Q. I have $300,000 in my Thrift Savings Plan and am retiring soon. I plan on taking $40,000 out to put into my checking and then roll the remaining $260,000 into an account that I can make monthly withdrawals for the rest of my life. I am 60 years old. What percentage of this should I take out monthly (I’ve heard anywhere between 4 percent and 6 percent) … to make it last? What is your recommendation? A. First, you should take out enough to create a spending fund and then take the monthly withdrawals from your TSP account. No…
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Q. I started taking 4 percent of my Thrift Savings Plan when I retired. When I reach 70½, will I have to make a total withdrawal or will I be able to take life expectancy payments? I am CSRS Offset if that makes a difference. A. You may change the amount of fixed monthly payments once each year or you may switch from TSP calculated payments to fixed payments, but not the other way around. See the publication at https://www.tsp.gov/PDF/formspubs/tspbk02.pdf for info.
Q. I have been taking monthly withdrawals from my Thrift Savings Plan account for several years. I will turn 70½ this year. Do my prior withdrawals affect the amount of the required withdrawals? A. The required withdrawal each year is based entirely on the closing balance in your account at the end of the calendar year preceding the year for the withdrawal.
Q. I am retired FERS and just turned 70 and need to begin taking TSP withdrawals. I am looking to roll the entire amount into Fidelity and was wondering if anyone has done so and how their experiences have been. They do seem to have more options and perhaps can help earn more than TSP, but I’d appreciate any comments. A. Fidelity’s expenses will be higher than the TSP, so the expected rate of return on your assets will be lower. Leaving the TSP for higher returns is a sucker’s bet, plain and simple.
Q. Retirement date: Sept. 15, 2017, at age 62. Retire as GS-13, Step 7, FERS, with 38 years total service (figure includes my nine years military, bought back). TSP: About $250,000, Social Security paid in full to receive full benefits for a 62-year-old. I live in Washington state. I expect to pay spouse survivor benefits, federal income tax. Should I leave my Thrift Savings Plan alone or draw it out entirely? A. Leave your TSP alone for as long as possible.
Q. I have a Thrift Savings Plan account, with about $35,000 in it. I need to make a down payment on a house I want to buy. I have already withdrawn $14,000 this year for other purposes. I probably will need to withdraw some more cash. What forms will I need to use? And what are the pros and cons of withdrawing this additional amount? A. You’ll find the forms you need at www.tsp.gov. The pros and cons of taking the money from the TSP will depend upon your circumstances.
Q. I am facing furlough soon. I already have one Thrift Savings Plan loan. Can I withdraw money from my TSP on a hardship withdrawal basis because of the furlough? I realize, if I did, I would have to pay taxes on it, etc. A. The furlough alone does not qualify you for a hardship withdrawal. To qualify for a financial hardship withdrawal, you must have a financial need for at least one of the following reasons: * Negative monthly cash flow. * Medical expenses (including household improvements needed for medical care) that you have not paid and that are not…
Q. I will retire within the next eight years. When I get ready to withdraw my Thrift Savings Plan, can I do it at various intervals or annually? I hear you may have to take it all out at one time. A. You may withdraw your money as a lump sum or through monthly withdrawals. Visit www.tsp.gov to learn more about your options.
Q. If I have left the federal government at age 57 and want to withdraw from my Thrift Savings Plan account, is there a penalty? A. No.
Q. I am about to divorce my husband, who works for the Federal Aviation Administration. 1. Can I keep his health insurance as an individual? Does this cost anything to him? How much will it cost me? 2. How can I be eligible for his life insurance after divorce? 3. Which is more beneficial: Getting a survivor benefit or getting a higher pension? 4. When can he start taking money from his Thrift Savings Plan? A. You can’t withdraw money from his TSP account. Your divorce settlement will govern how the TSP is divided and distributed and you’ll likely wind…