Q. I retired Dec. 31. I plan to use the 10-year monthly annuity option. Does the principal in my account continue to be in play in the market? Will I benefit or suffer from market volatility? A. If you use your Thrift Savings Plan money to purchase an annuity, you give up ownership of the principal in exchange for the guaranteed payments. The principal will be removed from your account to pay for the annuity.
Browsing: retirement
Q. I retired from federal service last year. The Office of Personnel Management made a direct rollover of my Voluntary Contributions Program after-tax contributions to a Roth IRA, and a direct rollover of my interest earned on those contributions to my Thrift Savings Plan account. However, OPM will not issue 1099Rs documenting these two direct rollovers, forcing me to file Form 4852 “substitute for 1099-R” with my 2012 tax return. This form requires these two direct rollovers to be identified with a distribution code. Of course, the Internal Revenue Service instructions aren’t that clear about which code is appropriate for each direct rollover. It…
Q. I’m 64 years old, planning to retire at the end of March, and after I retire, I’m hoping to take $20,000 off the top of my Thrift Savings Plan. Am I able to leave the rest for a later date? And what options do I have when I decide to tap into the remaining balance? Do I have to take the rest out in a lump sum or can I take it out in increments, like an annuity? A. You may take one lump-sum withdrawal. After that, your only option is a full withdrawal, either as a lump sum…
Q. If I am 52 years old and have all of my contributions in the L Fund now at 100 percent, and expect to retire in 2028, what would you recommend on how to distribute my percentages among the other funds? A. This is like asking what kind of car you should buy. The correct answer depends entirely upon what you expect the car to do. If you don’t know what to do, you can pick the L Fund that most closely corresponds to your life expectancy and use that. This is like choosing to buy a four-door sedan, though.…
Q. I plan on retiring in August at age 60 with over 37 years of service. I am under CSRS. I also contribute to the Thrift Savings Plan and started a Roth in December. Given that the feds are planning to “borrow” from the G Fund, would I be wiser to convert all TSP monies to Roth or withdraw and put into another IRA? A. I don’t think so. The law requires that the G Fund be made whole.
Q. I am planning on doing an age-based in-service withdrawal of all of my funds prior to retiring. I have a 10 percent contribution going into my Thrift Savings Plan account. Do I need to stop the contributions before withdrawal to make sure no more funds are put into my account after the fact? Or are they automatically turned off once my request is processed? A. You’ll need to stop your contributions.
Q. Someone had a recent question about Thrift Savings Plan fund investment options in a speculative market, and I noticed in reading some of the comments at blog.federaltimes.com, a recommendation of “What’s safer than either the G or F Funds, alone, is a combination of all five funds at once. Without stocks, how are you going to hedge the risk of owning the G and/or F funds?” Doesn’t being in one of the L funds do that for you? Also, would you move your TSP funds out of the TSP at retirement into an IRA? A. Yes, the L funds…
Q. I am 47 years old and retired from the uniformed services almost three years ago. I work as a federal civilian. I have two Thrift Savings Plan accounts and two questions. 1. Can I roll my uniformed service account balance into my federal civilian account balance? If yes, how? If no … 2. If I don’t reinvest in another tax-deferred retirement account, and elect to withdraw 100 percent of my uniformed service balance, what penalties will I pay (if any) in addition to taxes? A. You may combine your uniformed services TSP account into your civilian TSP account. Use Form TSP-65, which…
Q. I am a military member retiring in January 2014. I will have approximately $57,000 invested in my Thrift Savings Plan account when I retire. If I decide to withdraw my account in one lump sum, how much will I pay in taxes? I’ve heard that I would be taxed up to 30 percent of my balance at time of withdrawal, which would leave me with about $39,900 after taxes. Is this accurate? A. Your check will be reduced by 20 percent for mandatory federal tax withholding. This is just a deposit against your federal tax liability, however, which you won’t determine…
Q. I am retiring in June under CSRS at age 54 after 31 years of service (Air Traffic Provision). I have been working outside of the country for the past three years as a loaned executive and have had to pay my CSRS benefits out of pocket to keep my CSRS entitlement while outside of the country. During this period, I have not been able to contribute money into the Thrift Savings Plan since my salary is paid by the out of country organization where I am assigned. I will only return to the Federal Aviation Association for one month…