Q. Is there any way to have the Federal Retirement Thrift Investment Board add an investment option to the Thrift Savings Plan offering for religious reasons? The holy books of the Christians (Bible), Jews (Torah), and Muslims (Qur’an) all forbid earning or paying interest (aka usury-defined as a “use fee” for cash). Since I practice my faith as best I can, that leaves me no option to participate in the TSP program because all the offerings have some element of interest derived income in them. Although in modern times “usury” means exorbitant interest, in the holy books it was just a blanket…
Browsing: interest
Q. 1. I have $12,000 in student loans at about 6.5 percent interest rates. I had considered taking a loan from my Thrift Savings Plan account to pay off my balance as the interest rate I would pay back on the TSP loan is lower than my Stafford Loans. What is the maximum amount one can take out on loan from their TSP account? What is the repayment time frame demanded by TSP? 2. If I were able to pay off my Stafford loans with a TSP loan, I am not sure that would be the best decision. I am…
Q. I have been a federal employee for 27 years, just long enough to have been one of the first forced into FERS. About seven years ago, I looked at my Thrift Savings Plan statement and learned that the prediction was that if I retired at age 62 and bought an annuity, I would have a pretty good monthly salary. Now, I notice that the prediction is that if I use my TSP savings, with about the same amount predicted for me at age 62, to buy a monthly annuity, that annuity will be about one-third of what was predicted seven…
Q. I was recently informed that I fell under the Federal Erroneous Retirement Coverage Corrections Act and had an option to select CSRS Offset. I was also told that the 1 percent and matching in my Thrift Savings Plan would be removed if I selected CSRS Offset. My human resources office told me that it would be the exact amount that was put into my TSP. If it made money, I would be able to keep the difference; if it lost money, I would have to make up the difference. So I selected CSRS Offset. Now they are beginning to remove the 1 percent by…
Q. Is F Fund performance based just on the principal amount, or does it pay a percentage or dividend at quarter end or year end? A. TSP funds do not distribute earnings. Dividends and interest earned increase the share price.
Q. Should I keep my money in the Thrift Savings Plan after I retire or put it in an IRA? What would be best to make the most interest? A. Stick with the TSP. You can’t beat the G Fund for risk-free interest.
Q. Many experts are indicating that there is a bond market bubble growing. In addition, The Wall Street Journal survey report indicates that interest rates will be going up about a point in 2014. For the next year or two, would it be best to move money out of the F Fund and place it in the G Fund, or move monies out of both funds and place them in market funds like C, S or I? Since both G and F are invested in bonds, will increasing interest rates affect invested funds negatively? A. I have been substituting G Fund…
Q. I will be retiring very soon. Can I withdraw some of the money in the Thrift Savings Plan and leave the rest there to buy an annuity later when the interest rate is better? A. Yes.
Q. I took out my Thrift Savings Plan lump sum, mainly to pay off my house. My lump sum was approximately $340,000, with about $68,000 in taxes taken out. Is the lump sum considered ordinary income? If so, this puts me in a high tax bracket for this year and has me owing about $40,000 to the government in taxes. Is this right? If so, this isn’t something they warn you about when you take it out. A. Yes, a TSP distribution is taxed as ordinary income and you’ve provided an excellent example of why you should not make such…
Q. Someone asked you online Oct. 8 if they could deposit funds into the Voluntary Contributions Program and transfer “the whole amount” into a Roth TSP. You said “yes.” The poster said they thought they could only transfer interest to TSP. By asking if they could transfer “the whole amount,” I believe they were wondering if they could transfer both contributions and interest. You have said as recently as an answer given on Sept. 24 that “You’ll have to use a Roth IRA for the after-tax portion of the VCP account,” and gave a corrected answer to a question posted…