Post TSP Retirement Options

[TSPKip]

CR: I love it when tu parle francais.

[crondanet5]

LOL

[dcramer29]

Hugehail - there really isn't much of a reason...other than keeping some cash flowing into it. My financial advisor liked having fund in both the Roth and traditional tsp...to give you options when retirement comes around.

[MBehr]

A timely question for me as I am pulling the pin at the end of the month (mandatory). My plan is to leave 10 yrs of monthly payments in the TSP and roll the rest into an IRA at USAA's brokerage. This will avoid the 10% withdrawal penalty as I am only 57.

If cashflow becomes a problem and I need more than the TSP monthly payments, then I can always set up 72T payments from the IRA for the mandatory 5 yrs or 59 1/2 (whichever comes first per IRS rules).

My original plan of leaving it all in the TSP and just taking monthly payments has gone by the wayside. I can't stand the twice monthly transfer restriction the TSP imposes on us plus the lack of choices in what to invest in.

[jeffvan2]

I took the one time partial distribution after retirement and then did an IRA rollover at a later date. The only mistake I made was in doing the IRA rollover, I wanted to preserve equity so I placed the majority of the funds in a money mkt fund which has yielded 0% interest for the past two years. For all the good its doing me, it might as well be parked under my mattress.

I wanted an income producing investment so I did not invest the partial distribution in any financial vehicle, but rather, purchased 4 condominium units on short sales. All four units are rented out and after paying property insurance, taxes and maintenance fees, my annual profit is equal to my annual annuity.

After the initial shock of paying $38,000.00 in income tax on the partial withdrawal, I think in the long run, it was a sound investment decision. I no longer have to worry about market direction, risk exposure, or loss of principle.

Its something that everyone should consider at retirement. Investing in a business venture rather than trying to second guess on financial investments.

AND YES, to all you "Old Timers". I used to be jeffvan1 on this site. Shout out to McLovin and Crond.

[Winner]

I just turned 28. This year I invested about 19% into the traditional TSP. Now the Roth TSP is available I want to contribute to that too (but we're still capped at $17k by the IRS) so I'm putting 80% of my contributions into the traditional TSP and 20% contributions into Roth TSP.

Some people have said it would behoove me to invest more into the Roth TSP first, and then the traditional second. So in January 2013, I may switch to 70% contributions Roth TSP, 30% traditional TSP until I hit the $17k limit for the 2013.

Thoughts?

In terms of investment accounts, I have the traditional TSP (to which I rolled over from my old private sector employer-eligible retirement accts), just started the Roth TSP, and I have the old John Hancock brokerage account (think it's a Roth IRA) which I'm thinking of switching to UBS Wealth Management, Vanguard, or possible Morgan Stanley.

For me personally, I start out with using the TSP calculators available on this site to estimate tsp balance. 2nd try this calculation as well to see if you saving enough income$ http://www.opm.gov/retire/tools/calcula ... /bp_p1.asp.
The estimate show I use for tsp return is 12% with 5% contribution, my balance will be couple $Mil. The two calculators show I will receive at least 130% of my current income, since I was able to pull in nearly 20%/yr on my tsp and based on that my balance will be more than my estimate; therefore, I contribute only 5% to Roth TSP to get the matching and avoid pay extra taxes in the future.

For account outside TSP then you may want to consider with option trading to maximite your return for the balance under six figures. Read ALL the prior post by skiehawk11 as he listed detailed and explained about option (I post some but I know it will be confusing for someone just start). So far I was able to increase 20% of my entire balance monthly on both my ROTH IRA and regular accounts and skie should pulled in more than me on his ROTH IRA.

Skie,

Since you have extra income in your ROTH IRA, instead of buy bonds, ETF, or stocks and hold for couple of months or long term. Why not just sell naked put weekly or monthly, if you are correct and the price going up you keep all the money you collect for selling put, if it go down then you own the shares as you plan to own at the first place for less than the current market price. By doing this there is potential to increase entire balance up to 50% monthly. Since you want to own ABC at $50, then why not sell the strike price at $50 or $49 to maximize your capital.

Example: NFLX put $65 strike was assigned to me on 10/21 as the price close less than $.05 below $65 strike and the commission will cost me more than the exercise the option for the cost at $64.82 after the commission and I sold the next morning on Monday 10/22 for $69 (today close at $83 that is 28% increase in one month from the assigned price). I'm taking risk by buy 80/sell 85 put spread for $3 credit since yesterday and let see if it close above $85 on Friday for me to collect 150% based on the margin. If it close at the current price on Friday I have two option either buy back $85 strike to close the trade for 50% profit or let it assigned since my cost will be $82 + commission that almost $1 below the market price.

[skiehawk11]

Winner, it's a good theory, but there are underlying factors. Selling naked puts requires money upfront. For instance, I'd want to sell puts on stocks I'd want to own which are generally dividend aristocrats (T, KO, etc).

As an example, say I place a put order 2 strikes OTM on December. If my account has around 10,000 dollars in liquid cash, I can sell 2 KO options and collect 4 cents per share which totals 8 dollars in my pocket. That cash is held up until I decided to buy to close or if the trade loses. If my cost of buying options is 5 dollars then my profit is a measly 3 dollars and that doesn't include taxes. I think with a larger account, this could have some merit, but overall, there are better, less stressful ways to earn 8 dollars a month on 10,000 a month. Which fyi, 8 dollars of 10,000 is .08% return.

[Winner]

Skie, how about this

T buy the stock for $34 and sell 2015 $30 puts and calls for $8.50 for a net entry of $25.50. If the stock is called away at $30 in Jan 2015, you make $4.50 and also collect (assuming it doesn't change) $3.60 in dividends for a total profit of $8.10 against your $25.50 entry. That's a pretty nice 31.7% return over 2 years and our worst case is you are forced to buy another round of T at $30 (from the puts) if the stock is below there and then you have 2x the amount of T shares at net $27.75 but you still collect our $3.60 in dividends so net/net $26.15 per share, which is 23% below the current price.

So this INVESTMENT either make 31.7% over two years (and all T has to do is hold $30 to collect in full so it's got a built-in 11.7% hedge) or buy 2x worth of T over two years at a 23% discount and THEN you could roll into a similar spread to further reduce the costs. This is very good for over time especially for those of you about to retire or already retire since it built 11.7% instead of stay with tsp with a lot of risk and hope that you will get 12% return annually.

By the way, my last IFT was very bad move as I emailed my friends on Thursday (11/29) that my IFT on 11/30 is high risk for this entry (since most of them were in either 11/19 some were in on 11/16 and they were out on 11/21 or 11/23) since the market rally based on emotional, but ISM report this morning with 49.5% is the worst for this year which brought us to officially in recession and I should be out, but I'm too busy so I'm stuck for now. Since ISM report killed the rally, the next hope comes from employment jobs report on pre-market Friday for the group that still in stock market believe in Santa will help rally.

[Winner]

T $34.50 tough resistance. it would require some unknown bad news from here to take it below $30.00.

From last year best date return is today to get into S and get out on 12/28.

I bet the fiscal will be result, otherwise the market knock it down than the current trading range already.

[crondanet5]

jeffvan1/2 have you investigated dividend paying stocks for your rollover IRA?

[skiehawk11]

Winner, I like this a lot. However, the only draw back is to have enough capital to set up trades in which you sell puts. You'll need around 3,500 dollars in liquid reserves to keep this trade open until 2015 off of one one contract set up. These strategies are good, but are capital intensive.