Q. My boyfriend worked as a civilian marine electrician in the Navy and he has a 401(k) plan or a Thrift Savings Plan. He’s not working with them anymore, and he wants to withdraw some money to start a new life. He does have a job, but it’s not enough to pay his bills, and he wants to get a divorce from his wife but has no money to even file it. I’ve read several articles and I think his best option is to directly roll over the plan to a traditional IRA, which avoids any penalty fees, but he…
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Q. I have unfortunately neglected my Thrift Savings Plan since joining federal service in 2007. I started with the G Fund, stayed with it during the crash, and am still 100 percent in it today. I realize that was a huge mistake; the stock funds have done extremely well especially this past year. Would you recommend I dollar cost average in over the next six months or year? My instinct is to stop these low returns and get into the bond and stock funds and out of the G, but if the market takes a dive this summer, I will…
Q. Overview: I began in the Air Force Non-Appropriated Fund in 1996, enrolled in NAF retirement plan in 2000, ported to GS in 2005 with deferral of my NAF retirement (calculated at 5.27 yrs) and entered FERS. My current GS position will be abolished in 2014 (at nine years FERS). I have the potential of porting into a NAF position. I wish I had just retained NAF retirement, but lack of research and misguided human resources recommendations led me to where I am with a split retirement outlook. Given my FERS time will total only nine years at abolishment, if I move…
If you own a Thrift Savings Plan account and plan to use it to fund your standard of living in retirement, you are a pension fund manager. As a pension fund manager, you are responsible for the standard of living your TSP account produces. This standard of living will depend heavily on the decisions you make in the course of managing your account. It is critical to recognize that a single stumble along the way — one bad outcome from one bad or overlooked decision — can cost you dearly later in life. The margin for error is razor thin,…
Q. I have a 401(k), several CD IRAs and several mutual fund IRAs. I will turn 70 the end of November. Do I have to withdraw a minimum amount from each account, or can I withdraw the required minimum amount from one of the accounts as long as it totals the amount I must withdraw next year?
Q. If I were to take the MRA+10 option and defer my retirement until I turn 62, can I still move my total thrift savings (401(k)) out of the thrift program? A. Yes.
Q. I have a 401(k) plan from a previous job in the private sector that allowed yearly post-tax contributions after the pretax limit contributions had been reached. Can I roll over the post-tax contributions in my 401(k) to the Roth TSP? A. Not unless the funds are held in a Roth 401(k) account.
Q. I am a 48-year-old GS-14/7 with about $240,000 in my Thrift Savings Plan (I have a little more in a prior 401(k), and my wife makes more than I do but does not have a 401(k) plan…I am willing to take reasonable risks). I have contributed the maximum at 43 percent C, 22 percent S, 25 percent I and 10 percent F for several years and rebalanced each year. Indeed, I stubbornly left it like that during the crash but have recovered nicely. I recently borrowed $30,000 (yes, I know, that is not the best course), at the G…
Q. Your April 1 Money Matters article identifies the exception to the 10 percent penalty for early distributions for separation from federal service during or after the calendar year one reaches age 55. My question relates to funds transferred to my Thrift Savings Plan account from a former employer’s 401(k) plan. Does the exception apply to all funds contained in my TSP account, or just those funds contributed to the TSP in the normal course of my federal service employment — i.e., not counting funds transferred from a prior 401(k) account? A. It applies to the contents of your TSP account,…
Q. So if I follow all the rules related to my current Thrift Savings Plan account, and I begin making systematic withdrawals under the annuity factor method at age 55: 1. Can I contribute to my new employer’s 401(k) while drawing from my TSP? (I may want to take a downscaled job and subsidize the lower income with my TSP distributions.) 2. Are any Internal Revenue Service restrictions in place regarding my Roth IRA because I am taking distributions from my 401(k) at age 55? A. Yes, you may contribute to a 401(k) while taking distributions from your TSP account,…