Thread: Life after TSP 3

I have 20K in liquid funds through an equity line of credit. Suze Orman - who I've seen on TV recommends that, as well as paying off all credit cards or at least paying what is charged on a monthly basis, as well as being fully funded in your 401K, TSP, Roth IRA etc. I am...but since I got started with all this soooo late in my career and being single, I'm worried I'll be selling pencils on a street corner if I don't do a few other things - and as I have very little experience in the market, I'm picking everyone's brains. Thanx for all the help. Will let you know what my accountant says.



Patricia

I hope this makes you feel better. I started late in my career also. I started TSP as soon as it was offered to active duty and maxed it out ever since. Single with no kids and no debt has allowed me to not only max out TSP, but open a roth (Jan 04) and put $13,000 into ING. My plan is to put another $18000 into ING in 2005 then in 2006 open a balanced fund with Vanguard (vasgx). After I retire from the military (2010) I will rollover TSP into a traditional IRA (vgsix) and use my military pension to continue funding roth and balanced funds. I will buy a home after retirement (not looking to be the next donald trump!)

Hoping this mix is diversified enough so I don't have to freak out about making enough to supplement pension. I am definitely a hands-off investor.

Any comments/suggestions regarding my plan would be appreciated!

Beck

Spaf wrote:

Vanguard seems to be somewhat complicated (with a lot of paperwork), where USAA is somewhat more simplified. I have my auto and home insurance with USAA, and their service has been very good, I just don't know with their investments?

Does anyone have any information on Vanguard or USAA that would sway my choise one way or another? :*

I think USAA funds are mediocre at best. Vanguard has much better quality funds and a broader selection. I wouldn't be surprised if their fees were better.

I, too, have all my insurance with USAA as well as my Roth and SEP IRAs with them. You aren't limited to USAA funds if you open a regular IRA account with them, so you have access to just about the entire fund universe. All of my funds are NTF (No Transaction Fee) and there are hundreds to choose. You may not have that flexibility with Vanguard.

My g/f's IRA is with Oppenheimer. They suck. In the future, I will move hers to Scottrade and may move mine to them as well. You have access to pretty much everything through them. The ONLY cost: If you redeem a fund held less than 90 days, you will incur a $17 charge. whoopee...

Rolo wrote:

My g/f's IRA is with Oppenheimer. They suck. In the future, I will move hers to Scottrade and may move mine to them as well. You have access to pretty much everything through them. The ONLY cost: If you redeem a fund held less than 90 days, you will incur a $17 charge. whoopee...

Unless you transfer between the same "family" of funds. :^

Rolo,

With Scottrade, If you invest with Potomac, Rydex or Profunds families, you can keep it in for one day even and sell and there is no fee (no 90 day minimmum! I'm not sure about the same family of funds like Mike was talking about. He's done more recent research than me, but I know the above fund families don't have the $17 fee!

Joel

Whoo! I dinna know that. That opens it up for some short-term buying.

Rolo, :#

My wife just retired. We have considered rolling over her TSP to a traditional IRA... ...self directed.She can also take the lump sum (taxable) but we have pretty much ruled that idea out. I wondered if you and the other members could give us your thoughts.

I enjoy reading the message board and Toms morning thoughts on the market. The posts help me make many of my financial decisions,along withmy charting. Sometimes I agree with the posts and sometimes I don't, either way the site is informative and thought provoking thanks to members like yourself...and I notice you are considering Scottrade. Again, if you or anyone else have any suggestions, they will be much appreciated. :^

Ecurb

Hey Ecurb!

I have Scottrade for my regular brokerage account and they are great. Eventually, I will move all of my IRA's (my Roth and SEP and my wife-to-be's Roth) over to Scottrade and link them to one login. Excellent service, options, and no fees. Simplify.

I am surprised at how many investment firms dork up the rollover thing. You can:

• Withdraw all of your money
• Tell them to not withhold taxes as you are doing a transfer
• Keep your money for up to sixty days
• Place it into a new IRA account

or

• State that you want to do a DIRECT CUSTODIAL TRANSFER to Acme Investments, Inc. and to not withhold taxes. Usually, Acme will handle the transfer and not TSP.

This is all in the IRS tax code. I highly recommend Ernst & Young and J.K. Lasser's tax guides. Be sure to click on TSPtalk's Amazon.com links to shop there. Incidentally, I buy 90% of my books from Amazon.

Crap. I ordered a bunch of books there (not investment related) and didn't think to use Tom's links. D'oh!

Ecurb,

I, too, have been with Scottrade for almost 2 years and they, by far are the best for mutual funds.

Good things:

1-no fees for buying mutual funds from the start. In other words, if you have one account and want to buy 10 different mutual funds, there are no fees! I checked with Ameritrade and others and they would charge like $34 or so per fund that you buy! That would be $340 in fees from the above example.

2- If you keep money in a fund for ninety days, there is no fee when you sell (as long as the mutual fund doesn't have a back load or redemtion fee) Now, if you use Potomac, Rydex, or Profunds family of funds, you can have the money in their funds as short as one day, move it between funds (let's say profund bear to profund bull) in those families, and not incur a fee. You can also sell the before mentioned funds after one day and not incur a fee. If using other funds, the fee is only $17 per fund if not kept for 90 days. This is much cheeper than anyone out there.

3- Internet site is easy to work with and you have up to 4:00 pm (3:00 pm for Rydex, Potomac, and Profunds) to sell or buy and you will get the end of day's price. Once you get the hang of it, you can sell like 5 funds in 5 minutes, it really becomes easy.

Drawbacks:

1- Once you sell, you have a 3 day waiting period before you can buy again. This of course, is unless you are transferring within families of funds. For instance, you can transfer from a Bull market fund to a bear market fund within Rydex and it will happen the same day, but you can't make another move with that money for 3 days. All this slows down the timers and day traders, so if you are not trying that approach I would'nt worry about this point #1

2. You don't get any advice. If you're doing it on you own, this doesn't matter.

3. It doesn't have every mutual fund choice. I have done research on different types of funds (small cap growth, large cap value, etc.) and some of the top performing funds over the past 5-10 years are not offered by Scottrade. Which comes to the last sort of drawback.

4. You now have many, many choices. It's no longer 5 funds to choose from but 5000, and that's just mutual funds. It can get confusing.

Incidently, I've lost quite a bit of money this year with all those choices and bad decisions on my part. I'm not sure your philosophy, but you may want to get some help, here (not from me by any means) or an investment advisor before moving it. Rolo kind of touched on this.

That's my two cents and I hope it helps. By the way, I have this same decision with a pension rollover, so I feel your pain.

Joel

You'll need to do "a little" research on the fund you choose too. Some require different minimums to invest in them. Usually lower for an IRA account. Joel said he has invested using less than the "minimum" and it apparently isn't a big problem. I believe it's up the fund manager to accept your offer or not.

I did however see one fund that required a $5,000,000.00 minimum investment! Don't "quite" have that much yet...........Yet...........:^

Good luck,

M_M

Joel, have you or anybody else done much research on ETF's? I'm tring to find out if they have any "inverse" ETF's or 2X ETF's. Any idea?

Thanks,

M_M