Wednesday, November 28, 2012

Getting My Money Out of the Federal Government

I have decided, with my wife's concurrence, to withdraw all of our savings from my Thrift Savings Account with the federal government. Fiscal cliff being imminent or not, the chances are that the tax rates will soon rise and we do not want to be taxed at a higher rate in the future. Now granted, we may be taxed at a much higher rate, by withdrawing it all at once this year, than by withdrawing it over a few to several years if tax rates do not increase markedly, but that is where trust in government - or lack of that trust - comes into play. I no longer trust my money will remain 100% secure if I keep it in the hands of the government. I do not mean that my money will disappear because the government might steal it; my concern along those lines is that the government may wind up going belly up, unable to pay its financial obligations and then my money may disappear. Perhaps the same effect as it being stolen, just much more likely than someone actually stealing it.

I felt that way before I retired last year but was not sound enough, with the cancer treatments, to sit down, really give it the required thought, and decide to do it or not. Yet, I was pretty sure that is what I would wind up doing before this year was over. Today, I found out that it takes 2 to 3 weeks from the day I send my forms into them until I get the money in my hand. I still have enough time to get it this year. If taxes go up, then I will have known I did the right thing. If they do not go up, then I will wonder if I will have done the right thing but regardless, we will have whatever we have after taxes.

We do not have a heck o a lot of money in the TSP, so a big tax bite is going to reduce it significantly. With the TSP withdrawal added to my pension, my part-time job salary and Linda's two part-time job salaries - I think the tax bit will be substantial. Let me just say, my TSP balance is in the tens of thousands, not in the hundreds of thousands, of dollars that most others have contributed to said plan. I paid off my house early and thus we had little to put into the TSP over the several years that I contributed. I should have contributed sooner, just never saw the need. I see now that my whole roof, not just the shingles but the roof structure, may need to be replaced and it is sounding more and more like the insurance company will be paying less than I had expected.

Oh well, another one of those days with having to make: 'Decisions, Decisions, Decisions'! I have decided that either tomorrow or Friday, I'll be sending in the withdrawal form.

All the best,
Glenn B

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