Q. I am a FERS employee who turned 71 in September. I plan to retire in January 2015. When do I need to start taking my required minimum distribution? A. Under the current rules, and these circumstances, your first RMD, for tax year 2015, will be due by April 1, 2016.
Browsing: retirement
Q. My financial adviser is encouraging me to move my Thrift Savings Plan funds immediately to a Roth account. Is this a good idea if I am retiring in the next 12 months or earlier? A. No. It’s not a good idea unless there is a good reason to do so. I’ll bet that your “financial adviser” is nothing more than a salesperson trying to take your money. Confusing the two is usually a costly mistake.
Q. I am a federal employee who will be retiring Jan. 3 after 40 years of service at age 58½. I took a necessary loan on my Thrift Savings Plan and will still have a balance on my loan when I retire. I understand I have 90 days to pay back the loan or I will be taxed for the money owed. I do not need my TSP money now. I would like to keep it there or invest somehow, not sure yet. I do not want to pay the money back, which makes no sense to me since I can take…
Q. I am considering retirement at 62 (FERS) but not collecting Social Security until my full retirement age of 66. I know that once you start withdrawing from your Thrift Savings Plan account, you must continue to make withdrawals each year. To bridge the time from 62 to 66, I’m thinking of taking funds from my IRA instead. If I start taking withdrawals at 62, can I stop taking withdrawals from my IRA at 66 when I start Social Security and then resume withdrawals at 70½? A. You’ve got the right idea, and it will work. You may start and…
Q. Are there any advantages and does it make sense to transfer my wife’s 403(b) account into my Thrift Savings Plan account before I retire? I am planning to retire in 2015 at age 55 with 33 years of service (CSRS Offset). Will TSP even allow a spouse’s account to be transferred into the TSP? She will be retiring in 2014. She is not federally employed. A. It makes sense, and there would probably be advantages to doing this. But, alas, it’s not allowed.
Q. I will be 56 this month and have 27 years of federal service. I plan to retire in February. Will I be able to draw an immediate monthly income from my Thrift Savings Plan upon retirement without incurring the 10 percent penalty for early withdrawal? A. Yes.
Q. I am a 60-year-old FERS employee and have decided to retire in March. With $250,000 in my Thrift Savings Plan, I am being courted by insurance companies to buy into their annuities. I can see some benefit but am worried that the administrative fees will take too much of my money. How can I overcome these anxieties? A. If history has taught us anything, it’s that these “financial services” companies don’t care about you and your interests. They care about profits, which always come at their customers’ expense. They’ll do and say anything they think they can get away with to confiscate your money.…
Q. I am a CSRS Postal Service employee and plan to retire at the end of 2014, when I will be 55 years old with 38 years of service (including sick leave). After reading other answers, I understand that I can immediately withdraw funds from my Thrift Savings Plan without penalty but would like advice regarding those withdrawals. Considering that TSP withdrawals are subject to regular income taxation, is it beneficial to move the funds to an IRA? Would I avoid any tax? Other than future growth potential and smaller tax rate, is there any benefit to delaying withdrawals until later in…
Q. I am 65 years old and retired from government service in March. I have about $ 400,000 in my Thrift Savings Plan account, with over $150,000 in G Fund. (For the record, I also hold about $70,000 in the F Fund, $90,000 in the C Fund, $50,000 in the S Fund and $40,000 in the I Fund.) I am considering transferring $40,000 from the G Fund to L2020 to make my TSP portfolio a bit less conservative and also as a reflection of long-term price expectations on the bond market. Do you consider this a wise move? If so,…
Q. I don’t understand what you mean by invest in the L Fund based on your life expectancy. My husband plans to retire in 2014 when he turns 62. If his life expectancy is 85 years old, does that mean he should put his money in the L2020 or L2030 Fund? He is still employed, but his Thrift Savings Plan money is in the L Income Fund. A. Recommendation to invest in the L Fund that most closely corresponds to your life expectancy (or joint life expectancy with your dependent) assumes that you don’t have the basis for a more suitable…