To Roll or Not to Roll

[GGal]

Who thinks, and why:

1. Better to leave balance in TSP, and elect monthly WD, and continue to manage the account among the funds according to your taste for risk.

2. Better to roll to a self-directed IRA, and select high dividend paying stocks, along with some safe funds.

Thanks
GA

[atcsat64]

I don't think #1 is a possibility; I thought monthly WD would be the same as buying an annuity which takes away the ability to actively manage your account. I plan on #2 or similar for that reason but obviously will look into it (still have five+ years).

[Elgallo]

One may annuitize a portion of the tsp and elect to manage the rest. Same holds true if one elects a string of level payments for 5 years, or monthly, bi annual or annual lump sums.

Of course none of this applies if one annuitizes the entire balance or draws out the entire amount in a lump sum.

[Spaf]

IMHO
Looked at several options including a roll over. However decided to stay with TSP and have an annual % / monthly withdrawl.
Reasons:
1. Can always go to CP in the G-Fund.
2. Don't have to deal with fund managers, etc
3. Good index funds.
4. Low expense ratio.
5. Option of the L-Income fund.

However, it depends on your sucess with managing your portfolio.

Check with Rokid or one of our math members. If U have your nestegg properly set up with a withdraw of 4% or less annually..... AND have the safe haven of capital preservation (CP) in the G-Fund.....AND participating in equities when there is a definite Bull trend..... what is your risk vs reward ratio?

Otherwise you let someone else handle your retirement. Who is this someone else.....:suspicious:

Just my 2 cents!

[ssafed]

Who thinks, and why:

1. Better to leave balance in TSP, and elect monthly WD, and continue to manage the account among the funds according to your taste for risk.

2. Better to roll to a self-directed IRA, and select high dividend paying stocks, along with some safe funds.

Thanks
GA
GA, I decided to leave it all in TSP and continue to manage it - for the very reasons SPAF cites. Since we don't HAVE to take any withdrawal until 70 1/2, there's several more years to grow the TSP if you don't have to have the additional income. Also, I liked that you could change your mind at any time (a girl's perogative!!!) if you wanted to roll it, take it out, all or a piece at a time at any time now. I retired last July and I'm still happy with my decisions - both to retire & let TSP ride! Good luck!:)

[GGal]

GA, I decided to leave it all in TSP and continue to manage it - for the very reasons SPAF cites. Since we don't HAVE to take any withdrawal until 70 1/2, there's several more years to grow the TSP if you don't have to have the additional income. Also, I liked that you could change your mind at any time (a girl's perogative!!!) if you wanted to roll it, take it out, all or a piece at a time at any time now. I retired last July and I'm still happy with my decisions - both to retire & let TSP ride! Good luck!:)

Thanks for responding! I take it your agency fully informed you as to your choices. Because the TSP site is just not that clear. It makes it sound like once you make a decision you are stuck with it, except changing the amount of monthly payment each January if you want to.

So, are you saying that if you make the choice to leave it in, you can withdraw whatever you want at any time?

For example, let's say you want $5,000 for a vacation - can you get it? At any time?

That's an important distinction that I need to know.

Then there are other considerations - can I make as much in the TSP as I could in a self-directed IRA? Probably! Even with our limited choices.

Another thing about leaving it in - still no fees for moving money around, right?

Thanks
GA

[Spaf]

GG,
Go to the TSP.gov site and download TSP-70. It's a form that also explains all your options.
Changes are made the 1st half of December.
You can withdraw, transfer, change at that time. Not any time.
TSP vs IRA thats a matter of choise.
No fees.
I wouldn't touch my TSP for a vacation. I'd use my tax paid funds for something like that. TSP is strictly retirement (for me).


......... except changing the amount of monthly payment each January if you want to.
So, are you saying that if you make the choice to leave it in, you can withdraw whatever you want at any time?
For example, let's say you want $5,000 for a vacation - can you get it? At any time?
That's an important distinction that I need to know.
Then there are other considerations - can I make as much in the TSP as I could in a self-directed IRA? Probably! Even with our limited choices.
Another thing about leaving it in - still no fees for moving money around, right?

Thanks
GA

[GGal]

Okay, now ya'll have really confused me.

I went to TSP-70, which is for a full withdrawal.

I went to TSP-77, which is for a partial withdrawal. But it says you can only make that one time.

So it seems that if you choose to leave your entire balance in TSP when you retire, that you can only make a one time partial withdrawal, and then the next withdrawal must be in full.

Ya'll have lost me with your explanations.

GA

[GGal]

I read the booklet at TSP.gov

I think I get it now. Tell me if I'm wrong.

I can leave my entire balance in there when I retire if I want to.

Then, if I want to at a later date, I can choose to take it all at once. Or I can choose to take a one time single partial payment over $1,000 - but that is only allowed once. Or I can choose to begin taking monthly payments, either based on life expectancy or a specific dollar amount. Each December then I can change that dollar amount if I need to. Or I can later take the whole thing out (but not if I've already chosen monthly payments????) Once I've chosen monthly payments I'm stuck with that.

So, I cannot just will nilly take $5,000 here, and $10,000 there on a whim.

Have I got it right now?

So Spaf, which of those are you going to do? Monthly payments?

Thanks
GA

[EW_ret]

I retired September 30, 2005. Last year I decided to do IRA Rollover to Vanguard with some of the money in my TSP account. I left some money in my TSP account. When you leave the federal service, you are allowed a "one time" partial withdrawal as long as you have not taken an age-based, in-service withdrawal while employed. I choose to move some TSP money to Vanguard to get free financial plans and move up to the Voyager class. I believe it easier to manage retirement assets when almost all is in one place.

If I decide to transfer the IRA Rollover money back to TSP I could before I turn age 70 ½ and start mandatory withdrawal. One is allowed to transfer a traditional IRA or another pension plan into your TSP account. But, I cannot do another partial withdrawal from my TSP account. I can elect a monthly payment, withdraw all in single payment, or elect annuity on my remaining balance at any time. I can change the monthly withdrawal amount once a year, effective on January 1st of the following year.

[EW_ret]

You are allowed to change from a monthly payment schedule to a single final payment. You cannot change back to monthly payments because the single payment is the final payment.

Or I can later take the whole thing out (but not if I've already chosen monthly payments????) Once I've chosen monthly payments I'm stuck with that.

So, I cannot just will nilly take $5,000 here, and $10,000 there on a whim.

Have I got it right now?

So Spaf, which of those are you going to do? Monthly payments?

Thanks
GA

[Spaf]

GG,

I think they write the way they do to confuse folks. Might want to give them a call and talk to them, just to be sure.
I elected a less than 4% annual withdrawl with monthly payments.
I normally get it via direct deposit around the 26th of each month.

Basically, when U retire you are going to have a pay gap of 1 month till everything gets reset. So save your leave for a payback. Then refigure when all the pay comes in, cause it's all gonna be different.

Spaf

[tspgo_com]

GG,

Please go to www.tspgo.com and click the link "Retirement Plan" on the left menu. These are two articles by Tammy Flanagan. I think she explains the subject of Withdrawal Options very well.

Hope it helps.

TSPGO!

[GGal]

GG,

Please go to www.tspgo.com and click the link "Retirement Plan" on the left menu. These are two articles by Tammy Flanagan. I think she explains the subject of Withdrawal Options very well.

Hope it helps.

TSPGO!

That was great - thank you so much. A big help!

The big advantage then of rolling to an IRA (other than more diversification opportunity) is that you can withdraw money from an IRA, willy nilly, as you need it, while if you leave it in TSP, you are limited to monthly withdrawals, a one time partial withdrawal, then a final full withdrawal.

Hmmm. I better go with the IRA. Because of things like emergencies that may come up where I need a chunk, or I might want to give a chunk to a child for some purpose (like a down payment on a home).

The down size of that is I will have to pay Edward Jones or whoever those big commissions when I buy or sell stock in the IRA. And I might make stupid investment decisions.

GA

[tspgo_com]

That was great - thank you so much. A big help!

The big advantage then of rolling to an IRA (other than more diversification opportunity) is that you can withdraw money from an IRA, willy nilly, as you need it, while if you leave it in TSP, you are limited to monthly withdrawals, a one time partial withdrawal, then a final full withdrawal.

Hmmm. I better go with the IRA. Because of things like emergencies that may come up where I need a chunk, or I might want to give a chunk to a child for some purpose (like a down payment on a home).

The down size of that is I will have to pay Edward Jones or whoever those big commissions when I buy or sell stock in the IRA. And I might make stupid investment decisions.

GA

The other option would be to get a partial cash payment and roll it over to an IRA and receive monthly payments from what is left in your TSP. eg. Rollover 25% to an IRA and receive monthly payments from the 75% left in TSP. If you expect 12% earnings in your TSP, then a 1% monthly payment (12% yearly) from your TSP would keep your capital intact. I am using the 12% figure because it seems to be obtainable even using some of the most conservatives strategies you find here.

Good luck

TSPGO!

[rondalw]

For me personally, I have decided to roll over into IRA. I am a LEO 50 y/o with 32 years service. My choices to withdrawl from TSP (if I so desire) are very limited. I feel comfortable with my financial person as I have dealt with him for years and he is very responsive and yes I pay fees but, I am comfortable with it.

The key is being comfortable with decisions and doing what is right for your own particular situation.

[nnuut]

The other option would be to get a partial cash payment and roll it over to an IRA and receive monthly payments from what is left in your TSP. eg. Rollover 25% to an IRA and receive monthly payments from the 75% left in TSP. If you expect 12% earnings in your TSP, then a 1% monthly payment (12% yearly) from your TSP would keep your capital intact. I am using the 12% figure because it seems to be obtainable even using some of the most conservatives strategies you find here.

Good luck

TSPGO!
Dont forget about inflation!! Count on at least 4% a year the way things are going now. That would leave you 8%.
Norman:D

[Spaf]

GG,

You are on FundSurfers top 10 for the last 12 months. With your market savy why go to a IRA?

Seems to me you are better at it, than going back to B&H......?......http://www.websmileys.com/sm/sad/533.gif

Spaf
:)

[GGal]

GG,

You are on FundSurfers top 10 for the last 12 months. With your market savy why go to a IRA?

Seems to me you are better at it, than going back to B&H......?......http://www.websmileys.com/sm/sad/533.gif

Spaf
:)

Hello Spaf,

Once we retire, aren't we supposed to be more in CP mode? Little risk? So I was thinking, self-directed IRA, spread among some safe MM funds, some proven investment funds, and some high dividend yield stocks.

Maybe I'll do as suggested, and leave some in TSP.

I have an inherited progressive eye disease.....in a few years I will be legally blind. It might be hard to keep up.
I might not even get to work to retirement age. In fact, it is doubtful.

GA

[Spaf]

GG
CP mode!....Only when the Bears are out!
Leave some in TSP!.....You gotta stay around!
I have small pieces of plexi-glass in my left eye, causes iritis, it's a bummer!
S

Hello Spaf,

Once we retire, aren't we supposed to be more in CP mode? Little risk? So I was thinking, self-directed IRA, spread among some safe MM funds, some proven investment funds, and some high dividend yield stocks.

Maybe I'll do as suggested, and leave some in TSP.

I have an inherited progressive eye disease.....in a few years I will be legally blind. It might be hard to keep up.
I might not even get to work to retirement age. In fact, it is doubtful.

GA

[ssafed]

Thanks for responding! I take it your agency fully informed you as to your choices. Because the TSP site is just not that clear. It makes it sound like once you make a decision you are stuck with it, except changing the amount of monthly payment each January if you want to.

So, are you saying that if you make the choice to leave it in, you can withdraw whatever you want at any time?

For example, let's say you want $5,000 for a vacation - can you get it? At any time?

That's an important distinction that I need to know.

Then there are other considerations - can I make as much in the TSP as I could in a self-directed IRA? Probably! Even with our limited choices.

Another thing about leaving it in - still no fees for moving money around, right?

Thanks
GA

Ga, I'm glad you got info you needed before I got back - I didn't really get a lot from my agency but did a lot of digging to try to learn as much as possible because I thought, like many others apparently, you had to close your TSP when you retired. I had a lot on my plate at that time, & it was a great relief to know I could let it ride (& grow) & make critical decisions about how best to handle the TSP funds later. Each member's situation is different as the responses you got so clearly show but all the views offered help all of us, in our different ways! Thanks to everyone who contributes!

I'm wondering if anyone has more details on the newly added brochure on tsp.gov website about transfers from tsp to Roth IRA's after 12/31/07. The way I'm reading the fine print in footnote 3 is that beginning 1/1/08, you will be able to transfer TSP into a Roth IRA (Pension Protection Act, 2006).

[georgep]

Dont forget about inflation!! Count on at least 4% a year the way things are going now. That would leave you 8%.
Norman:D
A 12% p.a. return seems very optimistic given avg annl returns published at the TSP "Returns" page(s).

[georgep]

Ga, I'm glad you got info you needed before I got back - I didn't really get a lot from my agency but did a lot of digging to try to learn as much as possible because I thought, like many others apparently, you had to close your TSP when you retired. I had a lot on my plate at that time, & it was a great relief to know I could let it ride (& grow) & make critical decisions about how best to handle the TSP funds later. Each member's situation is different as the responses you got so clearly show but all the views offered help all of us, in our different ways! Thanks to everyone who contributes!

I'm wondering if anyone has more details on the newly added brochure on tsp.gov website about transfers from tsp to Roth IRA's after 12/31/07. The way I'm reading the fine print in footnote 3 is that beginning 1/1/08, you will be able to transfer TSP into a Roth IRA (Pension Protection Act, 2006).
Be carefull! I don't know the conversion details (tax wise) but it seems to me everything Rolled to Roth (R-R) would be immediately taxable. So why would anyone want to do this?

[SkyPilot]

A 12% p.a. return seems very optimistic given avg annl returns published at the TSP "Returns" page(s).

That's why one needs to actively manage their account...

[Aviator_Guy]

I plan to use my TSP to supplement to my retirement income. I plan to have fixed monthly payments withdrawn from TSP. This will allow my retirement monthly income to match or exceed my fed monthly income after retirement. But at the same time, my TSP account balance will grow since the amount withdrawn doesn’t exceed my avgerage TSP account interest earned. A conservative figure would be 5 to 8 percent.

The TSP also allows you to adjust the monthly amount annually, so if your account balance is growing a lot faster in retirement than the amount withdrawn, you can adjust it up or down as needed. I have been maxed out in contributions to the TSP since it started. This makes retirement an easy option when I become eligible in 2013. Good luck with your TSP investing plan!:cool:

Who thinks, and why:

1. Better to leave balance in TSP, and elect monthly WD, and continue to manage the account among the funds according to your taste for risk.

2. Better to roll to a self-directed IRA, and select high dividend paying stocks, along with some safe funds.

Thanks
GA

[GGal]

After listening to everyone and doing the little bit of reading, I am tempted to do a split scenario.

Leave enough in the tsp to generate enough earnings to get the amount of monthly payment I want, then put the rest in a self-directed IRA, some of which would be in safe funds and some in high dividend yield stock, and readily available in case of any emergency.

Thanks
GA

[Ed]

Who thinks, and why:

1. Better to leave balance in TSP, and elect monthly WD, and continue to manage the account among the funds according to your taste for risk.

2. Better to roll to a self-directed IRA, and select high dividend paying stocks, along with some safe funds.

Thanks
GA
That's a tough question. I'm eligible to retire in 15 months and leaning to keep funds in TSP, at least for a while, because:

1) Low administrative expenses, and
2) Security (perceived)
3) Less choices will reduce (my) temptation to trade more with other investment vehicles which may be more risky (e.g., stocks, actively managed mutual funds, etc.)

Ed

[Elgallo]

The limitation of only being able to readjust your monthly/yearly amount once a year is going to have to be revised. We should be able to adjust the amount anytime we feel it NECESSARY!

This is just more unnessary govt. regulation and control, and is similar in nature to having to wait 6 months, after you pay off a TSP loan, before you can get another loan....WHY!!!

It is our freaking money BTW!!! Who are they to limit OUR access to OUR money, inparticular after we retire.

Two more years and they can't go by fast enough for me!

[Removed1]

anybody knows the age required for moving TSP money out to IRA account? ..and so many abbreviations JMHO,FIWI. in MB,then CRB what do they stand for?...CRB is used to monitor what aspect of the market? Thank you

[Birchtree]

CRB = Commodity Research Bureau. Monitor it for raw material costs to gauge inflation and price pass throughs. A reason to buy materials stocks.

[Spaf]

A_G,

I've been operating under that plan for over a year, it works great!

If you perfer to manage your account thats the way to go!
If you want your account on autopilot there are the L-funds.
I just have an objection to the high expense ratios by other firms and or the non ability to move funds to a better position.

Spaf


I plan to use my TSP to supplement to my retirement income. I plan to have fixed monthly payments withdrawn from TSP. This will allow my retirement monthly income to match or exceed my fed monthly income after retirement. But at the same time, my TSP account balance will grow since the amount withdrawn doesn’t exceed my avgerage TSP account interest earned. A conservative figure would be 5 to 8 percent.

The TSP also allows you to adjust the monthly amount annually, so if your account balance is growing a lot faster in retirement than the amount withdrawn, you can adjust it up or down as needed. I have been maxed out in contributions to the TSP since it started. This makes retirement an easy option when I become eligible in 2013. Good luck with your TSP investing plan!:cool:

[Removed1]

CRB = Commodity Research Bureau. Monitor it for raw material costs to gauge inflation and price pass throughs. A reason to buy materials stocks.
Thanks Birch for responding.
DN

[ekatteng]

I will roll into an IRA account traditional and will trade the EFA which follow the I-Fund ;)

[offtrack]

Useful article on converting to Roth


http://tax.cchgroup.com/images/fot/JORP_10-03-07_Keebler-Bigge.pdf

[Frixxxx]

Useful article on converting to Roth


http://tax.cchgroup.com/images/fot/JORP_10-03-07_Keebler-Bigge.pdf

You are now on my favorites list. Great Article!:cool:

[GGal]

http://finance.yahoo.com/focus-retirement/article/103905/Six-Critical-Retirement-Missteps?mod=retirement-preparation

[RPM]

http://finance.yahoo.com/focus-retirement/article/103905/Six-Critical-Retirement-Missteps?mod=retirement-preparation

Good article! I am learning new things everyday. Never heard of 72t before, and now both ChemEng and your article mentioned it. Cool!:cool:

[Pennguino]

Hello Spaf,

Once we retire, aren't we supposed to be more in CP mode? Little risk? So I was thinking, self-directed IRA, spread among some safe MM funds, some proven investment funds, and some high dividend yield stocks.

Maybe I'll do as suggested, and leave some in TSP.

I have an inherited progressive eye disease.....in a few years I will be legally blind. It might be hard to keep up.
I might not even get to work to retirement age. In fact, it is doubtful.

GA


I am still new to management of money. I am 40 with 20 YOS. Have another 16.5 for my MRA. I like the diversity you speak of here. I am thinking of rolling 25% into what you speak of for quick money when/if needed and leave the rest in the TSP under active management. Taking an addditional 5% as my retirement gift to myself. That leaves me 70% left in the TSP. (To actively day trade in the I fund muhahahahahaha!!! :laugh:)

I am thinking of following the rate of return from the previous 3 years as my yearly deduction. Lets say I retire at age 55. I would then elect to take my withdraw based on my return for when I was age 52. The next year I would adjust to use my returns for age 53 and so on... This way I know what my yearly allowances will be and I can forecast what I need the next year. Is it a boom or bust year? I can also see what the current year provided me. I might just take a running average of the previous three years and adjust each year.

This way I am only taking what I earned minus inflation.

Income chances:
TSP
Supp Social Security
FERS
Nation Guard (Age 60 hoping for age 55)
Social Security
Roth IRA (Hopefully this year start)


Just have to find a way to maximize it all.

[airlift]

To all of you good people, one of our members, suggested that I should post for your consideration and advise, a request that i posted in other threads. Thank you in advance for your ideas and suggestions

COPY:

"James,
I am copying the same request in your thread due to pressing circumstances. Thank you.

Re: Show-me Account Talk

Show,
Please excuse my invasion of your thread for a request that I have to make to all my friends in the message boards at TSPtalk. I am making this appeal here because you are highly respected and your thread is widely read.

Some good friends with whom I have corresponded with through the years have tried to help me, but they have their own problems and their own limitations. I always have been a very discreet and very private person, but the circumstances that are weighing on me have dictated that I open up a bit of my personal life in order to seek wider advise from other colleagues here at TSPtalk.com.

I would have thought that certain events should be treated with flexibility, and that a supervisor at TSP.gov should be able to use some discretion in order to deal with exceptional problems with a sense of fairness and understanding. We shall see!

My problem below is self-explanatory. I need your good minds to help. Thank you in advance all!

To all members at TSPtalk:

Please treat this as a true personal emergency. I am asking for your help urgently. Since you have helped me in the past, I trust that you might help me find a solution to this problem.

In January 2008, I had to face some debts and other personal financial obligations. At that time I was in confusion, and it was all quite hectic. Due to the fact that my maximum loan amount was capped at around 40,000, and I needed in excess of $100,000, in the stressful confusion, I decided to do what I believed was the correct thing to do. I took $125,000 dollars, knowing that they would retain 20% witholding for tax purposes. I received the $100,000 dollars and was able to meet all of my existing obligations. My wife and I were able to breathe normally after I cleared the debts.

It was never my intention to preclude myself from using the provisions of an aged-based roll-over IRA after age 59 1/2. I sincerely believed (and still believed until today) when I called the TSP toll-free number at (877) 968-3778 that the witholding penalty withdrawal was different and separate action which was governed by different regulatory provisions. In my predicament and stress in January, it never occurred to me that TSP thrift would prevent me from doing a roll-over IRA. Today, a representative by the name of Kimberly told me that the application that I filed for a roll-over IRA on March 19, 2008, is being denied for the reasons I just explained above.

In my good faith I opened an account at the Orlando, Florida branch. It was from that office that the manager faxed the application with their help and with the required information. I have been very excited and looking for the transfer and to manage my IRA.

This morning (yesterday) I asked Ms. Kimberly at TSP to let me talk to a supervisor, but she left me waiting a long time until she finaly told me that a supervisor would call me in up to 48 hours. Please help me reach someone that may be understanding of my true intention under stress. Your suggestions are highly valued!

[Warrenlm]

airlift, I hope someone has been of help to you in your matter above since April. I know I don't know anything to be of help.

In keeping with the thread title I thought I'd ask if the recent Congressional initiatives are driving members who planned to keep their TSP accounts in retirement, vice rollover to an IRA, to reconsider that.

The fedsmith column this month discussed a resumption of the 2007 initiative about avoiding companies not meeting some moral test but also added a new twist---changing the way the TSP is managed to include minority financial advisors on some portion of it.

[jon]

What would you do regarding keeping a small TSP account 40k, if you had retired at age 63 and will turn 65 in 10/08? The limited IFT's and other aspects of how trades are executed makes me feel its foolish to keep $ in TSP. I opened an IRA and Roth IRA with Scottrade in Feb 08 with minimum balances, but with no earnings income now, I'm not sure if that affects rolling over all of, or installments of TSP account into one or both IRA accounts. I am divorced and living month to month from my OPM retirement and SS and have no debt. I know there will be tax consequences of withdrawals from IRA's but that seems better than funds so restriced in TSP. Thanks for your comments and suggestions. (No matter what, you can't get rid of me even if I close my TSP. TSPtalk has great people and info.)