tsp loan
Can You Participate In The TSP After Retirement?
Your Thrift Savings Plan (TSP) is funded via payroll deductions. Therefore, once you are no longer an employee your participation in the TSP stops as far as being able to make contributions. However, you don’t have to take your money out of the TSP, you just cannot put money into it.
TSP After Leaving Federal Employment – TSP Withdrawals
If you leave service and decide to make a TSP withdrawal, you may do so in two ways. You may make a partial TSP withdrawal or a full-withdrawal. You can make a partial withdrawal of $1,000 or more. You can make a request for a partial withdrawal online or use Form TSP-77. If you make a full withdrawal you can request a single payment withdrawal of your entire TSP balance. You may also request a series of monthly payments. In this way you can choose a specific dollar amount to receive each month or you can receive a monthly amount based on your age and your account balance. If you are requesting a specific dollar amounts, the monthly payment must be a minimum of $25.00.
TSP-77 Form
TSP Annuity
You may also elect a TSP life annuity. The TSP life annuity pays you a monthly benefit for life. The TSP will purchase an annuity for you from their provider (Currently Metropolitan Life Insurance Company – MetLife). Make sure that you read up on the pros and cons of purchasing a TSP annuity directly through the TSP (We at PSRetirement.com suggest to strongly consider NOT taking this option). You may also mix up your withdrawals. You may use the methods outlined in the TSP Full Withdrawal option in a number of combinations – single payment, TSP monthly payments or the life annuity. You can combine two options or all three, which ever fits into the plans you have made for you and your family and always make sure to speak with a trust Financial Professional before making any decisions.
Read over your TSP account(s) and make sure you understand how your TSP works in retirement and how to maximize your federal retirement benefits. If you have put a retirement action plan in place, then you want to gain as much information as possible to help you live in retirement on your own terms. FERS employees have to be especially cautious, yet assertive, by fully funding their TSP whenever possible because the TSP is the larget monetary component of the FERS retirement system.
How you manage your financial affairs is an individual matter. However, just like any good work, it takes time to examine and analyze to choose the best options that fit your situation. No two situations are alike, so don’t take a position because it sounds good. Use your planning tools and take a position because it works for you.
P. S. Always Remember to Share What You Know.
RELATED TSP ARTICLES
Thrift Savings Plan (TSP) Withdrawal Options
For Postal Employees – LiteBlue and the TSP
Federal and Postal Employees – Choosing a Financial Professional
Is All ‘Your’ TSP Money Actually Yours?
TSP: Completing the TSP 17
TSP Beneficiaries
You are required to complete the TSP 17 form so that the TSP can determine potential beneficiaries. The TSP 17 has several parts and must be completed with care. Always check with the TSP to make certain that all forms you are requested to complete have been updated and are current. When new TSP forms are rolled out all previous editions of the form become obsolete and cannot be used. So make sure you are completing the right form.
TSP – 17
The information relating to TSP 17 Form (also referred to as the Deceased Participant Form) has a number of sections that require your careful attention. Section 1 is information about the deceased participant. Section 2 is information about the person submitting the form. Section 3 is information about potential beneficiaries. This is the part that can be very challenging. You may not have all of the information and you may not know the information. When you don’t know the information simply check the – Don’t Know- box and follow the instructions. Section 4 of the TSP 17 form asks about detailed information about potential beneficiaries. Remember, provide as much information on the TSP 17 form as you can and if you don’t know write on the line -Don’t Know. Section 5 asks that you provide referral information so that they can contact someone else who might be able to provide the information you don’t know. This section needs you to provide any information possible even if a telephone number or address is not known. Section 6 of the TSP 17 form is the additional information area where you provide any additional information you think might help with the distribution of the deceased participant’s account. Section 7 is the certification area where you affix your signature to affirm the information given.
Don’t forget to attach a copy of the deceased participant’s death certificate. The more thorough and accurate you are, the quicker the agency can execute the process.
P. S. Always Remember to Share What You Know.
RELATED TSP ARTICLES
For Postal Employees – LiteBlue
Federal and Postal Employees – Choosing a Financial Professional
Is All ‘Your’ TSP Money Actually Yours?
TSP Loan – A Good Idea?
Thrift Savings Plan Loans – If you are thinking about taking out a loan here are some items to consider about possible a TSP Loan. TSP loan interest rates, for new loans, can be as low as 2.375%. I don’t think the rates can get much better. However, if you are thinking about taking out a TSP loan, you need to make sure you are exercising and implementing what you have learned about financial literacy.
There are a number of questions you need to ask yourself before you take out a TSP loan even if the rates are as good as they are. Interest rates are down and if you are thinking about getting a loan, making a house purchase or any other major purchase, the low interest rates we are currently enjoying is certainly a huge draw.
However, what if you are thinking about retiring soon, is it wise to take out a TSP loan from your TSP account? Consider this. Your TSP is a way to help you save for retirement while realizing matching funds from your agency if you are under the Federal Employees Retirement System (FERS). The TSP acts as a tax deferment for those employees under the Civil Service Retirement System (CSRS), because there are no matching funds from the agency.
If you take money from your TSP even via a TSP loan, you are impacting the value of your TSP account designed to enhance your finances in retirement. Also remember that a TSP loan is a loan and loans must be paid back. Even when opportunities sound good, be sure to evaluate your own individual situation and circumstances to determine what is the best fit for your retirement future.
P.S. Always Remember to Share What You Know.
RELATED TSP ARTICLES
Thrift Savings Plan (TSP) Withdrawal Options
For Postal Employees – LiteBlue and the TSP
Federal and Postal Employees – Choosing a Financial Professional
Is All ‘Your’ TSP Money Actually Yours?
Financial Advisors and Federal Employees
I was recently asked if my trainer of financial advisors and planners interested in the federal workforce differed from training federal workers? Without missing a beat, I said most emphatically “It certainly does.” It is more intense because financial advisors for federal employees need to know more about the Federal Retirement Systems than the federal workforce themselves.
The Federal Retirement Systems probably have some of the best benefits you will find all things being equal. It, too, is a system of immense rules and regulations that can be undeniably complex, even for someone who has spent a career absorbing all of the nooks and crannies.
The Civil Service Retirement System (CSRS) often referred to as the old retirement system was enacted in 1920. The world has changed a number of times since then and many amendments have been made to the system. One must be constantly updated on the changes so as to be an excellent source of information dissemination. I find that many financial advisors and planners I work with who wish to begin helping the federal workforce think of simply helping the workers manage their money. There is nothing wrong with that premise only that would leave the federal employee missing out on a great number of potential benefits
Federal Employees Partnering with Financial Advisors
Financial Advisors and Financial Planners (really the same thing) are important pieces of the partnership needed to guide the federal employee workforce to safe harbor so that their sails can withstand the uncertainty of storms that will surely come in their lives. To strategize such a journey requires acquiring a very sound knowledge of the Federal Retirement Systems (FERS, CSRS, FEGLI, FSAFEDS, etc.).
We are not talking about becoming Federal Retirement Specialists, but we are talking about partnerships that will equip these professionals to help manage the financial resources of a very unique group of employees. When you cast your net to work with the federal workforce in helping to plan their retirement, it needs to be cast wide because federal employees are as diverse as their many duties and responsibilities.
Although there are two retirement systems technically, there are a number of aspects that apply to special categories of employees as well, like firefighters, air traffic controllers and law enforcement officials.
Yes, my approach to conversational training with financial professionals is much more intense and absolutely focused on ensuring they know the language of the federal retirement systems and its workforce so that they can give them the tools necessary to retire in comfort and security.
If the federal workforce gets a course in the basics of the Federal Retirement Systems, then the professionals they entrust to handle their hard earned money – get the ADVANCED-ZERO TOLERANCE version with lots of hand-holding collaboration. I learn as much from Financial Advisors and Planners as they learn from me. We are all invested in making life in retirement and before a little easier to maneuver for federal workforce.
Financial Advisors who are knowledgable in federal and postal benefits need to be able to help you with your TSP account and Thrift Savings Plan fund choices, your Federal Employees Group Life Insurance (FEGLI) selection (both while employed and any potential reduction elections that you might want) and also possibly help you with your FSAFEDS and FEHB elections.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
