Question
Regarding employees who leave federal service before retiring: Can you tell us about the process for applying to receive a refund on FERS, yes FERS, contributions.
Answer
If you want to get a refund for your retirement contributions then you need to fill out SF 3106 and return it to your HR (if you left the Fed within the last 30 days) or to OPM (if you left more than 30 days ago).
The bigger question however, is deciding if you really want to remove your retirement contributions. Often it can make a lot of sense to keep your money in the system to be able to get a deferred pension later.
Question
I’m 57 and will be retiring Dec 31, 2021 and plan to withdraw from my TSP every month. Do I have to draw the same amount every month? Can I skip withdrawing some months and start back 2 or 3 months later?
Answer
In retirement you can make a withdrawal request every 30 days. This includes withdrawals straight to you and transfers to an IRA. They both count as a withdrawal and only 1 of either one will be allowed every 30 days.
You can set up an automatic withdrawal where they send you the same amount every month or you can just do a manual withdrawal every time that you need it.
Question
Love your strategy, but how do I manage the buckets with the TSP? ie: divide up the buckets for short term and long term while drawing money out during retirement? Is it possible with the TSP or easier to do with an outside broker? Fidelity etc? Thanks!!
Answer
The bucket strategy can be a great retirement investment strategy and you certainly can do it in the TSP but the TSP does have some limitations. For example, when you withdraw money from the TSP you can’t choose which funds you withdraw from. It comes out proportionally.
From this aspect it may be simpler with an IRA. That being said, there are certainly a number of advantages to the TSP as well.
