Time to roll TSP over...but where?

Managing your TSP and alternate investment options after retirement or separation from service.

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TopNotch
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Re: Time to roll TSP over...but where?

Post by TopNotch »

One other thing that to point out is that you don’t have to worry about cost basis in a traditional IRA or Roth IRA. Which means you could literally day trade your account if you wanted to. IMHO, the best profits to be made are in ETFs and stocks, not the C or S funds, if you know how to trade.

MakeMe$$$$ - earlier this year Vanguard had an option that let you put everything (mutual funds, ETFs, stocks, and money market) into one brokerage account. You could check this out. It worked out for me, but there was some warning information on their website that certain things could be affected.
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law87
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Re: Time to roll TSP over...but where?

Post by law87 »

can military do the roll over? or just government employees?

JDD4J4J
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Re: Time to roll TSP over...but where?

Post by JDD4J4J »

I would have to say the Prime Directive in Retirement is to conserve funds. The TSP rules prevent a beneficiary from being tempted to make unnecessary withdrawals that may reduce their savings. TSP alone will not sustain you, it is meant to be one of at least a three pronged plan of: pension, social security, and TSP. The time for risky investments is when you are young and are years away from retirement. When you retire it's about being conservative and secure with your funds. TSP is all about Conservation of assets over accessibility. "A penny saved is a penny earned." You are able to take a partial withdrawal and then lock into a 70 1/2 withdrawal program that will help sustain you. Rather than paying high fees to Fidelity or Vanguard for risky investments, it seems advantageous for most federal employees to keep it safe and secure on a withdrawal program.

crondanet5
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Re: Time to roll TSP over...but where?

Post by crondanet5 »

JDD4343 are you on the TSP Board of Directors? You certainly sing the company song. Look, your argument contains the very reason for getting out of the TSP Program when you can: you can't get your money out when you want. And it is very difficult to change the amount you do get out because they barely tell you when you can change your program and then there is a very limited timeframe to submit that change. Do you honestly believe we, TSP Participants, need to be protected from withdrawing funds from our TSP Account Balance? Will you really hobble yourself in retirement by following your advice to stay in the TSP? I believe someone before me suggested taking the log out of your eye so you could see reality. You should follow His advice in this matter.

JDD4J4J
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Re: Time to roll TSP over...but where?

Post by JDD4J4J »

"With great privilege comes great responsibility" It's true, with TSP you can not take out money whenever you want. It does require you to plan your withdrawals ahead of time. I believe most retirees try to be past the point of foolish jump in style actions and are willing to plan for their future. I do believe my TSP needs to be protected from hungry investment specialist and financial advisors. I have a multi pronged retirement plan, along with SS, FERS, and TSP, I have a private portfolio, whole life insurance, and other assets. TSP is for need not for want. If I 'want money when I want it' I have vehicles for that, TSP is not one of them. TSP is the rock of granite that will carry me to the end along with FERS and SS. If you want my TSP, like my union card, you can take it from my cold dead hands.

crondanet5
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Re: Time to roll TSP over...but where?

Post by crondanet5 »

Aha. Now I understand your position and applaud it. Your investment program would allow you to keep it in the TSP and conservatively increase its value for what it was intended: financial support past age 75 when medical costs rise. If I had not given reputation points just now to TSPsmart for his review of the F or G Fund you would have been rewarded. Hang in there, you can only give rep points every so often but you'll get them. I'm wondering if your TSP Account will end up being a multigenerational investment vehicle as you seem to have every financial advisor's dream investment program in play.
But what about so many TSP Participants who have not thought through their financial needs in retirement and only invest in TSP? And how about all the know-hows standing around the water cooler criticizing the TSPcenter Fantasy Player's attempt to achieve a secure financial retirement? Are they in a hardened position like Obama about Putin that they cannot get out of and thus declare loyalty to the TSP Program forever despite not understanding how difficult the program makes it to withdraw money when they will need it? That's the people I am trying to reach, to get them out of the TSP Program when they leave federal service. They need access. You, my friend and fellow union card holder, don't. Congratulations on having such a wonderful investment program.

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MakeMe$$$$
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Re: Time to roll TSP over...but where?

Post by MakeMe$$$$ »

TopNotch wrote:....

MakeMe$$$$ - earlier this year Vanguard had an option that let you put everything (mutual funds, ETFs, stocks, and money market) into one brokerage account. You could check this out. It worked out for me, but there was some warning information on their website that certain things could be affected.


THANKS! I called Vanguard yesterday and you are correct that there has been that change. I will need to consider them more seriously for why roll over because they have some very good performing, very low cost funds! I'm looking for my roll over to perform to be a bit more cautious than my private investments and have some more options to out perform TSP.

I like the way JDD4J4J conceptualizes that ultimate backstop for his TSP. I just think I can do a bit better outside of TSP.

The key for my wife and I is that we have some very good pensions (CSRS & State) where we don't have to be so concerned about IRA/401K performance. Sandee's health is paid in full and we can afford to double cover ourselves so even though the health insurance increases for us (Self + 1 next year saves us $.40 over family LOL) we have those costs well contained.

The only costs we can't control are diesel for the bus and unexpected service needs but we can control how much we drive and where we park it. Life is good!

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JDD4J4J
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Re: Time to roll TSP over...but where?

Post by JDD4J4J »

"Knowledge is power." Knowledge, that by the title, you might expect to find from a financial advisor. However this is rarely the case as this fairly unregulated individual generally advises what is in their best interest, not the clients. It's recommended to do your own research. Using TSP for it's intended purposes just makes sense. I'm not doing anything special, I just did my own research and diversified. That's what I would recommend to any TSP participant. Any set of rules can seem complicated till you get to know it. The choice of when and how to retire is always a person decision. I would advise to review the withdrawal/partial withdrawal information and see if it would work for them before considering draining their investment. I believe the private sector has spent a lot of money in marketing to convince TSP participants to give Wall Street their money, now that it's become so standard in the private sector with pensions being a thing of the past. As long as someone is a federal annuitant, I would attempt to avoid getting out of the TSP as long as possible. I have friends that are counterparts in the private sector. Doing very similar work, though being paid over 20% more. I see us as the Grasshopper and the Cricket. Federal Employment is all about delayed gratification. We accept a lesser pay for job security and stronger retirement.

crondanet5
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Re: Time to roll TSP over...but where?

Post by crondanet5 »

I think it was the grasshopper and the ant. The important point of that fable for this conversation is that the ant had food to eat all Winter, as you will have money to use your entire retirement.

Scarfinger
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Re: Time to roll TSP over...but where?

Post by Scarfinger »

You can't get your money out once you have started a 70 1/2 withdrawal program.


I love these conversations.

Can it be left to family in a will? Or do you still have to roll it over out of TSP to leave it to family?

May be a stupid question but I don't know. Still about 15 years before i think about retirement.
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jal540
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Re: Time to roll TSP over...but where?

Post by jal540 »

I`m not sure I would roll over TSP just because I can no longer contribute to it. What's the down side of having multiple investment accounts?

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TSPsmart
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Re: Time to roll TSP over...but where?

Post by TSPsmart »

I'll admit I have not studied the withdrawal issues of TSP in retirement so I'll focus on risk and returns with one exception...

...As long as you leave some money in TSP, you can return to it. You can also roll over your non-TSP retirement accounts into your TSP account! I think there are strong reasons for doing this from a risk and return point-of-view.

I know there are other opinions out there and I am open to new ideas, but presently these are my opinions on the subject.

If you are retired your overall allocation mix should be low risk unless you don't need the funds (your rich by other means). The TSP Lifecycle (Retired) funds allocate only 20% to equity funds and 74% to the G fund (6% to F fund). BTW, I don't see any reason to invest in the F fund these days. My opinion is you should be investing and not be speculating with your retirement funds, so your decision to roll over TSP should be heavily weighted toward low cost and low risk investing.

The Vanguard Lifecycle funds allocates 30% to stocks for the retired fund and a high percent (over 50%) to bonds that comes with not insignificant levels of risk. Only 17% can be considered near risk free in the Vanguard retired Lifecycle fund (if I remember correctly, TIPS). Any way you look at it non-TSP brokerages come with higher risk to include the risk of the brokerage company itself running into trouble. Since we are in a bond bubble with interest rates forced below market determined rates, the risk/reward ratio on bonds today is quite high. Even if you are managing your own investments, you are stuck with the same options as the Lifecycle funds.

The absolute best near-risk-free investment available anywhere is the TSP G fund. Period. And since you should be holding most of your "needed" retirement funds in a low risk fund, there is no comparison at Vanguard or Fidelity to the TSP G fund - none, not even close. I do like Vanguard, Fidelity and Schwab for non-TSP retirement accounts since they are low cost and well managed. But TSP accounts come with lower cost and a lower risk investment option - the G fund.

If you want to speculate or have funds available to withdraw, you could do a partial transfer. But when looking at your overall portfolio mix (TSP and other IRAs), you should retain your TSP account and overweight the TSP G fund if you are using the other brokerages for investing in stocks.

The TSP G fund provides you the higher interest rate return of longer term government bonds, without the capital gains/losses from interest rate changes. If interest rates rise on the longer term duration government bonds, the TSP G fund will simply pay more interest. The TSP F fund and the bonds Vanguard and other brokerages offer will incur capital losses if the shorter duration rates rise. Even money market funds come with risk these days.

Sorry I couldn't weigh into the withdrawal issues, but if you want more info on how TSP and Vanguard allocates based on the Lifecycle funds you can view my webpage designed to answer the question, How much of my account should be invested in stocks verses low risk funds? It takes a look at how professional retirement advisors allocate in the Lifecycle funds and of course more of my opinions.

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wwwtractor
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Re: Time to roll TSP over...but where?

Post by wwwtractor »

I got contributions out of TSP in January, 2015 and I like the no commission funds in Fidelity. These 70 commission-free iShares ETFs include a diverse selection of international, domestic, and specialized equity; fixed income; and commodities.
Last edited by wwwtractor on Thu Feb 04, 2016 11:08 pm, edited 2 times in total.
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wwwtractor
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Re: Time to roll TSP over...but where?

Post by wwwtractor »

It may be advantageous to roll 10% per year of Rollover IRA into Roth account between 60 to 70 years of age because of financial advantages after 70 years old of the Roth account.
Retired 2017:C=60%, S=20% and I=20%
Time is the only non-renewable resource.
Knowledge is the only sustainable competitive advantage.
https://share.robinhood.com/cliffow Buy free
https://r.mtf.io/FJvrJ Motif - Make ETFs
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E_dover
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Re: Time to roll TSP over...but where?

Post by E_dover »

I have a Vanguard acct in a lifecycle fund like the L2020. My TSP is in the L2020. My 12 month performance for the Vanguard is 2.6% and the TSP is -0.13%. But my TSP fees are low!

I'm seriously considering rolling over my TSP into the Vanguard fund. The withdraw options for TSP haven't come into play while I'm working but once I retire, if I need that money, I want to be able to get it.

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Fund Prices2021-04-16

FundPriceDayYTD
G $16.56 0.00% 0.34%
F $20.66 -0.21% -2.53%
C $62.57 0.36% 11.92%
S $83.28 -0.04% 12.24%
I $38.19 0.63% 7.92%
L2065 $13.71 0.39% 10.49%
L2060 $13.71 0.39% 10.49%
L2055 $13.71 0.39% 10.49%
L2050 $27.99 0.31% 8.45%
L2045 $12.79 0.29% 7.92%
L2040 $46.72 0.27% 7.42%
L2035 $12.36 0.25% 6.82%
L2030 $41.20 0.23% 6.25%
L2025 $11.71 0.18% 4.93%
Linc $22.82 0.08% 2.45%

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".

What else

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