Q. I plan to retire at the age of 53 with 22 years under law enforcement with the Bureau of Prisons. Can I have my 72T Substantially Equal Periodic Payments come from TSP or do I have to transfer to a financial planning firm such as Edward Jones? A. The payments can come from your TSP, but will have to be set up as monthly payments.
Browsing: thrift savings plan
Q. I just read your article in today’s Federal Times. I just looked at my TSP account and I am investing in the G, F and C funds. As of June I will have 21 years of service. I asked my boss when will I be able to go to the Retirement Seminar and she informed me that there are six people ahead of me. Last year the office sent two people; at this rate I will be screwed because I am trying to prepare now for my retirement. After reading your article it has inspired me to invest in…
Q. Could you provide your opinion about the pros and cons in transferring IRAs into the TSP, or keeping them separate? I understand that the costs are much less in the TSP. However, withdrawal options are more flexible in IRAs, and IRAs provide another diversification capability. A. The pros are low cost, the G Fund, simple and efficient design, ease of management and superior risk-adjusted returns. The con is limited withdrawal options. The diversification possibilities in an IRA are largely irrelevant, since the TSP’s funds adequately cover the investment world. What most people call diversification is actually concentration. The TSP’s…
Q. Once retired and taking distribution withdrawals from my TSP account, will I have control of which investment(s) in my TSP account the distribution withdrawal comes out of? An example would be G fund versus one of the stock index funds? A. Your withdrawal be pro-rated across all the funds held in your account at the time the withdrawal is processed.
Q. The current annuity provider for our TSP balance is MetLife. If Metlife goes into bankruptcy, what will happen to those people who have purchased an annuity from Metlife? If there is a chance that I could lose my annuity because of this company going under, what would you suggest I do with my TSP balance when i do retire? A. Your annuity might be paid in full or in part or not at all. It depends upon what happens. Your annuity could be paid out of available funds even in the event of bankruptcy. Your annuity could be sold…
Q. I am a U.S. Postal Service employee covered by CSRS and I have a fellow employee covered by FERS with the same question. Aside from the “catch-up contribution,” is it possible for me to make a one-time contribution to my TSP account. For example, I would like to take the amount of my federal income tax refund and add it into my TSP. I realize that I have already paid income taxes on this money and won’t enjoy the full tax benefits of a “pretax” contribution. I am more interested in building up my TSP balance. FYI, I am…
Q. I retired under CSRS in 2006 . I already took out my one-time withdrawal of TSP a couple years ago. I did not go to work after retiring and do not have enough credits to receive Social Security. I also do not have any other IRAs or a Roth IRA. My question is, if I want some of the money, is there anything I can roll it into where I can draw out partials when I want, or is the only other thing I can do is withdraw it all and pay the taxes on it? I don’t want…
Q: I’m recently separated, keeping the house, and want to refinance in order to release my wife from the original mortgage. I do qualify to refinance, but am upside down by about $30,000. I’m a federal employee, and would have to take the $30,000 out of my TSP retirement account. If I make an early withdrawal from my TSP account that will be used solely for refinancing my home, will I still have to pay tax and the IRS early withdrawal penalty on the $30K? A: None of the circumstances you mention will excuse you from the early withdrawal penalty.…
Q: In answering a previous question about maximum nondeductible contributions to Individual Retirement Accounts, you wrote: “Your participation in the Thrift Savings Plan should not prohibit you from making the maximum nondeductible contributions to a traditional IRA in 2009.” Is the answer the same if I have a Roth IRA instead of a traditional IRA? Can I max out both TSP at $22,000 and ROTH IRA at $6,000? A: The rules are different for Roth IRA contributions. You’ll have to use an online calculator or the rules contained in IRS Publication 590 to see if you can contribute to both.
Q: I just read the “lost decade” article in Money Matters and I am wondering why you did not mention the L Funds. I have all my Thrift Savings Plan funds allocated to L Funds as recommended to me since I am in my 10-year window of retirement. Is that a mistake? Should I also diversify into the other five individual funds? A: I’m not a fan of the L Funds, but I can’t say that using them is a mistake. The problem I have with them is that it’s difficult to know whether the robotic allocation shifts they make are…