Q. I am retiring under FERS soon. I am now age 69. I have about $175,000: 74 percent in G Fund; 24 percent in C Fund. I would like to move some or all out of the G Fund to get a better return. Your advice would be appreciated. A. This is not nearly enough information to determine the proper asset allocation for you. I will note, however, that the additional return you seek will come with much greater risk of loss than that posed by the G Fund, so be careful.
Browsing: retirement
Q. I am a retired federal employee, having worked for the Social Security Administration. I have funds accumulated in the Thrift Savings Plans. I am getting close to age 70 and am considering the purchase of a life annuity with some or all of those funds, and know that those payments will be taxed by the Internal Revenue Service. But what about the states — particularly, for me, Alabama? Are these TSP annuity payments taxable by Alabama? A. I don’t give state tax advice for each of the 50 states. You should ask an Alabama CPA for specific advice.
Q. I will have about $1.5 million in my Thrift Savings Plan when I retire. I am planning on getting an annuity with those funds. Because it is part of my retirement funding, will this be counted against me with respect to the Social Security earnings limits? In other words, will I have to pay additional taxes on what I have earned in my retirement account because my income will be in excess of the Social Security earnings limits? A. The income will not be counted as earned income for means testing but will be counted as income for determining the…
Q. I would like to roll over the money from one retirement account (my Thrift Savings Plan) to my CSRS retirement account, so as to avoid paying tax. How am I supposed to be able to do this since neither the TSP nor the Office of Personnel Management nor the Internal Revenue Service can give me an answer on if it is possible and if so, how? I would be paying service time from Sept. 10, 1973, to May 30, 1983, and from Aug. 25, 1997, to June 19, 1999. A. You’re not supposed to be able to do it…
Q. I am an air traffic controller who is retiring in two months at age 48. I have an outstanding Thrift Savings Plan loan for about $9,000. What happens if I don’t pay this off before I retire? Do I pay the 10 percent penalty, along with it being shown as income? Does this affect my monthly withdrawal from TSP using the 72(t) rule? Also, can I take a one-time partial lump-sum withdrawal and pay the 10 percent penalty without it affecting my monthly withdrawal? A. If you don’t repay the loan within the grace period after you retire, it will…
Q. I am 65 years old and will collect my first Social Security retirement check this month. I have been employed by the federal government for the past nine years; therefore, I have been enrolled in the Thrift Savings Program. If I retired today, my TSP benefit would be approximately $400 a month. Will my Social Security or TSP benefit be penalized because I am drawing benefits from both accounts? A. It is possible that the taxes you owe on your SS benefits could affected by your annual income, including TSP distributions. See www.irs.gov/uac/Are-Your-Social-Security-Benefits-Taxable%3F for more info.
Q. I’ve been retired a couple of years now and I’ve transferred the money I had sitting in the G Fund to one of the L funds. I chose the L 2020 fund, mainly because I’ll turn 70 in five years and will be forced to start withdrawing the required minimum distribution. I’ve read that you suggested putting money into the L Fund that closely corresponds to one’s life expectancy. Does that mean how long I plan to live, or is that determined by a doctor or some other expert? A. If you’ve had a full physical exam within the…
Q. I appreciated your Feb. 4 article concerning the advantages of the Thrift Savings Plan vs. more costly private products. I am unclear, however, about the options (and their advisability) when it comes time to retire from federal service. Recognizing that rules allow distribution without penalty at 59½ and require some distribution from any IRA at 70, is continuation in the TSP an option which would allow the retiree to access the account as desired, or must the TSP account be moved to a private instrument? A. I have written about this topic on more than one occasion. You may…
Q. I am a federal employee under CSRS and over the age of 50. I understand that the 2013 contribution limit for TSP is $17,500 plus an additional catch-up contribution of $5,500, for a total contribution limit of $23,000. My question concerns contributions also made to a Roth IRA account outside the Thrift Savings Plan. For the general public, I understand if you are under the Internal Revenue Service income limit, you can contribute $5,000 plus a $1,000 catch-up contribution to a Roth IRA. I am under this income limit. Therefore, can I contribute the $6,000 to my Roth IRA…
Q. My question regards Required Minimum Distributions and how this Internal Revenue System rule relates to an annuity purchased with IRA funds. If the annuity in question has fixed payment amounts that are less than a calculated RMD, the funds are not available to the account owner for distribution to meet the RMD rules. Does this scenario appear to be a credible reason for not meeting the RMD rules and an exception that IRS should allow? A. We don’t answer questions about IRAs here, but I will pretend you asked about the Thrift Savings Plan, since the answer is the same…