TSP Retirement Question

[Octjan2]

I know we can leave our money in TSP when we retire but can not contribute anything to it. However, can we still do the 2 interfund transfers once we retire, in addition to taking out a monthly allotment? If the daily seasonals work out and we can expect to continue getting 20% returns, it would be wise to remain with the plans after retirement, when the compounding interest has the biggest impact.

[Midway]

Retirement does not change any IFT rules that I can find.

[klee]

It remains the same after you retire.

[crondanet5]

Tread carefully. If you need a large withdrawal can you get it out of the TSP Program? What if you need multiple large withdrawals, can you get them in a timely manner? I don't think so.

If you roll over your TSP Account into a rollover IRA you can access it Monday-Friday, possibly that day if it is in cash form rather than an investment that must settle first. And you can use ETFs that mirror the TSP Funds. And you can make more IFTs in your IRA than you can in TSP.

[mhayes]

What are the pros and cons staying with TSP after retirement? I thought TSP was good because of the low fees and the G Fund.

[evilanne]

I will continue to disagree with Crondanet on this because for me retiring before age 55, the rules for withdrawals are the same in TSP or in an IRA because of the IRS rules applicable to both and I don't have to worry about any penalty when I start withdrawal based on life expectancy. If you go with a discount brokerage, you have to make sure you comply with IRC section 72(t) to avoid penalties and extra forms would be required at tax time. If you go with a managed account at full service brokerage the fees will be higher. Using TSP before age 59.5 is advisable even if you intend to transfer to IRA at some point in the future.

[crondanet5]

That was for your situation. And I understand how difficult it is to give up the TSP Program. But my point is the difficulty extricating money out of the TSP in addition to the monthly withdrawals. Now if Octjan2 fits your age group, I'll stop. But if he is not in that part of federal service he might want to seriously review how the TSP Program works. Every retiring TSPer should be carefully aware of the need to be able to access your TSP Account if needed. Leaving it in TSP makes that very difficult.

[mjedlin66]

That was for your situation. And I understand how difficult it is to give up the TSP Program. But my point is the difficulty extricating money out of the TSP in addition to the monthly withdrawals. Now if Octjan2 fits your age group, I'll stop. But if he is not in that part of federal service he might want to seriously review how the TSP Program works. Every retiring TSPer should be carefully aware of the need to be able to access your TSP Account if needed. Leaving it in TSP makes that very difficult.

I understand your point. But hopefully we can help young people plan their retirement better so that they can reduce the need for lump-sum withdrawals.

By retirment, one should own their house outright, have health benefits for life, and have a steady income from TSP to 100% replace their salary. If they plan those three things well in advance, then they will be well off. Nobody should depend on social security or their pension. Save enough in your TSP to live on that alone. That way, social security and the pension are excess.

[crondanet5]

Such dreams! Are you not aware Trump's budget proposal eliminates FERS COLAs? And if that health care plan passes elderly will be paying huge premiums. Every former TSPer needs to position their retirement money so they can get at it when needed. The TSP Program does not allow that. Do diligent research.

[Winner]

That was for your situation. And I understand how difficult it is to give up the TSP Program. But my point is the difficulty extricating money out of the TSP in addition to the monthly withdrawals. Now if Octjan2 fits your age group, I'll stop. But if he is not in that part of federal service he might want to seriously review how the TSP Program works. Every retiring TSPer should be carefully aware of the need to be able to access your TSP Account if needed. Leaving it in TSP makes that very difficult.

Prior to retire I plan to transfer 100% to my IRA, but when I retired recently I transferred partial to my IRA. I can use the money in tsp to withdraw like evilanne since I'm under 50. My partial withdraw invest the way I want to and I'm willing to pay the 10% penalty as needed to access my money within couple of minutes (transfer between Etrade's accounts).

My spread ($2.50) or $2,500 for 10 contacts on FDX and instead of closing out to lock in profit for $900 (32.73%) within one day, but I used brokerage money $220k by letting them assigned to me 1,000 shares ($220 * 1,000 shares = $220K). Wow! I did not realize that $900 a day = $4,500 per week => $234K year. Next time I'll close it. Maybe I should start day trade.

I used 40% of my account balance to short OLED more than 110 contracts (11K shares) prices range from $139 to $158 started Monday of last week (9/18) and short the most when it was double top and start falling down (since it instinct value is under $120). On Friday (9/22) closing price at $132.70 with unrealized gained more than 8% of my entire account balance for just one day. One day gained is almost enough to cover for entire year that I plan to withdraw start next year. I will definitely reduce my holding on OLED and lock in some profit today. 70% chance this stock will trading lower between now and OCT 20 (expiration date) https://finviz.com/quote.ashx?t=OLED&ty=c&p=d&b=1

My TSP is in F funds (I want to max out so I started to follow daily strategy last couple days since I'm really bad on guessing the market closing price on SCI-F), but S funds looking good for long term, so I bought for under $1.5k for both to control 1,000 shares each on IWM with target 15% along with TNA (15%*3).

[mjedlin66]

Such dreams! Are you not aware Trump's budget proposal eliminates FERS COLAs? And if that health care plan passes elderly will be paying huge premiums. Every former TSPer needs to position their retirement money so they can get at it when needed. The TSP Program does not allow that. Do diligent research.

Dreaming is depending on social security and a pension.

What I propose is called planning. It doesn't take a 6 figure salary to own a house and replace your salary with TSP growth at retirement. As a nation, we have catastrophically failed to teach money management to our young.

[Buckeyedog]

I'm with Cron, although I'll likely leave maybe $60k or so in the TSP so I can draw on that until I'm 59.5, given that I go when I'm 56. I plan on rolling the rest over into my Schwab account.

[Longstreet]

Agree with Matt. It's a long way for me but I believe that if we plan carefully enough we can be prepared for just about any eventuality. This not only includes sound investing but also living within our means!

I understand Cron's point though and I think that in the end it just comes down to your individual comfort level and confidence in your plan. I think that if you can plan/prep well enough you should never have to worry about taking out bigger lump sum payments. However, if you are closer to retirement and haven't planned or prepped to a point that would make you feel comfortable in your investments or you just don't like the TSP as an investment vehicle given those restrictions I can totally understand where he is coming from.

[evilanne]

An outside Roth is a good option for an extra emergency fund as you can withdraw your contributions without penalty since you have already paid taxes on them (penalty only kick in if you withdraw the earnings prior to 59.5). They are not subject to RMDs and the tax benefit passes to your heirs tax free (including the earnings). It's only $5,500 ($6,500 over 50) per year but it adds up over time and you don't have any tax impact with a large withdrawals after reaching 59.5.

[Winner]

My spread ($2.50) or $2,500 for 10 contacts on FDX and instead of closing out to lock in profit for $900 (32.73%) within one day, but I used brokerage money $220k by letting them assigned to me 1,000 shares ($220 * 1,000 shares = $220K). Wow! I did not realize that $900 a day = $4,500 per week => $234K year. Next time I'll close it. Maybe I should start day trade.

I used 40% of my account balance to short OLED more than 110 contracts (11K shares) prices range from $139 to $158 started Monday of last week (9/18) and short the most when it was double top and start falling down (since it instinct value is under $120). On Friday (9/22) closing price at $132.70 with unrealized gained more than 8% of my entire account balance for just one day. One day gained is almost enough to cover for entire year that I plan to withdraw start next year. I will definitely reduce my holding on OLED and lock in some profit today. 70% chance this stock will trading lower between now and OCT 20 (expiration date) https://finviz.com/quote.ashx?t=OLED&ty=c&p=d&b=1

I gained $1K in FDX above, but never do it again since I don't have a lot of $ to hold on any single stock yet.

There is no way that I though I'll use $1.4M to short any individual stocks or EFT, but OPTIONS help me. I used less than $80K to control $1.4M by selling CALL spread then use the credit to buy PUT spread on OLED helping increase my entire IRA balance increase over 10% within 2 trading days. My current tsp need to increase more 18% to just equal to my two days gains in my IRA. Pay couple hundred in commission is worth it. Just lock in profit on 3K shares still have 8k open. Will close majority within this week if not all when they have little time (decay) value.