Thread: Birchtree's Account Talk

Originally Posted by Birchtree

I don't plan to change my TSP allocation until 2017 when I roll to an IRA - I'm happy with 20C and 80I.

Hi Birchtree! Could you go noob 101 - and explain the advantages/disadvantages (in layman's terminology) of rolling from the TSP to an IRA? I'm assuming 2017 is when you plan to retire??? Do you roll it over in one lump sum? Do you plan to convert any of it to a ROTH IRA?

I'm assuming places like Vanguard (for example) have lower fees & more funds to choose from - is that the main attraction?

Sorry for such basic questions. If anyone else would rather answer - any info would be appreciated!

I'm about 15 years out & trying to figure out a good strategy. Our current strategy is just to MAX out the TSP each year - and also to MAX OUT both of our ROTH IRAs at Vanguard (and then at age 50, we will also MAX OUT on additional catch-up contributions each year as well - to accumulate as many shares as possible).

Thanks so much!

When you reach a certain age everything you do will have tax consequences. Rolling out of TSP when you can no longer make contributions is a smart maneuver because of the required minimum distribution - you can't choose the fund for distribution - they'll take the money across the board. Opening an IRA with a full transfer will protect your capital to a certain extent because you have more flexibility to build an income stream. The income stream in retirement is where you get some protection from market volatility as well as possible capital appreciation. I've already opened an IRA account at Merrill Edge for my wife when she is ready to get out of the saddle. I've been retired for a number of years and have just let my TSP account run with the wind. There is no tax consequences when you roll directly into an IRA - then you can buy any stocks or funds you want - I prefer the income stocks produce and most can be reinvested At some point once your finances stabilize you can gently roll some IRA money into a Roth IRA paying the tax as appropriate. Your life will depend on your adjusted gross income - try and keep as much as you can. A Roth IRA is a great mechanism for heirs when all withdrawals are tax free - but the flexibility is enormous. Your capital may decrease with market volatility but the income stream will remain constant. I've actually received 78 dividend increase announcements ytd - but I suspect I'll get close to 170. Circumventing the tax man is paramount to keep what is yours. Right now with Merrill Edge I have 100 free trades/month and will split those trades once the wife turns over her money. I believe you are on the right track - but I'd concentrate on individual stocks for greater freedom and better payouts. Plus if you need extra capital just sell a stock and keep everyone else working. You'll get the hang of it.

I forgot to mention that you now can roll directly into a Roth IRA but the taxes are prohibitive. I think just proceeding slowly is the best policy.

There are those times when 4 day trading days just don't work out: -$87K, +$59K, -$19K, -$52K for a give back of -$99K. I still managed to bring in +$38K on the month. My oceanic account is now +$167K ytd - yes I know it's a mere pittance but the year is young yet. I have 105 dividends due in June so I'll take any down days as blessings - still working on building my income stream.

Originally Posted by Birchtree

Rolling out of TSP when you can no longer make contributions is a smart maneuver because of the required minimum distribution - you can't choose the fund for distribution - they'll take the money across the board. I've been retired for a number of years and have just let my TSP account run with the wind. There is no tax consequences when you roll directly into an IRA - then you can buy any stocks or funds you want - I prefer the income stocks produce and most can be reinvested

Wow, thanks - great info & very helpful. I didn't realize you were retired!

I'm assuming you're not eligible (YET) to roll your TSP to an IRA - and that's why you're waiting till 2017? Otherwise, I'm not sure I see the benefit of having it sit in the TSP - if you can roll it to an IRA now???


Have you seen this retirement quiz? It asks 30-some questions to test your retirement knowledge. I scored a 47% - a miserable failing grade - but a 60% is considered a passing grade.

https://perception.theamericancolleg...ROUP=Marketing

I was thinking that with 17.79 million vehicles sold in May that Goodyear should have some nice earnings. Along with many wheel companies and other OEM products.

Stepping in and chasing the bull with a few greenbacks and buying: BTE, UDR, OSGB, CNQ. There are so many sweet wall flowers to buy.

Originally Posted by Birchtree

When you reach a certain age everything you do will have tax consequences. Rolling out of TSP when you can no longer make contributions is a smart maneuver because of the required minimum distribution - you can't choose the fund for distribution - they'll take the money across the board. Opening an IRA with a full transfer will protect your capital to a certain extent because you have more flexibility to build an income stream. The income stream in retirement is where you get some protection from market volatility as well as possible capital appreciation. I've already opened an IRA account at Merrill Edge for my wife when she is ready to get out of the saddle. I've been retired for a number of years and have just let my TSP account run with the wind. There is no tax consequences when you roll directly into an IRA - then you can buy any stocks or funds you want - I prefer the income stocks produce and most can be reinvested At some point once your finances stabilize you can gently roll some IRA money into a Roth IRA paying the tax as appropriate. Your life will depend on your adjusted gross income - try and keep as much as you can. A Roth IRA is a great mechanism for heirs when all withdrawals are tax free - but the flexibility is enormous. Your capital may decrease with market volatility but the income stream will remain constant. I've actually received 78 dividend increase announcements ytd - but I suspect I'll get close to 170. Circumventing the tax man is paramount to keep what is yours. Right now with Merrill Edge I have 100 free trades/month and will split those trades once the wife turns over her money. I believe you are on the right track - but I'd concentrate on individual stocks for greater freedom and better payouts. Plus if you need extra capital just sell a stock and keep everyone else working. You'll get the hang of it.

All true but you will pay higher fees. You can't beat the the TSP fees in an IRA. Like you after I retire I'm going to let my TSP ride when I get close to 70 I'll check my options.
Maybe just maybe they will push required minimum distribution past 70 1/2. I'm not holding my breath.

Originally Posted by markmars

All true but you will pay higher fees. You can't beat the the TSP fees in an IRA. Like you after I retire I'm going to let my TSP ride when I get close to 70 I'll check my options.

Hmmmmm, I'm not so sure about that. Have you seen the fees of the "Admiral" funds over at Vanguard? (VTSAX) for example is .05% w/no other hidden fees. I thought that's about as low a fee as you can get.

Take a look at the attached PDF from APRIL 2015. On page 2 - you will find the TSP fees (expenses) & they are nowhere near as low as Vanguard's .05% fees.

For 2104 TSP Administrative expenses. Net = PER DOLLAR INVESTED.

G F C S I
Gross: .042% .042% .042% .042% .042%
Net: .029% .029% .028% .029% .029%
Other: .0% .017% .03% .020% 0017%

READ THEM AND WEEP!

They are taking a nice little chunk out (if I'm reading this right)
Looks like the least expensive TSP funds are G & C. G total fees = .029% & C = .031%.
S is a whopping .049% in fees!
Even the L Income Fund looks to be .032% "net" + "other" fees - again, if I'm reading this right.

...

If you spent equal amounts looks like BTE UDR and CNQ might not offset OSGB drubbing.

I spent all week buying the decline, since I was 75% cash, it was lots of fun spending money. Today moved from L Income to L2020. Not huge, but enough. I am down for the week, but really not that much and you got to be in it to win it. Have some leftover for Monday and beyond if this was not bottom.

Originally Posted by Birchtree

Stepping in and chasing the bull with a few greenbacks and buying: BTE, UDR, OSGB, CNQ. There are so many sweet wall flowers to buy.