Ask The Experts: Money Matters

By Mike Miles

2020 fund

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Q. I heard someone mention the 2020 fund and that they also invest normally. All I can figure is that she invests in the L2020 fund. Is that possible, and how does that work? I did not think you could have a regular investment like the G and C fund, for example, and still have and L fund.

A. You may allocate all or a portion of your account to one or more of the L Funds, just like any of the basic TSP funds.

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Wait for TSP withdrawal

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Q. If I’m still working at 70-1/2, do I have to start drawing my TSP, or can I wait until I retire at 72 or 73?

A. You may wait until you retire. Your first RMD payment is due by April 1 of the year following the calendar year in which you reach age 70-1/2 or retire, whichever is later.

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TSP eligibility

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Q. I am a firefighter with a county department, and also prior military. Since being discharged and starting my new career, I haven’t been able to figure out how to continue investing money into my TSP. Am I unable to do so, now that I am out of the armed services? Or am I just not looking in the right place? Read the rest of this entry »

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TSP withdrawal

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Q. I was told I can’t take money out of my thrift savings while I’m out of work on disability. Why not?

A. If you are still a federal employee, you are subject to the rules governing in-service withdrawals.

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One-time withdrawal

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Q. I retire in less than a month under FERS. As soon as I retire, I plan to use the option to withdraw my TSP in monthly increments that I decide every year (I am not using the life expectancy or annuity options). I also want to do a partial withdrawal (not much of it, just enough so I have a good savings account to fall back on). I know I can only do it once. I assumed, or read, that the one time had to be immediately upon separation. I do not really need the partial-withdraw funds right away, but do not want to miss the opportunity to do it. Can you do your once-in-a-lifetime partial withdraw any time after you retire? Read the rest of this entry »

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IRA rollover

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Q. I am going to retire soon and plan to roll over my voluntary contributions to an existing Roth IRA. Can the voluntary contributions be rolled over to a TSP Roth account instead?

A. No.

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Minimum distribution date

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Q. When must I begin making my required minimum distribution? Since I turn 70-1/2 late in the month of April, I’m not sure about the requirement.

A. If you’re separated from federal service, your first distribution, for tax year 2015, will be due by April 1, 2016. If you’re still working, then it won’t be due until after you retire.

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TSP beneficiary designation

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Q. After filling out many beneficiary forms, I have found the standard beneficiary line to be Spouse, and then equal shares to offspring. This was my desired process anyhow. Does TSP have a similar beneficiary plan assuming no prior beneficiary designation? Read the rest of this entry »

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TSP taxation

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Q. Are all TSP withdrawals subject to the 20-percent federal tax withholding, including full withdrawal by way of monthly payments? And is this done automatically when you set up your payout options with TSP or do you need to complete a form?

A. Not all TSP withdrawals are subject to mandatory withholding. See the table on Page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for the rules. Mandatory and default withholding happens automatically. Anything else, you’ll have to request.

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TSP risk

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Q. I am 25 and just started my TSP and want to invest in a very risky fund. What would be best for risky? Or should I take a different approach or is risky fine for someone my age? I am a risk-taker in life. Read the rest of this entry »

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