How (Not) to Manage Your TSP During a Pandemic

Now is not the time to panic, even if you’re close to retirement.

Not surprisingly, given the recent performance of the stock market, there’s been a lot of activity lately in the Thrift Savings Plan. 

“We have had a spike in inter-fund transfers,” said Kim Weaver, the TSP’s director of external affairs, on the TV show Government Matters this week. “But that has been from 5% of our participants. Ninety-five percent of participants have done nothing. But what we would like to urge people is to consider what their plan was ... and stick with their plan." 

It is natural to be a little jittery right now with the volatility of the stock market due to the coronavirus pandemic, and to be concerned about retirement in general. Here’s an email I received earlier this week:

I am under the Federal Employees Retirement System and submitted my retirement paperwork back in December 2019. I’ve worked for 22 years in the federal government, and am retiring on March 31, 2020. I decided on that date long before all of this happened and I also applied for Social Security and will be receiving my Social Security starting in May 2020.

However, as you know, the third leg of our FERS retirement is our TSP, which I pulled out last September and placed in the trust of a very reliable financial adviser to manage for me. I also have some remaining funds in the TSP that have accrued since Sept 2019. I have been aggressively saving in my TSP since I started with the government and even contributed to the catch-up contribution. Now I am watching my life savings for my retirement decline a little more every day, and I don’t have the time to make it up, like I did the last time the market dropped drastically.

It is my understanding that all of my paperwork has been reviewed and approved; however, I still haven’t received the estimate of my annuity due to the software that our agency uses for computing our retirement being down. So I don’t even know how much I will be receiving monthly. I am in the middle of the checkout process, which now has to be completed electronically, rather than face to face. Hopefully, that goes as planned. I really think it’s too late for me to stop and delay my retirement at this point, so I’m at a loss here as to what to do. It looks like I am going to have to get a part-time job after retirement—which I hadn’t planned to do—if I can find one.

My response: If you don't feel financially ready to retire, it’s not too late to rescind your retirement application. This is a voluntary action, and you haven’t left yet. According to this guidance is from the Office of Personnel Management, “an agency must permit an employee to withdraw an application before the effective date of separation” unless “it has a valid reason and explains that reason in writing to the employee.”

You can expect that retirement processing will move more slowly during this period of national and world crisis. If this worries you or if you don't have a three to six month emergency fund in place, you should consider delaying your retirement until you feel more certain and life returns to normal.

You mentioned that you withdrew most of your money from the TSP and put it in the “trust of a very reliable financial adviser.” When a financial professional asks you to move your money from the TSP prior to your retirement (or after your retirement), they should provide a very clear reason for doing so. 

I hope your financial adviser recommended that your investments be rebalanced to correspond with your plans to retire this year. That doesn’t mean you’d be immune to volatility in the markets, but you should have some of your savings allocated to a more stable investment you can withdraw from for income in retirement without being exposed to changes in the market. 

It’s common for financial advisers to reach out to their clients and assure them during times of uncertainty like this. I hope yours has done so. 

Here are a few more tips and resources for those who are planning to retire this year, or who have recently retired. :

Finally, this reminder from the TSP is relevant during this time of uncertainty: By the time you react to the situation, the market may be moving in the opposite direction. If you miss one or two brief upswings in a decade, your investments may underperform the average market return for the entire period. So stick to your plan.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.