Options after Retirement

General TSP Discussion.

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ritty59
Posts: 2
Joined: Sat Feb 28, 2015 9:59 am

Options after Retirement

Post by ritty59 »

After retirement, do you have the ability to rollover some of your TSP $ to an IRA and to keep some $ in the TSP to increase flexibility and take advantage of some of the benefits both offer?

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chief04010
Posts: 221
Joined: Mon Aug 25, 2008 11:10 am

Re: Options after Retirement

Post by chief04010 »

Yes.
"scientia potentia est"

crondanet5
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Re: Options after Retirement

Post by crondanet5 »

However, you should carefully review the restrictions TSP places on withdrawals before considering leaving any money in the TSP Program. I recommend you roll the whole TSP account into a rollover IRA. Get completely out of the TSP. It has no benefit to you. There is no Agency Match. Use ETFs that mirror the TSP Funds to grow your rollover IRA. Continue to play the Fantasy Game to learn how to better manage your account. When you set up your account be sure it has checking privileges so you can withdraw money as required. I understand with Fidelity your withdrawal is available the moment the "net out" has been transacted. And they have live people to talk to 24/7/365. Hope this was strong enough and you do it.

tomleeinar
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Joined: Fri Mar 07, 2014 10:11 am

Re: Options after Retirement

Post by tomleeinar »

Cron,
Why not leave some of it in the TSP since the fee is so low? I currently have my TSP and a traditional IRA. The Trad IRA has better returns but the fees are astronomical for the Franklin funds I'm holding. I plan on using the Trad IRA for spending money and a small annuity from the TSP to pay for bills.

John316
Posts: 149
Joined: Fri Nov 05, 2010 7:43 am

Re: Options after Retirement

Post by John316 »

Someone can correct me if I am wrong, but isn't there a 5 year rule on IRA's? If you retire at MRA and you roll over immediately you may have to wait until you are 61 before making any withdrawls.

ritty59
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Joined: Sat Feb 28, 2015 9:59 am

Re: Options after Retirement

Post by ritty59 »

The main reason I would like to leave funds in the TSP is I'm forced to retire at 56 and can withdraw funds from the TSP penalty free before age 59 1/2 without the complications of doing a 72t from my IRA.

crondanet5
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Re: Options after Retirement

Post by crondanet5 »

tom the restrictions on withdrawals from the TSP are awful. I believe the rules say once you make your election it can only be changed once a year and there is a very limited window in which you can make changes and those changes remain in place for the next year. Now about your IRA. Have you talked to the other brokerage houses about their fees compared to Franklin Templeton? I know Fidelity has a family of ETFs you can trade at no commission. Probably Merrill and the rest offer something similar. No one has to stay with a brokerage firm they are not happy with, including TSP when the Agency Match stops. If you can make money inside the TSP you can make money in a rollover IRA using ETFs that mirror the TSP Funds AND you can continue playing the Fantasy Game to hone your skills and learn from others. Why leave a portion of your money in such a cranky retirement program? It's like leaving a few cancer cells behind during surgery. Hope this influences you to roll all your TSP Account out of the TSP.

philmiec
Posts: 29
Joined: Thu Nov 20, 2008 5:36 pm

Re: Options after Retirement

Post by philmiec »

I plan on rolling a portion of my TSP into my Schwab traditional IRA but I'm keeping the lions share of my retirement money in the TSP as there is no better retirement plan offering lower management fees than the TSP. Management fees will eat you up in retirement if you're not careful.

crondanet5
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Joined: Tue Aug 19, 2008 8:51 pm

Re: Options after Retirement

Post by crondanet5 »

Getting someone to exit the TSP is like getting someone to join the TSP. So you save a few bucks using the TSP Program rather than a brokerage IRA. But you lose the ability to withdraw that money when you need it. Tell you what. Before anyone else expresses their undying loyalty to TSP after retiring would someone please call a TSP counselor and get the straight skinny from them, refraining from expression of undying devotion to TSP and instead focus on researching all the "what if I need money from TSP options?" . I bet you come away disappointed and do not leave your money in the TSP. Would someone please do this and post their results?

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maxbobcat
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Joined: Wed Sep 22, 2010 1:51 pm

Re: Options after Retirement

Post by maxbobcat »

crondanet5 wrote:Getting someone to exit the TSP is like getting someone to join the TSP. So you save a few bucks using the TSP Program rather than a brokerage IRA. But you lose the ability to withdraw that money when you need it. Tell you what. Before anyone else expresses their undying loyalty to TSP after retiring would someone please call a TSP counselor and get the straight skinny from them, refraining from expression of undying devotion to TSP and instead focus on researching all the "what if I need money from TSP options?" . I bet you come away disappointed and do not leave your money in the TSP. Would someone please do this and post their results?


Cron,

I am 28 and plan on working ~12 more years and doing a "Voluntary Separation" i.e. early retirement when I am around 40.

I want to let my money work hard for me, as well as use all of the tax advantages I can. One that I am planning on using is the roth ira conversion ladder.

Do you know if you can do a complete rollover of your Trad TSP into a traditional IRA and your Roth TSP into a Roth IRA? Once I get that done and all my TSP into my Vanguard IRAs, then I can start doing my ladder conversion into a roth ira.

Here's an except from a blog that details the plan:
"The IRS rules state that you are able to convert a Traditional IRA to a Roth IRA, as long as you pay ordinary income tax on the conversion. It’s possible though, due to a low amount of income during early retirement, that he won’t have to pay any tax at all on the conversion. If the conversions are tax free, that means he will have avoided paying any tax on the money (tax-free contributions to 401(k)/Traditional IRA, tax-free growth within the retirement accounts, tax-free conversion from 401(k)/Traditional IRA to a Roth IRA, and tax-free distributions from the Roth)!"

http://jlcollinsnh.com/2013/12/05/stock ... -fientist/
Last edited by maxbobcat on Mon Mar 02, 2015 12:22 pm, edited 2 times in total.

rikarus
Posts: 30
Joined: Wed Jul 06, 2011 11:40 am

Re: Options after Retirement

Post by rikarus »

I have 8 to go to retire at MRA and 38 years, I am moving every penny out of TSP and into something that is better suited to my financial needs and goals. I will forever be done with TSP or the GOV telling me how to make money with MY money.

crondanet5
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Re: Options after Retirement

Post by crondanet5 »

max you should talk to a TSP counselor about what you can do with your TSP Accounts. No rush, you have 12 years to go and 3 administrations to screw up your options. :D Be sure to max out your Agency Match while you can.

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chief04010
Posts: 221
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Re: Options after Retirement

Post by chief04010 »

Cron is right, the withdraw rules for TSP are strange if not stupid and ridiculous. Read the publication; Withdrawing Your TSP Account After Leaving Federal Service (3/2014) PDF, 646 KB. In less than 3 years I will retire and I will be rolling over my entire Traditional TSP balance to a Vanguard Traditional IRA and my Roth TSP balance to a Vanguard Roth IRA. I’m doing this because I want to be free of the TSP rules that make managing my money, and giving me the retirement lifestyle that I desire nearly impossible.
"scientia potentia est"

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ArrieS
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Re: Options after Retirement

Post by ArrieS »

Whatever you say about the TSP. It has one advantage I think people over look. The G fund is the only investment that is guaranteed to never lose value. No other fund, ETF, or whatever can claim that.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar

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maxbobcat
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Re: Options after Retirement

Post by maxbobcat »

ArrieS wrote:Whatever you say about the TSP. It has one advantage I think people over look. The G fund is the only investment that is guaranteed to never lose value. No other fund, ETF, or whatever can claim that.


Agreed. When I retire, I will leave a portion of my total portfolio in the TSP with the main reason being access to the G-Fund.

http://gubmints.com/2015/01/12/4-reason ... PS7xvnF8wA

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