Q. Your Sept. 24 column in Federal Times made the suggestion to increase allocation in the G Fund at the expense of the other funds, including the F Fund. I have not normally been heavily invested in the F Fund in my 25 years. However, with the F Fund having the second-highest return of any fund since its inception (5.86 percent); that it has never had a negative yearly return; that there is a continually declining performance of the G Fund; and the low probability that interest rates will go up any time soon, I see the F Fund as…
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Q. I have the same question as I found on your site: “Q. I would like to take a portion of my Thrift Savings Plan balance and transfer it to a self-directed IRA. What is the process for doing that? What are the estimated costs and penalties? A: In your circumstances — actively employed and younger than 59½ — the TSP won’t allow this.” But I am 61 years old and in civil service for 34 years. You imply in the above answer that over 59½ might be OK. Do you recommend this, or can there be possible problems? A. You could…
Q. I just changed my contribution allocations from 100 percent G Fund to 100 percent L Fund 2030. Would it make sense to transfer my fund balance that I earned with G Fund to the L Fund? A. It’s impossible to give you reliable investment advice without the proper analysis and understanding of your unique circumstances, goals and constraints. How you manage your investments should depend directly upon what you expect that money to do and when. In general, though, unless the G Fund is holding money that is to be spent within the next few years, or that is part…
Q. I’m a FERS retiree, age 64, with a $36,000 annual pension. My spouse has a $40,000 annual salary. We have a rental property that brings us $24,000 a year. And we have a home mortgage balance of $500,000. Our living expenses so far do not require me to withdraw my $600,000 Thrift Savings Plan fund. I plan to live until age 85. As I approach age 70½ with minimum distribution, what is the best tax strategy for transferring the $600,000 from the TSP into a private investment account? A lump-sum rollover into a Roth account after paying the taxes? A calculated…
Q. I have 19 years of federal service (counting the 10 years active duty I bought back). I am 51, and I fall under FERS. I don’t trust the government retirement system with what is going on in the economy and would like to invest in gold or silver, but I don’t trust it being in some IRA in another state, that if everything were to go south, I wouldn’t get anything anyway. Is there any way of withdrawing some or all of my funds without penalties to invest in hard assets? A. Not until you reach age 50½ or…
Q. I have six more years of active duty in the military. I have approximately $62,000 in my Thrift Savings Plan, 100 percent is in the G Fund. What would be the best fund for investment for my age and retirement in six years? A. It’s impossible to say from this information. The correct answer depends upon how and when you plan to use the money.
Q. I am 64 years old and retiring from the federal government with over 33 years of service. I am CSRS Offset. I applied for Social Security to begin in September. I do not need my Thrift Savings Plan money now. Should I leave it where it is, or roll over to an IRA? I have all of my money in the L 2020 fund. If I leave it where it is, should I move the money into another fund(s)? A. You should leave your money in the TSP for as long as possible. There is no better retirement investment environment. How…
Q. I am a FERS employee who has 12 years before I can retire. I have already invested $4,000 in a Roth IRA for 2012 and switched all of my Thrift Savings Plan contributions to the Roth option in May. My financial adviser said I could not invest more than a total of $5,000 in both Roth accounts for 2012 and told me to switch my contributions back to the traditional TSP. Is he correct, or can I invest the $4,000 in the Roth IRA and $17,000 in the Roth TSP? In other words, can I still invest the annual…
Q. I retired the end of July 2011. Since then, companies are coming out of the woodwork requesting that I invest my Thrift Savings Plan funds with them because “keeping it in the TSP will not allow growth due to the fact that I am no longer contributing.” But I am hesitating to do anything with it because once I hear their fees, it scares me. I don’t expect to need the money and would like it to grow into a nice inheritance for my daughter. I have about 90 percent in the G Fund and the remaining 10 percent divided…
Q. I have received several inquiries about establishing Voluntary Contribution Plan accounts with the Office of Personnel Management, funding the account and then rolling those voluntary contributions into a conventional Roth plan administered in the private sector once the employee has retired. I am a little skeptical about the prudence of this. It appears to me on the outside that this is simply a way of talking people into using the federal government to change the “color of money; read: launder” and then roll it into a Roth where a plan administrator will now make a fee on your hard-earned…