Re: FERs Retirees, anyone?
Originally Posted by
Maricar19
...this rollover is contingent upon retirement and only upon reaching 59 1/2....
...I asked the dude about the money market account, he said it is not FDIC guaranteed.
Ahhh.....BUT....there’s a way around that, too !
Assuming you have NOT made any partial withdrawals or age-based in-service withdrawals, you can do this :
1. Estimate how much money you need from TSP, from your retirement until age 59.5.
2. Leave that amount in TSP ; Do a one-time partial withdrawal of the rest of your balance, and roll that into the IRA (for all the reasons mentioned above !)
3. Immediately file for a full withdrawal of your TSP balance, using the “series of monthly payments - specific dollar amount” option. Set the dollar amount based on the $ number you came up with in #1 and the time until you reach age 59.5.
This approach allows you that penalty-free income stream from TSP, while giving you the advantages of the IRA now ! You can adjust the TSP monthly amount up or down, as noted, but only once per year...I think they send you the form in November or so, to take effect in January....kinda like “Open Season”
Depending on how your TSP investing goes, and/or your adjustment to the monthly amount, you may end up getting a few more months than you estimated.
This is exactly the approach I used, and it’s worked out perfectly for me and the Wife. I retired at age 57, left 2.5 year’s worth in TSP, and have been withdrawing a specific dollar amount. That draws my TSP account down to zero in July, but I’m now 60, so anything we decide we need from the IRA will avoid any withdrawal penalty.
Consider it carefully, though...what worked for us may not be right for anyone else, and it’s awfully hard to “un do” !
RE: FDIC insured...I'd double check that info. In my USAA IRA, the "sweep" account (i.e. cash) is in a FDIC-insured money market account. Perhaps that is because USAA runs a regular bank, too...not sure if Vanguard does that or not ???
HTH !!!
Stoplight...
"Too old to rock and roll...too young to die"... - I. Anderson
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