100 percent of my TSP account invested in the C Fund. I would like to diversify my account to include slightly more risk, such as the International (I) fund. Are you able to provide me general stock market guidelines in which it is best to complete this action? A: As always, I recommend that you select the asset allocation scheme that meets your needs with the minimum of risk and then implement that allocation in your account as…
Q: Assume that I am 67 years of age and have 42½ years creditable service under the Civil Service Retirement System. Assume that I have “maxed out” at the highest grade/step on the current GS pay schedule for my locality area. Assume that I plan to continue employment until at least December 2011. Assume that I am married and have no children. Assume that I have a current balance in the Thrift Savings Plan in excess of $375,000 and have completed my TSP contributions ($22,000) for 2011. Assume that I have no current monetary obligations of age greater than 30…
Q: I will be retiring at the end of this year. I am saving my annual leave and will be paid for 448 hours in January. Can I have the leave check ( up to $22,500 of the $33,500 I expect to receive) deposited into my Thrift Savings Plan in 2012? A: No.
Q: I am a 51-year-old federal employee with 32 years of service under CSRS. I have all the Federal Employees Group Life Insurance benefits: basic life; Option A standard; Option B additional life insurance (5x); Option C family. My children are grown, ages 31, 29, 21 and 19. The 19-year-old is in college and still living at home. I’m trying to figure out what would be the best choices for me to adjust my FEGLI coverage to. My husband and I are trying to save for our retirement. It’s time to make a change as I believe I’m carry too…
Q: My wife wants to withdraw money from her TSP to pay off financial obligations. How much can we expect to pay in taxes if she withdraws $65,000? A: Her withdrawal may be subject to withholding. You can review the information in the document at https://www.tsp.gov/PDF/formspubs/octax92-32.pdf. How much you wind up owing in tax will depend upon the specifics of your tax return for the year of the withdrawal.
Q: I am 62 years old and will retire this year under the Civil Service system after 41 years. I want to take all of my TSP out to pay off my second trust on my home this year. I was told when I withdraw my TSP I will pay a 26 percent withdrawal tax. Will I also have to pay an income tax on that money when 2011 income taxes become due? A: Your withdrawal will be subject to 20 percent tax withholding, which will be applied as a credit against your tax liability when you file your tax…
Q: I am 27 and I’ve been in the federal service for five years. All my contributions to the TSP are in the L2040. Since I do not expect to retire before 2040, I think the smartest move should be investing in the new L2050 fund. But my question is, should I move all the money that I already have to that fund, or should I just start investing in the L2050 and leave whatever I have in the L2040? A: The TSP recommends that you invest all of your account assets in the L Fund that corresponds most closely…