Only if you retire at the year you turn 55 (50 for LEO). I don't know of any monetary limitations imposed by TSP. Since Roth was only introduced to TSP in 2012, with the 5 year and age 59.5 requirements to be qualified, withdrawing your entire balance could result in penalty in 2016/2017. Finally since most would be considered regular income, you may incur a huge tax bill for a large balance which is counter to the intent of saving for retirement.fattony wrote:Is there a limit to the monthly payment that you can request? I don't think that there is. It looks like you can put whatever you want in the monthly payments so I think you could drain the account using monthly payments in less than a year.
A Roth account is more flexible than and IRA.
Time is the only non-renewable resource.
Knowledge is the only sustainable competitive advantage.
https://share.robinhood.com/cliffow Buy free
https://r.mtf.io/FJvrJ Motif - Make ETFs
Back to the 10-step strategy, for income purposes it is not bad to keep that money predominantly in the G fund and then have growth capitol in other funds, but that can be done effectively with L funds and without IRA/TSP transfers. Simply chose the L fund that has the right proportion of G-fund. For discussion, lets say that that is 50% G and the other 50% S/C/I. When you pull an income distribution, say monthly to meet your regular budget needs (lump sums to be covered later), yes the distribution will come 50%G and 50% others, but L funds are rebalance daily. So, the day after the distribution the account will be rebalanced to 50% G and 50% others. If none of the L funds meet your allocation needs/wants, you can always have individual funds G/S/C/I/F outside of the L fund (or instead of) and manually re-allocate them monthly and attain the same goal. This is very similar to what the 10-step is doing once every 10 years, but the daily rebalancing automatically cashes out the S/C/I funds when they perform well and buys them back when they are cheap. This is the sole feature that has me very much in favor of L funds.
Regarding lump sum distributions, say for a vehicle or vacation: Such distributions from a non-Roth retirement source are costly since if they are large enough, they will put you in a higher tax bracket and in any event will be taxed at your highest incremental tax bracket. I would hate to have to pull out $100K for a $66K motorhome (since 1/3 of the $ would go to taxes). This is why you need a Roth IRA to cover such things. If there is not enough Roth to cover such wants, it is likely beneficial to get a loan for the RV and increase income distributions just enough to cover the loan if it keeps you in a lower tax bracket.
FYI - I am 10.5 years from retirement and have been investing a lot of time lately determining how to pull retirement funds effectively (from a tax perspective). l think I am a little low on Roth-type funds and will be maxing those and converting some conventional IRAs into Roth (incrementally so as not to hit a higher tax bracket).
crondanet5 wrote:fliegsc you obviously have not read the TSP rules. Also remember the higher the tax bracket the closer to becoming a millionaire.
Please elaborate on which rules (its not obvious to me); I believe I'm pretty knowledgeable on most of them, but I may have a deficiency somewhere and would appreciate fixing it.
I re-read my post. Perhaps my lump sum discussion implied you could take lump sums from TSP whenever you want. I know you can only basically take two (a partial and a full, but you can get three if you take a TSP loan out right before retiring - it converts to distribution some number of months after terminating employment). Anyway, the point of that discussion is that you really want to have and use a Roth IRA if you want to pull out lump sums. And I'm already a millionaire.
I have discussed this with Fidelity reps, and if you have the needed money in cash you can roll it out within 24 hours. Can you do that with TSP, and if yes, please list the steps.
I am not a knight trying to spear the TSP windmill. I want TSP members to be aware of TSP withdrawal restrictions and how they can best position themselves beyond age 70 and not in federal service. I am looking for answers.
2. After taking RMD, I would access my outside savings & money market account 1st and then my brokerage account for the balance.
3. Under 59.5 you could do a partial withdrawal or rollover to IRA (takes a month) and withdraw funds from that, but this would not be an option for me since I'm not willing to take 10% penalty or additional tax impact
However, individuals that have planned and have an emergency fund and several other retirement accounts would be highly unlikely to be in a situation you hypothesize cron. This would be something to talk to a qualified financial adviser about. I'd recommend someone with a CFA designation, FFS only and preferably with an accounting/finance background.
crondanet5 wrote:evil are you saying you could not emergency withdraw $100,00 from the TSP? Are you stuck with your monthly MRD and cannot access the cash balance? Is that what you are saying?
You: You retire and leave federal service. What do you do at age 70.5? And if you elect to receive MRDs how do you get an emergency $100,000 out of the TSP?
Me: At age 70.5, Required Minimum Distributions (RMDs) is exactly that and it is mandatory--not an election. You can withdraw more without penalty other than the higher taxes that would be due.
I'm saying that whether or not I could, that financially it would be a stupid move and therefore I would not even attempt to do so. I do not plan to ever withdraw $100K from TSP in emergency situation, a true emergency will be covered by medical, car, home or liability insurance less any deductibles. If I need more money 19 years down the road, I could set withdrawals to $10K per month (amount could be higher as long as it is above the RMD) but it would be paid out over a year. I don't know any situation that would require me to have $100K immediately. Your argument only reminds me that I do need to have a well funded emergency fund but that doesn't mean that TSP is bad--you just need to be able to manage within any limitations. Not being able to access your money immediately means you have to think about it and plan a little better. Since everything withdrawn from TSP is taxable income, it would be less of tax impact to sell assets in regular brokerage--taxed only on capital gains or take funds from outside Roth IRA.
a) XYZ shares trade flat or below the $31 strike price – the option will expire worthless and you keep the premium from the option. Repeat this as often as weekly or monthly, by using the covered call strategy you have successfully generated income (& sometime dividends) from this stock despite the share price doing nothing.
b) XYZ shares fall – the option expires worthless, you keep the premium along with dividends.
c) XYZ shares rise above $31 – the option is exercised, and your upside is capped at $31, plus the option premium. If the stock price goes above $31 you give up the upside but you’ve successfully sold the shares for a profit along with some additional income from the premium received.
Pending AllocationsUnder development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".
What else"Don't ever half-ass two things. Whole-ass one thing."
- Ron Swanson