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Thread: To Roll or not to Roll

  1. Default To Roll or not to Roll

    I just retired from active duty military, and have a fairly large some of money in my TSP account. I originally wanted to roll all of it over to my new employers 401K plan that is ran through Fidelity. The thought process being that while on active duty, there is no matching contributions, and now my new employer matches 50% of contributions. But have heard that it might be best to leave TSP where it is and simply statrt anew with Fidelity. Anyone had a simular situation or have any advice, it would be much appreciated.


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  3. #2

    Default Re: To Roll or not to Roll

    Obviously you would want to take advantage of the matching 50% of contributions for your new contributions. I see the issue as a cost of fees comparison. TSP has historically had very low fees (8 basis points or so). How does that compare to the Fidelity fund(s)? If higher may make sense to leave your current balances in the TSP. One other consideration is the TSP's current plan to limit transactions to 2 per month, if you are active in managing your account that may not be enough. The ability to more actively manage your account may be worth the additional cost in fees. Good luck!

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  5. #3

    Join Date
    Apr 2005
    Location
    Gainesville, Florida, USA
    Posts
    24,244

    Default Re: To Roll or not to Roll

    If you have acquired a large balance a properly allocated portfolio doesn't need to be regiggered everytime the weather changes. Deep pockets allows you the advantage of leverage and a one-half point in one of the funds makes a nice difference - you should be concerned about racking dollars and don't worry about percentages. Of course greater percentages means more dollars but those dollars come with higher risks. You could set up a program where you take a distribution and roll that money into a Roth IRA. Let it take years in the process to complete - don't be in any hurry to give up your TSP.

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  7. #4

    Default Re: To Roll or not to Roll

    I'm in a similar situation and it's a tough call; still undecided but leaning towards leaving in TSP b/c of low expenses, simplicity of investment choices, and away from investment sharks who may be able to take advantage of a mind growing old. - Ed

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  9. Default Re: To Roll or not to Roll

    I have recently retired and after considerable discussion with several financial advisors during the period prior to retiring, I have decided to leave the TSP funds in the TSP. This was done primarily due to my perception that I would have more control to manage my account. My suggestion...take advantage of the 50% match in a new account...for now. Reevaluate in a year.

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  11. Default Re: To Roll or not to Roll

    Everyone, thank you for the words of wisdom, I am like many of you suggested, leaning heavly toward leaving the TSP were it is and reeval in a year. Although I'm currently working for General Dynamics who has a contract with the government, I entend to make my way over to Civil Service were I can use the TSP again anyway. Again, thanks for all the advice.

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  13. #7

    Join Date
    Mar 2005
    Location
    Texas, USA
    Posts
    4,879

    Default Re: To Roll or not to Roll

    "One of the most important questions to ask before you roll out of TSP."

    Will all of my money be FDIC insured? If not, you will need more then one company or brokerage account.



    The data below is from my Scottade Account:


    Retirement Plans and Accounts Eligible for a Maximum Applicable Deposit Insurance Amount of $250,000


    The retirement plans and accounts described below are eligible for a Maximum Applicable Deposit Insurance Amount of $250,000 and all deposits held through such plans and accounts will be aggregated for purposes of the Maximum Applicable Deposit Insurance Amount. This means that all deposits of any one Issuer you hold through the plans and accounts described below will be eligible for insurance up to a total of $250,000.



    Individual Retirement Accounts (�IRAs�). All deposits of the same Issuer held in traditional, Roth, SEP and SIMPLE IRAs will be aggregated for purposes of the Maximum Applicable Deposit Insurance Amount and will be further aggregated with deposits held through other plans described in this section.

    Section 457 Plans. These plans include any eligible deferred compensation plan described in Section 457 of the Internal Revenue Code of 1986.

    Self-Directed Keogh and 401(k) Plans. Deposits held in any plan described in Section 401(d) of the Internal Revenue Code of 1986, generally referred to as Keogh plans, and in any plan described in Section 3(34) of ERISA including, but not limited to, plans generally referred to as Section 401(k) plans. The plan must be �self-directed� to qualify for the $250,000 deposit insurance limit. The FDIC defines self-directed to mean the ability of the plan participants to direct funds into a specific depository institution.

    Retirement Plans and Accounts Eligible for a Maximum Applicable Deposit Insurance Amount of $100,000


    All retirement plans and accounts not listed above, including defined contribution plans and plans that do not meet the FDIC�s �self-directed� criteria, will be eligible for federal deposit insurance up to $100,000 per participant, subject to the aggregation rules described below.

    Additional Aggregation for Purposes of the Maximum Applicable Deposit Insurance Amount


    In addition to the aggregation rules discussed above for retirement plans and accounts eligible for a Maximum Applicable Deposit Insurance Amount of $250,000, under FDIC regulations an individual's interests in plans maintained by the same employer or employee organization (e.g., a union) which are holding deposits of the same Issuer will be aggregated for purposes of the Maximum Applicable Deposit Insurance Amount. It is therefore important to understand the type of plan or account holding your deposits.

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  15. #8

    Join Date
    Mar 2005
    Location
    Texas, USA
    Posts
    4,879

    Default Re: To Roll or not to Roll

    Is My Money Safe if E-Trade Fails?
    By Sun on Nov 13, 2007 in Brokerage, Investing


    SIPC is not the FDIC.


    That sounds like the protection savers will receive when the bank holding their deposits go out of business. However, the protection from the SIPC is different from that of the FIDC, as explained in a SIPC brochure (PDF):

    SIPC is not the FDIC. The Securities Investor Protection Corporation does not offer to investors the same blanket protection that the Federal Deposit Insurance Corporation provides to bank depositors.

    How are SIPC and the FDIC different? When a member bank fails, the FDIC insures all depositors at that institution against loss up to a certain dollar limit. The FDIC’s no-questions-asked approach makes sense because the banking world is “risk averse.” Most savers put their money in FDIC-insured bank accounts because they can’t afford to lose their money. That is precisely the opposite of how investors behave in the stock market, in which rewards are only possible with risk.

    Most market losses are a normal part of the ups and downs of the risk-oriented world of investing. That is why SIPC does not bail out investors when the value of their stocks, bonds and other investments falls for any reason. Instead, SIPC replaces missing stocks and other securities where it is possible to do so…even when investments have increased in value. SIPC does not cover individuals who are sold worthless stocks and other securities. SIPC helps individuals whose money, stocks and other securities are stolen by a broker or put at risk when a brokerage fails for other reasons.

    Well, it won’t be a desirable situation for anybody who has a relationship with the brokerage, whether it’s investing or banking. But, as long as my money and investment won’t disappear just because E-Trade may file for Chapter 11 protection, I think I will leave them with the company for now.

    http://www.thesunsfinancialdiary.com...e-trade-fails/


    http://www.bankrate.com/brm/news/inv.../20020605a.asp
    Last edited by robo; 03-29-2008 at 05:28 PM.
    “There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore

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  17. #9

    Default Re: To Roll or not to Roll

    Re: To Roll or Not to Roll
    To all of you good people, one of our members suggested that I should post for your consideration and advise, a request that i posted in other threads. Thank you in advance for your ideas and suggestions

    COPY:

    "James,
    I am copying the same request in your thread due to pressing circumstances. Thank you.

    Re: Show-me Account Talk

    Show,
    Please excuse my invasion of your thread for a request that I have to make to all my friends in the message boards at TSPtalk. I am making this appeal here because you are highly respected and your thread is widely read.

    Some good friends with whom I have corresponded with through the years have tried to help me, but they have their own problems and their own limitations. I always have been a very discreet and very private person, but the circumstances that are weighing on me have dictated that I open up a bit of my personal life in order to seek wider advise from other colleagues here at TSPtalk.com.

    I would have thought that certain events should be treated with flexibility, and that a supervisor at TSP.gov should be able to use some discretion in order to deal with exceptional problems with a sense of fairness and understanding. We shall see!

    My problem below is self-explanatory. I need your good minds to help. Thank you in advance all!

    To all members at TSPtalk:

    Please treat this as a true personal emergency. I am asking for your help urgently. Since you have helped me in the past, I trust that you might help me find a solution to this problem.

    In January 2008, I had to face some debts and other personal financial obligations. At that time I was in confusion, and it was all quite hectic. Due to the fact that my maximum loan amount was capped at around 40,000, and I needed in excess of $100,000, in the stressful confusion, I decided to do what I believed was the correct thing to do. I took $125,000 dollars, knowing that they would retain 20% witholding for tax purposes. I received the $100,000 dollars and was able to meet all of my existing obligations. My wife and I were able to breathe normally after I cleared the debts.

    It was never my intention to preclude myself from using the provisions of an aged-based roll-over IRA after age 59 1/2. I sincerely believed (and still believed until today) when I called the TSP toll-free number at (877) 968-3778 that the witholding penalty withdrawal was different and separate action which was governed by different regulatory provisions. In my predicament and stress in January, it never occurred to me that TSP thrift would prevent me from doing a roll-over IRA. Today, a representative by the name of Kimberly told me that the application that I filed for a roll-over IRA on March 19, 2008, is being denied for the reasons I just explained above.

    In my good faith I opened an account at the Orlando, Florida branch. It was from that office that the manager faxed the application with their help and with the required information. I have been very excited and looking for the transfer and to manage my IRA.

    This morning (yesterday) I asked Ms. Kimberly at TSP to let me talk to a supervisor, but she left me waiting a long time until she finaly told me that a supervisor would call me in up to 48 hours. Please help me reach someone that may be understanding of my true intention under stress. Your suggestions are highly valued!


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  19. #10

    Default Re: To Roll or not to Roll

    To all:

    Early this morning I drafted a clarification of my current difficulties and sent it to another member who is trying to be helpful. I will omit his name to respect his privacy. However, in seeking your advise, I will post here the essence of what I explained to him.

    "Again I copied the post and it is there now. For your understanding, it is not my wife's IRA. I am the federal employee who is requesting both an in-Service, age based roll-over IRA, as well as an in-Service Financial Hardship withdrawal. The error I made is one of form and not of substance because I did not use the right forms, such as the TSP-76. There was confusion at home; and as a consequence, it resulted in confusion in the use of forms that my stepson and I used.

    So far I have located the written TSP confirmation of the first withdrawal in January. TSP categorized it as an age-based withdrawal in the amount of $125,000 dollars (this includes the 20% income tax withholding). I did receive a direct check for $100,000, with which I am meeting the debt obligations. However, I still have not been able to find the specific written application that I faxed from my office.

    In trying to cut through the tape, I must admit that I (or my stepson who helped me) have made mistakes regarding the wrong format or forms that we used. Both of these transactions I have discussed are so very recent that, in my opinion, that someone should be able to understand the "good faith" transaction that resulted in error, and should be able to correct the essence of the error in a simple, record-keeping, administrative action.

    I do not know if there is an administrative panel, forum, or person capable of resolving conflicts of this nature, by understanding the nature of the error and applying fairness to the confusion. I would need to contact someone who might have the authority to deal with these matters with sense of fairness, and without forcing me to enter into expensive or protracted litigation. Take care, and please keep in touch. Thanks!"

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  21. #11

    Join Date
    Jul 2004
    Location
    Virginia, USA
    Posts
    993

    Default Re: To Roll or not to Roll

    I wish I could offer good news on your dilemma, but I do not think the TSP service office will forgive you for using the wrong/inappropriate form for your January withdrawal. Your January In-Service withdrawal should have used form TSP-76 for financial hardship. It sounds like you may have used form TSP-75 which is for an Age-Based In-Service withdrawal. A federal employee is allowed only one Age-Based In-Service withdrawal as long as they are older than 59 1/2.

    Can you resign from you job for more than 31 days, and then be hired back later, so you can complete a full withdrawal of your TSP account using form TSP-70? That's the only way I see you accessing your TSP account if you already made an Age-Based In-Service withdrawal. The only other avenue is if you can now submit a TSP-76 for a financial hardship withdrawal based upon the debt you had January 1, 2008. I do not know what proof you need to submit with TSP-76.

    airlift: Early this morning I drafted a clarification of my current difficulties and sent it to another member who is trying to be helpful. I will omit his name to respect his privacy. However, in seeking your advise, I will post here the essence of what I explained to him.

    "Again I copied the post and it is there now. For your understanding, it is not my wife's IRA. I am the federal employee who is requesting both an in-Service, age based roll-over IRA, as well as an in-Service Financial Hardship withdrawal. The error I made is one of form and not of substance because I did not use the right forms, such as the TSP-76. There was confusion at home; and as a consequence, it resulted in confusion in the use of forms that my stepson and I used.

    So far I have located the written TSP confirmation of the first withdrawal in January. TSP categorized it as an age-based withdrawal in the amount of $125,000 dollars (this includes the 20% income tax withholding). I did receive a direct check for $100,000, with which I am meeting the debt obligations. However, I still have not been able to find the specific written application that I faxed from my office.

    In trying to cut through the tape, I must admit that I (or my stepson who helped me) have made mistakes regarding the wrong format or forms that we used. Both of these transactions I have discussed are so very recent that, in my opinion, that someone should be able to understand the "good faith" transaction that resulted in error, and should be able to correct the essence of the error in a simple, record-keeping, administrative action.

    I do not know if there is an administrative panel, forum, or person capable of resolving conflicts of this nature, by understanding the nature of the error and applying fairness to the confusion. I would need to contact someone who might have the authority to deal with these matters with sense of fairness, and without forcing me to enter into expensive or protracted litigation. Take care, and please keep in touch. Thanks!"
    Last edited by EW_ret; 04-05-2008 at 08:18 AM. Reason: Add airlift quote

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  23. #12

    Default Re: To Roll or not to Roll

    EW_ret

    Thanks for your prompt response. I suppose that the most feasible solution is your suggestion to submit a TSP-76 for a financial hardship withdrawal based upon the debt I had January 1, 2008.

    Do you (or anyone else) whether this will be acceptable to TSP, or are we breaking unchartered territory? It sounds very reasonable to me, in view of the fact that I have proof of debt for that period of time; and also, that I have never requested or exhausted my right to request a hardship withdrawal as such. Or are we dealing with unflinching beaurocrats that might not accept the proof of debt after the fact? Do you know an address where I can write to, in case I have to file an administrative appeal, or do I use the same address as the other requests even for an appeal?

    Thanks again EW. Any other voices or suggestions are welcome!

    Quote Originally Posted by EW_ret View Post
    I wish I could offer good news on your dilemma, but I do not think the TSP service office will forgive you for using the wrong/inappropriate form for your January withdrawal. Your January In-Service withdrawal should have used form TSP-76 for financial hardship. It sounds like you may have used form TSP-75 which is for an Age-Based In-Service withdrawal. A federal employee is allowed only one Age-Based In-Service withdrawal as long as they are older than 59 1/2.

    Can you resign from you job for more than 31 days, and then be hired back later, so you can complete a full withdrawal of your TSP account using form TSP-70? That's the only way I see you accessing your TSP account if you already made an Age-Based In-Service withdrawal. The only other avenue is if you can now submit a TSP-76 for a financial hardship withdrawal based upon the debt you had January 1, 2008. I do not know what proof you need to submit with TSP-76.

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