Treasury Borrows From TSP G Fund... Again.... How Does This Impact You?

Join Jeff Roediger and Financial Adviser Larry Prascus as we address these important questions...

How does this impact TSP Participants?

Can they withdrawal funds?

Can they move assets from G Fund to other sub accounts?

Listen in as Larry addresses these questions and more... Also, go to www.fedresource.com 
and Download a complimentary Federal Employee Retirement Workbook.

Transcript

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This conference, this conference will now be recorded. Hello, everybody, welcome to our podcast series hosted by yours truly Jeff rediger, bringing Wall Street to Main Street, and ultimately replacing Wall Street with Main Street. That's our mantra. This series podcast is dedicated to the consumer. As I interview financial advisors who specialize in certain audiences. Today, our guest is Larry Pascal's Larry's a federal retirement consultant out of Annapolis, Maryland, serving federal employees nationwide. And we have a very important topic we're going to discuss that we're getting a lot of calls on. So Larry, thanks for joining me. Yeah, glad to be here. Okay, so the topic that we're going to cover and articles been published over the last 30 days regarding what's happened before, and that is the Treasury borrowing to pay bills against the thrift savings plans, g fund. And, you know, Larry, this isn't the first time they've done this. That's right. As a matter of fact, government has bartered on our social security. And they've made good so far. so far. Yep. So that continues. Okay. For those federal employees out there, how does this impact the TSP participants? Well, I can see how can this can not set well with with a lot of us, after all, it is your money you worked and saved. And that's one of the guaranteed options that's available, even though it's paying a low rate, currently, but somebody's borrowing any money without you knowing it? Or without even asking? So we are depending on the government to make good on on on that borrowing, which I think they'll probably happen. Since they've done it before on Social Security, as I mentioned earlier, and they've been paying on our social security checks. Another question we get is, can they move the Can They move the assets from the G fund to other sub accounts? That's a question we've got more than once? Oh, absolutely. It's pretty simple. You know, you set up the account on tsp, that I've noticed that most employees have done that you can do that on online. However, if you're in the G fund, it's probably because maybe concern about market volatility, as the market has just been going up, up and up, and a lot of us just don't believe it can continue, it might eventually come down. So, what is a safe option and many of us have selected the G fund. So, is there another safe option? Well, the another possibility for conservative investors, though need to mention it is not guaranteed, but it is a low low risk investment and then that is the F fund. As many of you probably know that there are the five basic funds in addition to the lifestyle funds, you know, we have the D f S II and, and, and the FBI and along with the G fund. So, the we may take a look at the F Fund, the 10 year average return on that has been 3% that's also the three year average. However, the past year the past 12 months, it's averaged about 1.12 of a percent. So, it will fluctuate but it is a low investment and it fluctuates very, very little. So it is a conservative option. So, there is another option the we may want to think about that is not included in the funds. So then another question that I get is if the participant in the Thrift Savings Plan in the G fund wants to withdraw funds, are they able to do that if the if there is a loan against the The phones, well, before they can withdraw any funds from the TSP, that loan has to be paid off. or otherwise, if it gets distributed outside of if it gets transferred, then taxes will be due on the amount that's a loan. Okay, so However, you can transfer out, let's suppose that you don't have have a loan. And the way that would be done, even while you are still working, you can withdraw into an IRA, it's a tax free exchange, the way that works is you first need to set up an IRA account with an outside private vendor. With an investment firm or insurance company, it's an annuity, and that it can be a tax free transfer rollover, it's called an in service withdrawal into an IRA. So if you once you set up the account, then it requires sp 75 form. And that's something that we help our clients with how to fill that out, and can be transferred into an IRA of the choosing, it can be a traditional IRA, it can also be a Roth IRA. But of course, a Roth would have to transfer into another Roth that would be in the private sector. So that is an option that is available. And that may be the suitable option, depending on a particular situation, what your goals are, and what your goals are. So that could be something that we could take, we'll take a look at. So somebody out there listening said, You know, I just need to review my retirement. Larry has a wealth of knowledge on federal benefits. And so you offer a no cost consultation, correct. If somebody is out there, say I just have some questions, I'm not sure. What is the best way for them to contact you if they're listening in right now. All right. To get to my direct line, the toll free number is 888-545-8840. Repeat that 888-545-8840. And that's extension 710 710. Also, you can reach me by email at Larry P. ed. gov resource.com. That's Larry spelled la RR y, and then letter P at Gov resource.com. Okay, and then also, for federal employees out there, you may want to go check out fed resource calm. A lot of great information. 12 must answer questions each of you should address before retiring on there. We have podcasts that we've recorded on quite a few subjects with our retired federal instructor, Elizabeth then. And there's also a retirement report that you can, you can download. It has a budget worksheet and questions that you should be thinking about before retiring, so you can download that free of charge on the site. So go check that out. All right, Larry, I know you're busy. So I appreciate the time today. And hopefully we've cleared up some of the issues that the federal employees regarding their tsp have been feeling a little bit and now they have another resource they can reach out to so I appreciate it. All right. You're quite welcome. All right, everybody, look for the next drop on future podcast. various subjects we're covering a lot. And we look forward to serving you either today or in the future regarding retirements and benefits. Thank you very much.