Browsing: TSP

Q: I was told that if you withdraw money from your Thrift Savings Plan account, you are subject to a 20 percent fee and then also subject to pay taxes on the money as income at the end of the year. A: There is no fee to withdraw from your TSP account. Under certain circumstances, there will be a tax deposit withheld from your withdrawn amount, which will be credited against your tax bill for the year.

Q: I consider myself very good at saving money for and with my family as well as managing my family’s budget. We have a young toddler, and my wife and I are still building our family. I am 34, have been with FERS (active employee) since I was 33, and I have four years of active military time I am almost done buying back. I have my wife saving a little more than 11 percent of her incoming from teaching school (company doesn’t match), and I save 15 percent per paycheck (20 percent if you count my federal match). I…

Q: What are the options of drawing out money from my Thrift Savings Plan when I retire? Can I draw monthly payments without buying an annuity and leave the majority invested? A: You have a number of options for withdrawing the money, including partial and full withdrawals. The details are explained in the materials available here. You may elect monthly withdrawals, which are a form of full withdrawal, without buying an annuity, and continue to invest the remaining account value as you choose.

Q: I retired in March 2008 (civilian with DODDS under FERS). I need to take an RMD this year as I am 70.5 years old in December 2010. I received the Form TSP-70. I am a bit disappointed that the government has the option of taking an annuity on the form ( I don’t think they even mention the annuity is with MetLife Insurance) without telling you in a brochure (from MetLife, maybe) how much MetLife’s administrative fee, surrender charges, and other pertinent costs are. Is there a good non-biased site to go to to determine which is better (depending on circumstances), TSP…

Q: If I purchase an annuity from MetLife with my Thrift Savings Plan funds and the company goes bankrupt, will the government back my money somehow? With the way financial institutions and large corporations are getting into financial dire straits, it just doesn’t seem safe to turn it over to anyone without some kind of government backing or guarantee. A: There are state-run solvency pools which back up the guarantees of insurance companies, but their terms vary by state, so you should check with your state’s insurance regulators for details. It’s also possible that, if MetLife went bankrupt, your annuity…

Q: Are there any special considerations in terms of penalty when withdrawing from my Thrift Savings Plan if I have a life-threatening condition such a severe aortic stenosis? I’m a 58-year-old Federal Employees Retirement System employee planning to retire on 2010 30 years of service. A: Since you will be retiring during or after the year in which you reached age 55, you will have access to your TSP account assets without penalty.

Q: I am no longer employed and have reached age 70½.  I received notice from the Thrift Savings Plan that I have to remove my money or start taking monthly payments, buy an annuity, or some combination of removing my money and buying an annuity. I know about the Required Minimum Distribution and was fully prepared to take that amount out. Am I not able to leave the remainder of my account intact after I take the Required Minimum Distribution? This is really a shock to me if I have to remove the money and pay taxes on it, or…

Q: I’ve just read your latest column, entitled “Odds Favor Gains in Market.” I have about $350,000 in my Thrift Savings Plan. Just before the major slide occurred in August 2008, I transferred all funds to the G Fund. I then shifted about 25 percent to the L2020 funds. I continued all new contributions in C, S and I Funds. I was lucky to the extent that I only lost about $20,000 due to the downturn. My problem was when to put the  funds, which now represent 67 percent of my funds, back into the other less conservative funds. Obviously,…

Q: Is there any way for me to see what specific stocks my Thrift Savings Plan is invested in? I can see the general funds, but what about specific companies? A: You’ll need to check the TSP Fund Fact Sheet for each fund for the description of the index on which the fund is based, and then research that index for a list of its components. For example, the C Fund tracks the performance of the Standard and Poor’s 500 Index, which is a proprietary, weighted collection of 500 stocks. By the way, there is no guarantee that the funds…

Q: I sold a private business several years ago and entered federal service. I have a large part of my portfolio in a Simplified Employee Pension IRA. Can I move my SEP money into my Thrift Savings Plan? A: Yes, as long it contains no after-tax money. Use form TSP-60.