In this video, Jose Armenta, CFP®, reviews the advantages and disadvantages of transferring the TSP to an IRA.
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Jose Armenta, CFP®
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Can I transfer my TSP to an IRA before I separate from the military.
For ease of use and flexibility I'm going to rollover my tsp to a traditional IRA. There are just too many restrictions with the TSP and having to notarize my spouse every time I want to make a withdrawal is just ridiculous. As with everything the private sector has a much more cost efficient and easy to use IRA product. It's worth it to spend the time and get a rollover. They don't make it easy but you'll be happy you did.
The most significant benefit of transferring money from the TSP to an IRA is the ability to use your Required Minimum Distribution to make a Qualified Charitable Distribution, thereby minimizing the impact on your Federal Adjusted Gross Income.
Jose, thanks for video. That was a lot of useful information. Keep up the good work!
Thank you!
Thanks, Jose. Good stuff. Another disadvantage to transferring one's TSP (along with their payday allotment) is the fact that he/she would give up the 5% immediate matching from the government. It is a giant advantage for an investment to double immediately! Semper Fi, brother.