Q. Can I maximize my Roth TSP contribution ($17,000) and also contribute to a regular Roth mutual fund up to the $5,500 limit? A. Depends upon your marital status and income. Check IRS Publication 590 or ask your tax accountant for the answer.
Browsing: mutual fund
Q. To preface, I am a twenty-something Defense Department civilian who will be furloughed the 11 days if Congress does not act. In June, I will have a $5,000 windfall from CD at maturity. I wanted to know the best possible option for this money. So far, I thought of fully funding my Roth IRA and saving the rest, adding to my emergency fund savings (which stands at about $25,000), funding my Thrift Savings Plan, or just investing in a taxable account (mutual fund, ETF, etc.) What do you recommend? A. Your question is like telling me that you’re flying an airplane…
Q. I am 25 years old, and recently joined the government. It is difficult to fathom retirement at my age, but I understand that I can get ahead by taking time to address my financial planning needs now. I don’t really have solid retirement goals. Let’s imagine I will retire around 2050. My investments need to provide support beyond any retirement date. I understand the risks associated with investing in stocks vs. mutual funds. I also understand that I can take more risk at a younger age. And I am comfortable taking on risk. After all, we’re only talking about…
Q. I am 72. My wife is 62. I get $1,700 a month in pension and $1,700 a month in Social Security. My wife gets $5,800 in pension. We put $70,000 in a mutual fund three years ago. It is now $80,000. I would like to take out $20,000 a year. I have health problems. Good idea or not? A. You have the “idea” of spending money that you’ve saved and invested in mutual funds, and you want to know if your idea is a good one? That’s like asking if your idea to eat the leftover birthday cake is…
Q. Is there any way to manage one’s Thrift Savings Plan account so as to effect a bucket strategy of withdrawal? My reasoning is that not all funds will be up in any one year. I would like to have a three-to-five-year bucket (G Fund) for the lifetime monthly withdrawals and a six-to-10-year bucket for asset growth (C, S and I funds). Periodically, I would move money from the longer-term bucket to the shorter-term bucket. As it stands now, withdrawals come out of each fund based on the percentage in each. My reasoning is that the rock bottom expense ratios…
Q. I am considering doing a partial withdrawal from my Thrift Savings Plan account and was wondering what the taxes might be. I am 63 years old, still working, with a FERS status. I wanted to move most of my TSP savings into a mutual fund/IRA and continue to make deposits in TSP. A. If you roll the withdrawal over into an IRA, there will be no tax consequences under current law.
Q. I am concerned about the stolen data from a TSP-contracted computer that’s been in the news recently. I know TSP is assuring everyone the information has not been used, and they are offering those affected a credit monitoring service for one year free. That does little to comfort me that the money in my Thrift Savings Plan (or IRAs in mutual fund companies elsewhere) is secure. Banks have FDIC. Savings and loans and credit unions also have insurance to protect depositors from theft. Is there anything out there we can rely on to assure reimbursement if our TSP or…
Q. You wrote, “the presence of the G Fund allows you to configure portfolios that produce risk/return characteristics that are superior to those available anywhere else.” I’m not aware that you could configure your own portfolio in the Thrift Savings Program, other than the index funds and L funds. Are you saying one shouldn’t own even no-load, low-fee mutual funds, more narrowly targeted than broad index funds, in an IRA? A. I was referring to configuring a portfolio using the five basic TSP funds. I know of no reason to use anything other than low-cost index funds for retirement investing.…
Q. I’m 27 and contribute 5 percent of my income to the Thrift Savings Plan, which I have in the C and I funds. I’m considering opening a Roth IRA, as well as investing in an aggressive growth mutual fund. Would I be better off just increasing my TSP contributions? A. If you insist on long-shot betting — making bets that are more likely to lose than to win — you’ll have to go outside TSP. If you want an aggressive investment that maximizes your risk-adjusted expected returns, try the TSP’s S Fund.
Q. I am in the process of moving my traditional IRAs into the TSP, but would like to keep some money in asset classes not available under TSP. Specifically, I have in mind current investments in emerging markets and real estate investment trust index mutual funds. Assuming that I would not need to liquidate these two classes of assets for at least five years, do you have any advice on the percentage of the total amount of post-retirement assets I should hold in each class? A. I recommend that you forgo this unnecessary concentration (it’s not diversification) and move the money into…