By Mike Miles
July 31st, 2014 | TSP withdrawal
Q. Is there a way I can get federal taxes deducted from my TSP withdrawals. I am currently receiving a monthly payment.
A. Yes. Use form TSP-78: https://www.tsp.gov/PDF/formspubs/tsp-78.pdf.
July 31st, 2014 | Investing
Q. I retired nine months ago after 35 years of federal service. I am a CSRS annuitant. I am unsure of the best avenue to take regarding the opportunity to withdraw all or some of my TSP when I am 59-1/2 (I will be 56 in August). Like any investor, I am worried about the repeat of the 2008 stock market failure. I am considering withdrawing half of the balance and moving it into my money market account and converting the balance into a lifetime annuity. Read the rest of this entry »
July 30th, 2014 | Investing
Q. I am 25 and I am almost at the four-year service mark. I have been contributing since I started working for the federal government as a GS-07 at 5 percent. I am a GS-12 and started contributing 15 percent about five months ago (10 percent ROTH). My current allocation is 50 percent in C and 50 percent in S. I am trying to diversify my allocations a little better. Please help me with some feedback as to which other categories I should looking. Read the rest of this entry »
July 30th, 2014 | TSP withdrawal
Q. I want to pay off a few student loans before I retire from the military. I want to use my TSP to do so. Should I convert my TSP to a Roth IRA so I can avoid the heavy withdrawal fees?
A. There are no fees for withdrawing money from the TSP. All withdrawals from the TSP (except contributions you made from tax-free combat pay) will be subject to income taxation and, unless you qualify for one of the exceptions listed on Page 7 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf, any withdrawal you take before reaching age 59-1/2 will be subject to the IRS’ early withdrawal penalty. You should seek advice from a CPA before proceeding with this. You might want to consider taking a TSP loan to pay off the student loans, instead.
July 29th, 2014 | TSP withdrawal
Q. Is a TSP age-based withdrawal, taken while an employee is still working, credited toward the required minimum distribution when the employee later retires?
A. Only if it is taken during the year subject to the RMD.
July 29th, 2014 | Investing
Q. I am a retired federal employee since July 1, 2011. Because of the IRS rules regarding RDA if you’re 70-1/2 years old. I decided to withdraw an annuity of $1,500 each month. What is the best investment as to where to put my $1,500. By the way, this amount is below the 4 percent commonly used by retirees as a yardstick.
A. You should invest the money in the safest place that is highly likely to produce a sequence of periodic investment returns that will support your future financial goals. If you’re not sure what that is, I suggest that you put the money in the bank and contact me for help.
July 28th, 2014 | FERS
Q. I’ve read about the Social Security reduction if your income is above a certain amount. Does the calculation for that amount include the FERS pension and TSP annuity payments? In other words, does the Social Security Administration consider my pension and TSP payout to be “income” they will reduce against? Or is the reduction only against “wages” from actual employment income after you reach Social Security retirement age? Read the rest of this entry »
July 28th, 2014 | TSP withdrawal
Q. I retired April 1st this year at age 72. When do I have to start taking money out of my 401k and what percentage would it be?
A. I don’t answer questions about 401k accounts in this forum, but I will answer the question as though it was posed about the TSP. Your first RMD is due by April 1, 2015. I can’t calculate the amount of the RMD from the information you’ve provided, but you can do it using the instructions contained in IRS Publication 590 or using an online calculator from a trustworthy source.
July 25th, 2014 | TSP contribution
Q. I plan to retire under FERS in December 2020 at age 66. All my investment is in the G Fund, $350,000, as are my allocations at 100 percent. I was advised to move 60 percent to the C fund and 40 percent to the F fund ASAP with the same allocations. I consider this a risky and aggressive move considering my situation, the economy, and that the S&P is overdue for at least a 20 percent correction by the end of this year. What do the experts advise. Read the rest of this entry »
July 25th, 2014 | TSP withdrawal
Q. I retired over a year ago and just started working again. Can I transfer my TSP account to my new company’s retirement savings plan without a penalty? I’m 54 and plan to work until age 65.
A. Yes, but it might be a bad idea. You’ll probably be better off keeping your TSP account and transferring your private-sector plan balance into it after you retire.