TSP Roll over to IRA

[ashdown]

I have read the lititure about the subject that the TSP website provides, though I have a question. Can I do this any time or do I have to wait till I either seperate from service or be 55 1/2? The pamphlet is unclear about that from what I can understand. What I would like to do is move my TSP funds over to a traditional IRA. Thanks

[tsptalk]

Welcome ashdown. I can say with certainty that gov't employees cannot do that, but it may be different for the military - although the documentation leads me to believe you cannot make a rollover while still in the military...


From www.tsp.gov (http://www.tsp.gov)...


Are there any limitations on making withdrawals while still in service? http://www.tsp.gov/resources/top.gif (http://www.tsp.gov/uniserv/features/chapter12.html#top)


The TSP is a long-term retirement savings plan that provides special tax advantages. Limitations on in-service withdrawals help ensure that retirement savings will be used for their intended purpose. Therefore, TSP participants who are still members of the uniformed services, including those employees in non-pay status, are limited to the following two types of in-service withdrawals:


Age-based in-service withdrawals for participants who are 59½ or older.



Financial hardship in-service withdrawals for participants who can certify that they have a financial hardship.

When you make an in-service withdrawal, you cannot return or repay the money you remove from your account, so you permanently deplete your retirement savings and future earnings on the amount withdrawn. If you are in pay status, before making an in-service withdrawal you should evaluate your options to see if a TSP loan would be more beneficial. (See "TSP Loan Program (http://www.tsp.gov/uniserv/features/chapter11.html).") If you have an outstanding TSP loan, making an in-service withdrawal will not eliminate the requirement to make loan payments. (Note: If you have tax-exempt money in your TSP account as a result of contributions from pay earned in a combat zone, when you make an in-service withdrawal, the money will be taken proportionally from the tax-deferred and the tax-exempt balances in your account.)
What are the rules for an age-based withdrawal? http://www.tsp.gov/resources/top.gif (http://www.tsp.gov/uniserv/features/chapter12.html#top)


Although few uniformed services members will serve beyond age 59½, if you are an active member of the uniformed services at or after age 59½, you can make a one-time-only withdrawal of all or any portion of your vested account balance. (If you have a uniformed services and a civilian TSP account, you can only make an age-based withdrawal from the account(s) associated with your current employment. If you are in Federal service and the Ready Reserve, you can make an age-based withdrawal from each of your TSP accounts.) Your request must be for at least $1,000 or for your entire account balance (even if your balance is less than $1,000).


If you make an age-based withdrawal from a TSP account, you will not be eligible for a partial withdrawal (http://www.tsp.gov/uniserv/features/chapter13.html#sub2) from that account after you separate from service.

[ashdown]

Thank you very much for the reply. I wasnt sure if that was how it was applied. Thanks again!

[OMA]

anyone have experience in the rollover after separation? I'm considering it - but don't know what the hassle-factor is w/ TSP.

[tsptalk]

It's pretty easy.

[JimmyJoe]

Tom's right. Didn't do it for myself though. TSP 70,(02/02/10 version). On the first page, enter how much, single or monthly payments, you want to provide to the IRA. The 2nd page, you provide some transfer info, address of IRA company, and enter a few other bits of info about IRA plan. Sign and send.

[OMA]

Tom's right. Didn't do it for myself though. TSP 70,(02/02/10 version). On the first page, enter how much, single or monthly payments, you want to provide to the IRA. The 2nd page, you provide some transfer info, address of IRA company, and enter a few other bits of info about IRA plan. Sign and send.

Moving $110k from TSP to Vanguard IRA then will convert to Roth over the course of 4-5 years. I have $17k in tax exempt. Trying to figure out how the IRS will treat this conversion. I need to separate the $17k from taxable portion?

Learned that military members us TSP-U-70 (Feb 2010) rather than just the TSP-70. (U=Uniformed?). Still reading over the long instructions - probably will tell me how to divide the tax free from the taxable.

[domingo3]

The rollover/conversion was pretty easy. I used Fidelity, and I'm sure Vanguard does just as well with facilitating the process. When it comes to the tax treatment, though, probably everyone will refer you to a tax advisor because they don't want any liability associated with giving tax advice. I rolled mine over all in one year, so it was easy.
It sounds like you have more than I did, so it probably makes sense to spread out the conversion. You'll have to do some research on your own to figure out how to distribute the tax exempt contributions, or else hire a professional as suggested.

[airborne1092]

never mind - it was a stoopid rant.

[tsptalk]

never mind - it was a stoopid rant.
Welcome airborne! I actually read your post when I received the email update - it wasn't "stoopid". You brought up some good points.

Thanks for joining us and I hope you continue to post.

[Buster]

I'm doing it Right now......No Burro, not your favorite pass time...:laugh:


I'm Rolling my TSP into an IRA thingy..I'll be the first to admit..I'm not the brightest when it comes to these things..So I will report back once I know exactly what I'm getting into..The Money dude said it will earn me; Best case, 14% and worst case, 5%..so he said I should look for an average yield of about 9.5% annually typically..It sounds pretty good to me..But like I said, I don't know if it is good or not...:confused:

[garnertr]

Ahh this is exactly what I'm looking in to doing, anyone have any other tips on this? I'm going to visit my investment account and see if there is anything around... :)

[garnertr]

Ahh this is exactly what I'm looking in to doing, anyone have any other tips on this? I'm going to visit my investment account and see if there is anything around... :)

I found out a few items regarding my TSP. I'm slated to retire 3/31/2011. I'm on my house/job hunting at this time. So, here we go!

I have ING Direct for my bank, good little bank, this is my secondary bank, my direct deposit is with Navy Federal, so ING is my play fund bank, no access except via Internet, thus, easy to control Impulse buying.

So, my investment account is Sharebuilder, which was picked up by ING Direct, so that is nice. My bank and investment brokerage is now shared together, so nice merging one stop shopping.. :)

I was wondering now, how to merge my TSP into my brokerage, I didn't see anything online at TSP (just a quick search), but this morning, while looking for my 1099-INT (which won't be out until FEBRUARY, thanks US Government!), I saw a link on "how to roll 401k programs into ING", so, I clicked it and WHAT DO YOU KNOW? I found everything that I needed to roll my account.

A good weekend of reviewing and finally found it! :) I'm happy.

Once I retire, I'll be able to roll it into my ING Direct aka Sharebuilder account.

[garnertr]

Found it, my investment account (ING Direct aka Sharebuilder) initiates the request from TSP to transfer. So step 1 - create an IRA, step 2 - request tsp to roll into it, step 3 - wait! :)

[champno6]

I apologize if I'm being too personal here but could anyone please explain why a person would roll their thrift over to an IRA rather than leaving your money in the thrift and withdrawing it with one of the thrift withdrawal options? I'm 61, been retired for 4 years now and thinking about starting to use my thrift money as I haven't done a thing with it since I retired. I am a CSRS and living off my monthly annuity checks for now and money my wife makes. She is planning on retiring in a few months so between her retirement checks, my annuity and now am considering adding in some thrift soon as I can figure out what's my best withdrawal strategy. Any and all opinions would be greatly appreciated. Thanks.

[Frixxxx]

I apologize if I'm being too personal here but could anyone please explain why a person would roll their thrift over to an IRA rather than leaving your money in the thrift and withdrawing it with one of the thrift withdrawal options? I'm 61, been retired for 4 years now and thinking about starting to use my thrift money as I haven't done a thing with it since I retired. I am a CSRS and living off my monthly annuity checks for now and money my wife makes. She is planning on retiring in a few months so between her retirement checks, my annuity and now am considering adding in some thrift soon as I can figure out what's my best withdrawal strategy. Any and all opinions would be greatly appreciated. Thanks.
I would recommend discussing with a tax person to determine the implications of withdrawal. If you don't have to worry about the tax man, then the best thing to do is determine if you want protected (annuity) income or just basic withdrawal. If a Lump sum is all you need, then do it! Roll that puppy over to an IRA that you have more control over if you don't need the money. I have a great IRA that allows me a better return so I siphon money out of my TSP account to reap the rewards of more mobility and better returns.

Good Luck ~ Champ!:cool:

[tsptalk]

I apologize if I'm being too personal here but could anyone please explain why a person would roll their thrift over to an IRA rather than leaving your money in the thrift and withdrawing it with one of the thrift withdrawal options?
Welcome champno6! One of the main benefits of having your money in an IRA vs. the TSP is investment options. If you want to buy gold, REIT's, individual stocks, commodities mutual funds, etc., you can do that in an IRA.

If that's not your thing, the TSP is fine.

[champno6]

Appreciate the replies but guess I'm still a bit confused. If I stay with the thrift and take monthly payments of some type, don't I still have at least a daily option of which fund accounts my balance is left in? Couldn't I still transfer into the various funds? Other than the risk, and I assume it'd be the same with TSP or IRA if I select something high risk like the C, S and/or I funds or low risk like the G fund. I don't need/want, at least at this time to have anything other than a montly income of some amount to supplement my regular CSRS annuity. I'm thinking I need to try to decide if I want the guaranteed monthly incomes (life annuity) and try to out live things or just take a stab at it and select X amount a month till it's gone and then I'd still have my regular annuity to live on and hopefully by then I wouldn't need much more than my regular annuity to live on anyway.

[Frixxxx]

Appreciate the replies but guess I'm still a bit confused. If I stay with the thrift and take monthly payments of some type, don't I still have at least a daily option of which fund accounts my balance is left in? Couldn't I still transfer into the various funds? Other than the risk, and I assume it'd be the same with TSP or IRA if I select something high risk like the C, S and/or I funds or low risk like the G fund. I don't need/want, at least at this time to have anything other than a montly income of some amount to supplement my regular CSRS annuity. I'm thinking I need to try to decide if I want the guaranteed monthly incomes (life annuity) and try to out live things or just take a stab at it and select X amount a month till it's gone and then I'd still have my regular annuity to live on and hopefully by then I wouldn't need much more than my regular annuity to live on anyway.
If you are taking payments from TSP, then you can still move your account balance within the 2 IFT/Month rules. We try and get the most control over our money when it comes to investing. If you move to an IRA that gives you more freedom to invest in other than the stock market, then move it. If you like the TSP system, stick with it!:cool:

[Scout333]

Appreciate the replies but guess I'm still a bit confused. If I stay with the thrift and take monthly payments of some type, don't I still have at least a daily option of which fund accounts my balance is left in? Couldn't I still transfer into the various funds? Other than the risk, and I assume it'd be the same with TSP or IRA if I select something high risk like the C, S and/or I funds or low risk like the G fund. I don't need/want, at least at this time to have anything other than a montly income of some amount to supplement my regular CSRS annuity. I'm thinking I need to try to decide if I want the guaranteed monthly incomes (life annuity) and try to out live things or just take a stab at it and select X amount a month till it's gone and then I'd still have my regular annuity to live on and hopefully by then I wouldn't need much more than my regular annuity to live on anyway.

Champ, If you just need a little supplement you can try to earn 4 -5 % with a conservative mix of funds and just take out the earnings ( at least until you reach 70 1/2 when you have to start taking out the principal).

[champno6]

What is the 2IFT/mo rule? I thought we could make moves on a daily basis. I haven't touched my thrift yet. Just thinking it's time to make a move to either move all to an IRA or leave in tsp and take out monthly pmts. to supplement my regular annuity. Thanks.

[pmcint01]

Thrift Savings Board thought it was costing everyone too much to have unlimited trades. They really only want people to buy and hold and not time the market. So they only let you do 2 intrafund transfers per month.



What is the 2IFT/mo rule? I thought we could make moves on a daily basis. I haven't touched my thrift yet. Just thinking it's time to make a move to either move all to an IRA or leave in tsp and take out monthly pmts. to supplement my regular annuity. Thanks.

[Birchtree]

You must consider that both a traditional IRA and TSP have a required minimum distribution that will hurt you later in life for more taxes. If you want to take a monthly withdrawal from TSP you can put that money into a Roth IRA that has no RMD. You just pay your taxes up front. Take gentle montly payments and use the rest to make more money in TSP that is quite cost effective.

[champno6]

What is RMD?

[burrocrat]

What is RMD?

required minimum distribution.

after a certain point, laws say you must spend it, can't keep it. well you can, whatever is left after you pay the tax.

[jpcavin]

Required Minimum Distribution

[jsperl]

for most of us, i think keeping our money in the tsp is the smart thing to do. the cost of maintaing a tsp account is very low and i think there is a sufficient number of investment options and withdrawal options to satisfy most of us. i have transferred ira accounts into the tsp and i am very happy i have done so. i am no investment wiz and don't think most of us are. don't let anybody, talk you into transferring your money out of the tsp, unless you yourself know exactly what you are doing. stay away from free seminars/sales pitches, promising you high returns. i have heard too many horror stories. we have spent too many years growing our tsp account, to risk it on a stranger's word(commissioned salesperson). if you are retired, safeguard your account and that means leaving it in the tsp. interest rates are expected to rise over the next 2-3 years and that would make a lifetime annuity more attractive and a good withdrawal option. retirement is not a time for risk. i have been retired for 7 years and i am looking forward to making a withdrawal option to supplement my csrs pension. if rates go up, i will purchase an annuity. i want a carefree/risk free/ peace of mind retirement and i want that for all of my fellow retirees.

[WorkFE]

Great 1st post and I did not need my glasses.