Browsing: retirement planning

TSP Monthly Payment Calculator

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Q. Why do you consider the TSP Monthly Payment Calculator useless? I have only G Fund allocations now that I am close to my FERS retirement of 34 years. I have even transferred all dollars from a traditional IRA into the TSP for ease of management and greater total G fund assets. My retirement stool has four legs: military reserve retirement, FERS, early Social Security income and TSP. The calculator allows us to put in any part of our accumulated expected TSP value that we desire for retirement supplementation and somehow calculates that against expected growth without any future contributions…

Financial planner for retirement checkup

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Q. I am a 50-year-old federal employee looking for a fee-only financial planner to check my finances to see if I am on track to retire when I reach 65. I am not looking for someone to manage my finances — only to check my plan and maybe someone to check in with once ever couple of years. Is this expensive — where do I find someone who is very familiar with the FERS and federal retirement specifically in my area? A. That’s what I do. You may visit www.variplan.com for more information.

Financial questions

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Q. I read your article in the Federal Times and found it very enlightening and maybe an answer to my money concern. I have approximately $50,000.00 in a Funds account and I have approximately $92,000.00 in TSP. I have 32 years in the federal government under CSRS plus about 11 months’ sick leave and 240 hours annual leave. I am interested in retiring from the government and working for private industry in a less paying, less stressful job. I am interested in finding out from you if it would benefit my wife and I financially to purchase or rent a…

Retirement

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Q. When I hope to retire in FERS, I will be 62 years old with 28 years creditable service. I will receive TSP payouts, Social Security benefits and a FERS pension. My wife will benefit from Survivors’ Benefits. I’m concerned about what the living costs will be as a retiree. Will I have to pay federal income taxes on all of the above income that I receive. I am told that the tax rate is cheaper after retirement. Is that just because there is less income, or is it also because we are in a lower tax bracket? A. All…

Managing your pension fund can seem like a full-time gig

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It looks like most career federal employees will wind up working in retirement, after all — as their own pension fund managers. Federal employees, for all the challenges they face, enjoy something that is increasingly scarce in the private sector  — a guaranteed annuity. Not only are guaranteed retirement streams rare, but guaranteed retirement income with inflation protection — like that in Civil Service Retirement System and Federal Employees Retirement System annuity payments — is even rarer. There are increasingly frequent and aggressive calls for cuts to the federal budget, and in particular, to federal retirement benefits costs. As a federal employee,…

TSP and retirement

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Q: I plan to retire March 1. I am thinking about maximizing my TSP and TSP catch-up contributions for the first two months of 2012.  That would be a total contribution of $16,500 and $5,500 respectively. I know this would have huge tax advantages for 2012 and increase my retirement investments, so is this a good plan?  Upon retirement, I will have 720+ hours of annual leave and do not want to have a huge salary increase for the tax year, and this is one way to accomplish this. Am I overlooking something? A: “Is this a good plan?” is…

Treasury borrowing from pension funds

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Q: According to two articles in the Federal Times, the U.S. Treasury is now borrowing tens of billions of dollars from the CSRS and TSP to cover government obligations until the debt ceiling is raised.  The article indicated that retirees would have nothing to worry about If the debt ceiling is raised. I’m planning to retire at the end of this month. After reading these two articles, I am concerned that if the debt ceiling is not raised (and according to many political pundits, this may be a real possibility given the political climate in Washington), there would be no…

TSP withdrawal

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Q: I am 57 and I retired from civil service in December. I have not taken anything out of my TSP account at this time. I would like to withdraw a partial payment from my TSP account and then set up monthly payments. Will I have to pay the 10 percent penalty on the partial payment because of my age and since I have been retired for almost six months? A: Since you retired during or after the year in which you reached age 55, you will not be subject to the 10 percent early withdrawal penalty.

Retirement

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Q. I am a FERS employee with the Postal Service. I am 60 years old with 26 years employment. If I decided to retire this year, can I then withdraw monthly allotments from my TSP until I am 62 and then stop and roll it over into an investment plan? A. Yes, but it’s hard to imagine a better investment plan than the TSP.

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Q. I believe one of your previous columns indicated that the management fee of the TSP is far less than private sector investment firms. Could you provide scenarios comparing TSP vs. other well-known funds: Please include USAA on the list.  For planning purposes, assume $200,000 in the account. A. There are thousands of funds out there, so I’m not about to spend hours doing your homework for you. I will give you an example, however. According to the TSP’s website, in 2010, the TSP’s funds cost their investors 0.025 percent to operate. So if you invest your TSP assets in…

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