Q. Can I add lump sums of money to the TSP from other IRA sources? I am a current federal retired employee. A. Yes, as long as the money does not include nondeductible contributions or other basis amounts.
Q. I currently have my TSP funds allocated: C Fund 50 percent, S Fund 30 percent and I Fund 20 percent. I’m currently 41 years old, and have about $200,000 in my account. I would like to achieve a 9 percent to 10 percent return each year or the most I can without jeopardizing my money. I’ll be eligible to retire at 57. Should I be putting some into G and some into the F to reduce risk? I balance my account once a year on my birthday back to C Fund 50 percent, S Fund 30 percent and I…
Q. Can I add lump sums of money to the TSP from any other source except my paycheck? If so, what are those sources? I am a current federal career employee. A. You may transfer balances from certain other retirement plans (like 401(k) plans) and traditional IRA accounts as long as they contain only pretax money.
Q. I took an early retirement and receive a monthly annuity check from the CSRS. I am currently 54 years old. Can I roll over the taxable amount of the annuity into an IRA to avoid paying the tax on this money until a later year? A. No.
Q. I am a 61-year-old CSRS retiree. I have approximately $120,000 in the TSP. I do not plan on touching the money but leaving it as an inheritance to my children. Recently, however, with housing prices being low, I have thought about cashing it out and buying a second home in Florida ,which of course the children would also inherit. This would give me a second home with no mortgage. Would the tax on the withdrawal make this a foolish move? A. It’s not foolish to use your money to live your life the way you want. The taxes will…
Q. I am 61 years old with 21 years of FERS service. I plan to work a few more years. I moved money into my Thrift Savings Account a few months ago. I took money from my C Fund and added to the G Fund. I moved only the amount due to pay my mortgage off. Due to my age, was this a wise move and how safe is the G Fund considering the government’s debt? I have 40 percent in the G Fund, 30 percent C Fund and 30 percent in the S Fund. Would you recommend that I…
Q. Please advise … can I convert my existing TSP account to a Roth IRA? I would love to start a Roth but our family income is over the threshold. The rules for 2010 seem like a perfect opportunity to make it happen. I just don’t know if the TSP is one of the retirement accounts that can be converted. A. Yes, you may, but I’d advise against it in most cases. You should consider what must happen for the Roth IRA to overcome the burden of higher costs and/or risk, compared to the TSP.
Q. The Federal Reserve Bank has indicated it will begin increasing the Federal Funds Rate this year. How much of an impact (decrease in value) will this have on the F Fund (U.S. bonds)? A. It’s impossible to say exactly, since the F Fund is composed a variety of types of bonds. In general, you should expect rising interest rates to drive down the market value of bonds, particularly treasury debt — but reasonable expectations are not always fulfilled.
Q. I am 60 years old. I want to make an age-based withdrawal. However, I am paying back a loan made four years ago. The TSP Web site says I cannot make an a withdrawal if I have a loan application pending. Since my loan has been ongoing for four years, the load application is “NOT PENDING. May I still make an age-based withdrawal with an active loan? A. Having a loan outstanding does not prevent you from taking an in-service withdrawal.
Q. I am a federal employee and contributing the maximum of $16,500 to the TSP. I also have a sub-chapter s-corporation and earn outside employment income. Can I open a 401(k) under the corporation and make additional pretax contributions to this account? A. No. The limit applies in the aggregate.