Browsing: life expectancy

Q. I retired from the Air Force in 2004 after 30 years of service. I was rehired into the civil service ranks in November 2004 and immediately started investing into the Thrift Savings Plan’s L2020 account. I just turned 58 and plan on retiring when I hit 60, maybe 62 if my health holds up. How long should I keep my investments in the L2020 account? As I get closer to retirement date, should I move it from L2020 to one of the individual funds? A. If you’re not sure about what to do, to support you goals with a…

Q. In an April 2011 answer to a question about the lifecycle funds, you noted that the Thrift Savings Plan suggests choosing the L Fund that most closely matches your retirement date and putting 100 percent of your money there. You said you recommend investing in the L Fund that most closely matches your life expectancy rather than your retirement date.  Why?  Isn’t this going to put your money at risk when you’re older and can least afford to be risky with your money? A. This is my default recommendation, and it recognizes the fact that, in most cases, your financial…

Q. My husband and I are both federal employees. My husband is 30 and has 10½ years. He contributes to the G Fund and, from what I can tell from our leave and earnings statement, it is 5 percent. I am 28 and have three years. I also have a 5 percent contribution to G Fund per our LES. What fund do you recommend we contribute to? We would like to start now to ensure we have a decent retirement. Do you recommend us investing in the new Roth? A. You should contribute as much as you can afford to…

Q. I’m retiring from the military at age 52 after 30 years of service. As I understand things, I can’t withdraw my Thrift Savings Plan funds without a penalty until age 59½ (except as an annuity or equal payments based on life expectancy). What if I go to work for the government as a civilian until age 55? Then, could I withdraw the whole amount without penalty? Is there a certain length of time I must spend as a civilian federal worker?  What if I only worked for the government for three months during the year I turned 55? Is that…

Q. I am 61 and have $200,000 in the Thrift Savings Plan. I’m in process of transferring another $240,000 from an outside discount brokerage firm to my TSP. I would like to transfer all of the $240,000 to the F Fund. With interest rates possibly remaining low for another few years, is this a good move? When interest rates rise, how much will the F fund shares decrease? The bonds it holds are short and intermediate, so I’m assuming it won’t lose as much as if it held long-term bonds, but I’m not clear on how much I could lose. I’m trying to move…

Q. I am a FERS retiree who must begin taking my required minimum distribution in 2013. I am contemplating receiving monthly payments based on my expected life expectancy, but I need to know whether an initial decision to do so locks me forever, or whether, say in 2014 or 2015, I can change to monthly withdrawals based on an amount set annually. If the Thrift Savings Plan allows the later switch, are there barriers to my later going back to monthly payments based on life expectancy? A. You may change from life-expectancy payments to fixed-dollar payments one time only. You may…

Q. As a federal law enforcement officer with 25 years of service, can I retire at the age of 47 and withdraw monthly payments from my Thrift Savings Plan balance based on life expectancy without paying a 10 percent penalty? If so, can I change this at 60 years of age to a specific dollar amount monthly payment without a penalty? A. Yes, as long as they continue, without interruption or error, until you reach age 59½. After that, you may change the payments without penalty. The rules for avoiding the penalty are complex and strict, so you should consult…

Q: I always find that financial planners do not make clear about upcoming expenses; they mostly talk about more and more income. For example, a statement like “you need 80 percent of your current income” — I never understood this figure. It looks like all financial advisers assume this figure. In a recent article, you advise a reader that she needs an income of $72,000. How do you come up that figure? Does it include mortgage payments? Say, $20,000? A: I can’t possibly tell you what your desired life expectancy in retirement will cost; that’s something you’ll need to figure…

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