Question 1
Myself and others at my job are not getting the covid shot. Some are too young or don’t have enough time in service to retire and those like myself, are eligible to retire but not ready. Any advice on the disposition of our Thrift Savings Plan and retirement if we are fired. I assume it is better to retire instead of getting fired but am not sure. Any help would be appreciated.
Answer 1
The good news is that the vast majority of the time, even if you are fired, you are still eligible for all the retirement benefits that you have accumulated. This includes your pension and your TSP (Thrift Savings Plan).
The only exception to this is if you commit a serious crime against the country like giving confidential information to a foreign government.
So if you are already eligible for retirement and are planning to retire soon anyway then being fired might not make much of a difference. But of course retiring sooner than you had planned may mean that you won’t have as much income as you’d hope.
However, if you aren’t eligible to retire right away then you as long as you have at least 5 years of service then you’d be eligible for a deferred retirement. Basically, a deferred retirement is getting a pension later, usually at your minimum retirement age or at 62.
But one of the biggest downsides, however, of a deferred retirement is that you won’t be able to keep your health, dental, vision, or life insurance once you leave the government.
So long story short, being fired won’t make a difference if you are already retired but it can certainly mess up your plans if you aren’t prepared for it.
Note: If a federal employee is retiring under a VERA or early-out retirement then being fired can make them ineligible for the early out retirement and they’d have to qualify for a different type of retirement such as deferred retirement.
Question 2
Love your videos/advice! Recently retired and allocated TSP into buckets. Do you see anything wrong with putting my cash/bond portion into the L Income fund — anywhere from 25% to 35% for 3-5 yrs cash needs — with the rest invested in the C, S, and I funds? I thought about the L Income because it has generally earned more than the G and F funds individual funds.
Answer 2
You are right. The L income fund does tend to do better than the G and F funds because it is partly invested in the C, S, and I funds which tend to do better over time.
Here is the allocation of the L income fund as of 12/31/2020
source: TSP.gov
But to answer your question, the L income fund can be used as part of the bucket method as long as you understand what is in the L income fund. If you know how it’s invested and it works for your bucket strategy then it can work great.
