TSP Thrift Savings Plan

Understanding Your TSP May Help You In Planning For A Secure Retirement.

With low interest rates and a volatile stock market, your retirement savings balance may have dropped.  One of the guidelines of your TSP is that you can roll it over at age 59 ½, to a traditional IRA allowing you more investment options than you currently have.  This will also give you a chance to work with a licensed investment advisor to create a retirement plan designed for your retirement years.

As most families get close to retirement, they look for ways to create a lifetime income for both themselves and their spouse.  If you are getting close to retirement or have already retired, it is important to create a plan that may help you be financially secure during your retirement years.  This would be a good opportunity to sit down one-on-one to create a plan for your retirement future.

Some important topics to think about:

• Did a financial advisor help you pick your retirement funds?
• Do you know what happens to your TSP balance at death?
• As of January 1, 2020, the new Secure Act was put in place – do you understand the tax liabilities it may have created for your family?
• Did your retirement balance drop due to the stock market drop of 2020?
• Do you have a plan to create a lifetime income?

If not, this is your opportunity to sit down with a licensed investment advisor representative and make a plan for your retirement.

Understanding Your Spousal Retirement Benefit

Whether you are part of CSRS (Civil Service Retirement System) or the FERS (Federal Employment Retirement System), you have an option to choose to pass on part of your retirement pension to your spouse, but that benefit comes at a price.  Although this can be an important part of your retirement plan, there could be a better way to protect your spouse from the loss of income if they were to survive you.  For many federal employees, using the same money they would pay to buy their spouse a part of their retirement income, they could instead use those funds to buy a tax free life insurance benefit.  Some new life insurance policies will allow you to use the benefits of their life insurance policy to pay for home health care and/or nursing home expense from tax free money with draws from the policy.  Although this plan may not work for everyone, many federal employees can maximize the amount of income they receive from their pension and still take care of their spouse using tax free benefits.  This is an opportunity to see if this pension maximization strategy will help your family plan for a more secure retirement.