Originally Posted by
uscfanhawaii
If you like the TSP options, then you must also like the index funds that the TSP funds mimic. Bond Fund, S&P 500, Small Cap, Int'l Fund. Those are all available in outside IRAs and do not require high Brokerage Fees. My outside IRA funds are with Vanguard (and there are many others available too). Sure, you could use a broker to pick special stocks, or even use a Managed Fund that have higher fees. Point is....you CAN do that, but don't HAVE to. Together with the better withdrawal options that you recognize, you can see why the majority of retirees take everything out of TSP and move it to an outside IRA. It also explains why TSP has a big banner on it's home page, urging retirees to leave their funds in TSP and part of their big effort to convince people to stay.
I wrote to TSP (maybe I should have written to the FRTIB directly) and told them that I thought they should be trying to help Fed workers to make the best decisions for the worker, and not just try to convince retirees to stay. To me that should be a fiduciary duty, not an advertising blitz. But their response was just that they could only do what was allowed by Congress, and altho changes were being proposed, they take a long time to be approved and put into action. So why don't they tell retirees to take their $$ out until the rules are more beneficial to the worker? But I did not respond to them....they seem to be missing the point.
One other idea....take MOST out of TSP. Then, when (and if) they change the rules, put it back in. As long as you maintain a TSP account in retirement, you can transfer IRAs INTO the TSP. So do it when it becomes advantageous to do so.
Just expressing SOME of my frustrations with TSP. I was SO EXCITED when I first heard that TSP would be instituting a Roth option. Then I was SO DISAPPOINTED when I found out the rules that were put in place restricting the Roth Option. All my Roth $$ are in an outside IRA. None in TSP.
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