Browsing: interest

TSP setup

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Q. I was recently hired at the the FDA. I have about $43,000 in student loans with a high interest rate. How much should I set up to be put into my TSP in order to take a loan from myself? Would this be a smart move? I believe that this way I’ll take out a loan from myself at a lower interest rate.

TSP agency contributions

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Q. I was hired into federal service Sept. 28, 1992. At this point, shouldn’t the government have started contributing to a Thrift Savings Plan account in my name 1 percent of my salary automatically? Contributions didn’t begin until I manually enrolled in TSP a year later. This seems to be the bit from the TSP website that applies to me: “If you are a FERS participant and were hired before Aug. 1, 2010: * The TSP would have begun receiving automatic contributions equal to 1% of your pay from your agency — beginning with your first pay period. If you…

Reallocating funds

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Q. I will be retiring in January. I have approximately $180,000 the G Fund. Should I consider the one-time withdrawal to a money market account that is FDIC-insured so I can have some liquidity in my cash flow?   Could you recommend such a fund? Could you recommend any restructuring of my Thrift Savings Plan to accommodate current federal reductions in the stimulus program? A. Yes, should consider taking a withdrawal from your TSP account to provide needed liquidity, but only if no other resources are available to do the job. The best place for liquid cash reserves in this economy…

TSP

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Q. I’m unsure of what to do with my Thrift Savings Plan account. I understand that I could leave it in the account as it is until I’m 70½. I can also make a full or partial withdrawal.  Full withdrawal is not an option for me. A TSP life annuity (both single or joint life) option is based on life expectancy or until the money runs out. Also there is the TSP annuity vendor (MetLife) where I could get the annuity but money used to purchase this annuity goes to the insurance company if you die before it’s used up.…

Avoid these mistakes when planning to retire

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It’s easy to make mistakes when you are planning to retire. Some of the biggest mistakes apply to all employees; a few apply only to CSRS or FERS retirees. All can be costly. Here they are and what you can do to avoid them: Retiring on the spur of the moment. It can be disastrous, for two reasons. First, if you hand in your retirement application at the last minute, it may contain errors that delay processing or even cause it to be rejected. Second, decisions made in haste often come back to bite you. Once committed to a course…

G Fund and debt ceiling

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Q. If the government doesn’t raise the debt ceiling, what does that mean in practical terms for the TSP G Fund, and for government bonds and securities, in general? The G Fund is backed by the good faith and credit of the government, but if the government doesn’t have the ability to pay its debts, even for a short time, does that mean that the G Fund could have a zero return for that period? A. Interest rates could rise and bond values could fall. Higher interest rates are generally bad for the F Fund and good for the G…

MetLife fees

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Q. What are the MetLife annual and/or one-time fees charged after annuity is purchased? A. The only fee is the initial cost of the annuity, which depends upon your age, the annuity you purchase and the interest rate index at the time of the purchase.

Repaying CSRS via rollover

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Q. I was first employed by the Defense Department in October 1982 and placed in CSRS. During a reduction in force, I lost my position in July 1994. In 1996, I withdrew my CSRS contributions and had them rolled into an annuity with American Express (now Ameriprise). In November 1998, I was rehired by DoD and became a FERS employee. When I was rehired by DoD, I took the funds I had earned at my previous (1994-1998) job’s 401(k) and rolled them into the same annuity with Ameriprise. I am now nearing retirement age and plan to buy back the CSRS…

Follow-up to 'TSP advice'

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Q. I am the CSRS retiree who turned 70 years old in July. My email was posted Aug. 19. Boy, you have a way of really making a person feel small and stupid. I chose to start withdrawing my money so I wouldn’t have to be concerned about the 70½ deadline. These withdrawals were based on my life expectancy, and I knowingly started withdrawing my money a little ahead of time. I have not concluded that I am not receiving any gain from the G Fund with the Thrift Savings Plan. I wondered why I was taking such a significant…

G Fund

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Q. How is the Thrift Savings Plan’s G Fund related to bonds I keep hearing about lately being sold off from other bond funds? How is the G Fund different from these funds? Is this bond fund an inflation-protected bond fund? How does this fund guarantee the principal investment? Who takes the loss if yields on bonds purchased are lower when shares in this fund are transferred than on when those shares were bought? A. The G Fund is backed by the federal government and accrues interest equal the weighted average interest rate for all outstanding U.S. Treasury debt. It is not a…

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