Page 2 of 2 FirstFirst 12
Results 13 to 20 of 20

Thread: Transferring TSP to Roth IRA?

  1. #13

    Join Date
    Oct 2010
    Location
    Aiea, Hawaii
    Posts
    1,122

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by OhWell View Post
    I think the easiest way is to transfer to a traditional IRA and some time thereafter convert to Roth. I my case this will be with TD Ameritrade. Each transfer would come with a 25% tax bill for that year. Assuming of course I stay below the top of the bracket.
    Quote Originally Posted by Maricar19 View Post
    Since we are talking about rollovers, how many times can I a roll over funds from TSP to an IRA?
    I s it a one time shot or can I do it multiple times until I deplete my TSP?
    OhWell's method is the best for a series of traditional to roth rollovers. The problem with TSP is the withdrawal limitations again (as previously noted, they SAY they will be loosening up on the requirements. WHEN is the question.). When you retire, you can withdraw (or rollover) a lump sum, but you will only have one more shot at the withdrawal. And if you took an in-service withdrawal, it already counts as your first withdrawal. Either way, you would then be able to only a) Withdraw total remaining, b) Withdraw equal amounts monthly till gone, or c) Buy an annuity to pay you for the rest of your life (or some combination of A,B, and C). Only change after that would be Req'd Min Distributions (RMD's) starting at 71.5. (No choice on the latter.)

    Make sense? Or still clear as mud?!?
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

  2.  
  3. #14

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by uscfanhawaii View Post

    Make sense? Or still clear as mud?!?
    A tad clearer. Thanks for finding time to respond.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

  4.  
  5. #15

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by uscfanhawaii View Post
    OhWell's method is the best for a series of traditional to roth rollovers. The problem with TSP is the withdrawal limitations again (as previously noted, they SAY they will be loosening up on the requirements. WHEN is the question.). When you retire, you can withdraw (or rollover) a lump sum, but you will only have one more shot at the withdrawal. And if you took an in-service withdrawal, it already counts as your first withdrawal. Either way, you would then be able to only a) Withdraw total remaining, b) Withdraw equal amounts monthly till gone, or c) Buy an annuity to pay you for the rest of your life (or some combination of A,B, and C). Only change after that would be Req'd Min Distributions (RMD's) starting at 71.5. (No choice on the latter.)

    Make sense? Or still clear as mud?!?
    Thanks for the analysis! Clearer but still a little muddy. I selected monthly withdrawals from my TSP and I have wondered if I could roll those monthly payments into a Roth IRA to gain all of the ROTH advantages instead of into a savings account. Has anyone done this or do you know if it is feasible? I realize that the withdrawals would be taxable either way and that I would have to wait the five years to gain all of the ROTH benefits. Thanks!

  6.  
  7. #16

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by Scout333 View Post
    I realize that the withdrawals would be taxable either way and that I would have to wait the five years to gain all of the ROTH benefits. Thanks!
    yea, I was wondering anout that , too. On a different note, I read that the five year time frame applies for each Roth conversion.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

  8.  
  9. #17

    Join Date
    Oct 2010
    Location
    Aiea, Hawaii
    Posts
    1,122

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by Scout333 View Post
    Thanks for the analysis! Clearer but still a little muddy. I selected monthly withdrawals from my TSP and I have wondered if I could roll those monthly payments into a Roth IRA to gain all of the ROTH advantages instead of into a savings account. Has anyone done this or do you know if it is feasible? I realize that the withdrawals would be taxable either way and that I would have to wait the five years to gain all of the ROTH benefits. Thanks!
    Theoretically, yes. But I'm not sure you would want to. Referring back to my previous post, the best way to go from TSP to Roth IRA is the way OhWell suggested. 12 rollovers a year is VERY unwieldy. Even worse for paperwork if you take a withdrawal and then roll it to a Roth IRA within 60 days (I believe it is 60...may be 30). Now you have 24 pieces of paper that the IRS will be looking at every year. Again, possible, but what a paperwork headache. Not to mention if you happen to miss a rollover deadline!

    TSP may be willing to set up the monthly rollovers for you...not sure. I don't see anything in the instructions about that. (Personally, I would doubt that the TSP would want to do it, because of the aforementioned paperwork headache.) You can check with them. That would be the only way I would even consider this method. Even then........ And, what if you wanted to actually withdraw one or two, and NOT roll them over. The whole concept makes my head spin.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

  10.  
  11. #18

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by uscfanhawaii View Post
    Theoretically, yes. But I'm not sure you would want to. Referring back to my previous post, the best way to go from TSP to Roth IRA is the way OhWell suggested. 12 rollovers a year is VERY unwieldy. Even worse for paperwork if you take a withdrawal and then roll it to a Roth IRA within 60 days (I believe it is 60...may be 30). Now you have 24 pieces of paper that the IRS will be looking at every year. Again, possible, but what a paperwork headache. Not to mention if you happen to miss a rollover deadline!

    TSP may be willing to set up the monthly rollovers for you...not sure. I don't see anything in the instructions about that. (Personally, I would doubt that the TSP would want to do it, because of the aforementioned paperwork headache.) You can check with them. That would be the only way I would even consider this method. Even then........ And, what if you wanted to actually withdraw one or two, and NOT roll them over. The whole concept makes my head spin.
    I agree. The only reasonable way would be if TSP would send the withdrawals directly to your ROTH IRA. Hmmm. May well be too much trouble. Thanks for your analysis!


  12.  
  13. #19

    Join Date
    Oct 2010
    Location
    Aiea, Hawaii
    Posts
    1,122

    Default Re: Transferring TSP to Roth IRA?

    Update on TSP changes coming down the pike. Alternative 'window' investments, and increased post retirement withdrawal options.

    http://news.fedweek.com/t/296876107/9092797/5216/30/

    Go TSP! (finally!)
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

  14.  
  15. #20

    Join Date
    Jul 2016
    Location
    Texas
    Posts
    2,274

    Default Re: Transferring TSP to Roth IRA?

    Quote Originally Posted by Scout333 View Post
    I selected monthly withdrawals from my TSP and I have wondered if I could roll those monthly payments into a Roth IRA to gain all of the ROTH advantages instead of into a savings account. Has anyone done this or do you know if it is feasible? I realize that the withdrawals would be taxable either way and that I would have to wait the five years to gain all of the ROTH benefits. Thanks!
    I don't think it is feasible. The biggest problem I see would be that Roth contributions have to be earned income, which you may be able to do if you retire in middle of year or if you work part time after retirement. I know many people talk about back door Roth IRAs but am not familiar with details and I believe it is while they are still employed.

    Rather than a savings account, you could always invest in a Municipal Bond Fund to get tax free earnings.

  16.  
Page 2 of 2 FirstFirst 12

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
S&P500 (C Fund) (delayed)
Transferring TSP to Roth IRA?
(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)
Transferring TSP to Roth IRA?
(Stockcharts.com Real-time)
EFA (I Fund) (delayed)
Transferring TSP to Roth IRA?
(Stockcharts.com Real-time)
BND (F Fund) (delayed)
Transferring TSP to Roth IRA?
(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes