Hi All!!

**jeepjeep92** · 05-18-2006, 11:21 PM

I've been lurking for about a month now and thought it was time to finally jump in and say Hi. So, uhm, "Hi!" Great site; I'm learning a lot!

I spent five years in the active duty Army, started contributing to TSP in May, 03 while in Afghanistan--yay, tax free $$$. Loved that so much, I spent some time gaining more tax free $$$ in Iraq!! Then, it seemed like my TSP was doing so well (5% G; 10% F; 20% C; 25% S; 40% I) that it just made sense to focus my job search in the federal sector so I could keep going AND get the gov't matching!!

I started my federal job in August, 05 and have that set up as follows: 5% G; 10% F; 2% C; 33% S; 50% I. Here's a first question (and please let me know if I should be posting this in a different topic), should I "roll over" my military TSP money into my federal TSP money? Would it make much of a difference?

I sort of like having the military TSP separate. I'm not contributing, so all I see is growth (and so far, thankfully, no loss). I was told that I wouldn't be able to roll over the money I contributed while in the tax-free combat zone anyways.... Thoughts?

Thanks in advance!! Looking forward to learning more!!!

Angela

**tsptalk** · 05-19-2006, 06:19 AM

Welcome Angela! Thanks for joining us. I'll let the military folks here take your question.

Good luck!
Tom

**mlk_man** · 05-19-2006, 12:42 PM

Hi Angela, welcome to the board!

Does the TSP actually give you two seperate accounts? This seems a little odd to me. I just assumed that your TSP account would remain the same even though you switched from military to civilian because your still govt. and our TSP is a govt. plan?

Interesting.........

M_M

**Rod** · 05-19-2006, 03:25 PM

Welcome, to the best of my knowledge you do not have 2 separate accounts. You simply get the match now.

BTW, do you see more than 2 account balances when you log into your TSP account?

**jeepjeep92** · 05-19-2006, 04:06 PM

While in the military, I was able to check my account online with my SS# and pin. When I joined federal service, I was expecting the money to just get dumped into that account, but it didn't. After about a month of work, I called and spoke to the people at TSP. They send they would send me a new pin for the new account. I still use my SS#, but depending on which account I'm checking, I use the respective pin. I basically log in twice.

In fact, I was told that I would be able to change the pins through the online system, but that I should never make the pins the same for the two different accounts. That would cause confusion and the system wouldn't be able to tell between the two accounts. (I really think that the money I put in during the tax-free times has something to do with it. The way I interpreted what they told me, I could take that money out now, without penalty as I won't ever owe taxes on it.)

BTW, even though I had an established TSP account with the military, I'm still going through the waiting period until the gov't matching begins!! So, my military time counts towards me being in the 6-hour a PP leave category, and I can "buy-back" my five years towards retirement, but still have to wait through a waiting period to get the gov't matching. That seemed odd, too; but a little piece of knowledge to pass on to anyone moving from military to federal service.

Still, I'm loving the whole TSP system and really appreciate all that I'm learning from this forum--thanks for the welcome's!!

Angela

**mlk_man** · 05-19-2006, 04:17 PM

If you truly will never owe taxes on your military TSP, I would check into rolling it over into a Roth IRA. That way all the earnings you make will also be tax free after you turn 59 and a half and you will have many, many more investment options with it. I use Scottrade myself. Plus, you'll still have your civilian TSP with it's low expense fees. This is what I currently do myself.

Good luck,

M_M

**Rod** · 05-19-2006, 04:21 PM

Originally Posted by mlk_man

If you truly will never owe taxes on your military TSP, I would check into rolling it over into a Roth IRA. That way all the earnings you make will also be tax free after you turn 59 and a half and you will have many, many more investment options with it. I use Scottrade myself. Plus, you'll still have your civilian TSP with it's low expense fees. This is what I currently do myself.

Good luck,

M_M

Hey Mike,

She will only not owe taxes on the contributions (not earnings) she made while in a tax-free zone. All of her other contributions and earnings will be taxed.

**Rod** · 05-19-2006, 04:26 PM

My best guess on the 2 account thing is you probably have to request your military TSP to roll into your FERS- which would be the wise thing to do.

More $$$ you have in one account= more shares= more $$$

**jeepjeep92** · 05-19-2006, 04:31 PM

Honestly, my strategy has been to dump as much as I possibly can into whatever, and as many, retirement savings vehicles as I have available to me!! LOL--now, I think it's time I start being smarter about where that money goes.

So, I already have ROTH started (began in early 2003, before I even started military TSP). If I choose to consolidate, that means my tax-free contributions could get rolled into the ROTH, taxed contributions AND earnings would get rolled into my "new" federal TSP? Does that sound correct?

A

**mlk_man** · 05-19-2006, 04:32 PM

Originally Posted by Rod

Hey Mike,

She will only not owe taxes on the contributions (not earnings) she made while in a tax-free zone. All of her other contributions and earnings will be taxed.

Right. I'd go ahead and pay the taxes on the earnings now and roll it into a Roth. Otherwise, if she's able to fund her Roth now with money she has in savings etc, the yearly max is now $4000, she could just roll her military TSP into a regular IRA and not worry about the taxes now. That would give her 3 retirement accounts and put her way ahead of were most of us fools were back in the day............

Plus she can get a VA loan, free health benies for life, VFW membership..........will you marry me Angela..........

**mlk_man** · 05-19-2006, 04:34 PM

Originally Posted by jeepjeep92

So, I already have ROTH started (began in early 2003, before I even started military TSP). If I choose to consolidate, that means my tax-free contributions could get rolled into the ROTH, taxed contributions AND earnings would get rolled into my "new" federal TSP? Does that sound correct?

A

Not sure they will break it down for you like that, but they might. If you already have a Roth and are contributing to it, I'd consider a regular IRA.

**jeepjeep92** · 05-19-2006, 04:44 PM

The VFW membership DOES rock!!!

I am contributing to my ROTH, but still have a little way to go until I've maxed that out. My plan--I'm already contributing 5% to TSP for fully matching (when it finally kicks in...*sigh*), next I'll work on maxing the ROTH. The yearly max of $4K is for everything combined? I should know this, but the answer escapes me right now.... The regular IRA would come after I hit $4k/year....?