What should a federal employee do with Thrift Savings Plan (TSP) in retirement? This video discusses 3 options for a newly retired FERS employee as well as pros and cons of each.
Deciding what to do with your TSP is one of the more important ones in your federal retirement….(read more)
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Thanks for info I’m trying to retire from USPS they make it so complicated anyone in Albuquerque NM u can refer?
My wife and I will be retiring by the end of the 2022. We are looking to downsize our home and wanting to purchase a new home. I will be receiving a post office annuity and social security supplemental(obviously until 62). I also have about $500k in my TSP. I wanted to just take a scheduled set amount out of my TSP every month. While applying for a mortgage. Can the scheduled monthly TSP payments be recognized as a defined benefit and used in calculating my monthly income? I don't see myself purchasing a Met life annuity. Thanks in advance for any help or suggestions you may have on this issue. Keep up the great work educating us federal employees..
Can a TSP beneficiary transfer their account to an IRA?
Hello. Thank you for all of the information. My question is regarding separating from the government (as a civilian employee) or taking an early retirement. If a person has a tsp loan and separates or retires early how is that handled? Can the loan be paid back from the remaining balance in the tsp or does a person continue to make loan payments on their own? Are there options?
I am about to retire in a few months after 25 years of max contributions in the TSP C fund which has performed outstandingly. My wife and I are both high wage earners and will both get pensions which net will be twice our anticipated retirement budget (zero debt, zero mortgage). We also have a large cash safety net, her large 401k, and a large taxable investment account (100% S&P index fund). Since we are very risk tolerant, I am thinking of keeping my TSP as is, 100% C fund, and maybe draw at 2% per year (half the 4% rule). If the market crashes, we can wait it out 5 to 10 years without withdrawing, no problem. With 10% compounded return, we would likely end up with a huge TSP in old age for heirs or charities of our choice. I am aware of the age 72 RMD's. I really don't like bond funds since they are based on debts that will never be repaid and don't even keep up with inflation. Is this a good plan?
Failed to discuss the other withdrawal options associated with leaving funds in the TSP…….lump sums and scheduled payments outside of annuities.
So itt is my understanding that IRA and TSP are considered different. So, could I rollover my Roth part of TSP $ to Roth IRA and call it RMD?
This is very informative and helpful!! I'm 34 years old and I'm investing13% into Roth TSP and plan on working till I'm 60-62yrs!! I already have been investing past 7 years!!
Whether you are in good health or not at retirement I suggest you do a Roth conversion. Move if you can to a tax friendly state and then in one or two or even three years convert it over. You will pay federal tax on the transfer. Around 30%. But remember that the Ira funds are not all yours. The Roth is. On the Anuity side of the discussion be aware that there are insurance companies that will charge you about 10% like $90,000 on $900,000 and you can get a survivor benefit with it. But they are rip offs. A better option if you are not an experienced investor is to get into several Vanguard funds. But do it in a rising market. Right now there is a lot of downward pressure due to rising interest rates, inflation, and a pending Ukrainian war.
A hard NO to annuities!!
Very helpful, thanks for sharing.
Good info. Here's the big elephant in the room you did not did not discuss. First, particularly during the pandemic, the market was kind of predictable. With TSP, if you want to move between, say. G and C, you have to make a decision before noon as to what the price would be at market close, four, If you were retired, you can move your money to Vanguard/Fidelity etc… and make near real time decisions in a wild market. You can also pick a stock here and there. Both of those brokerage firms have similar costs and don't charge for stock trades.
i believe that if you transfer money out into another account you forfeit the 10% penalty grace. ?
Let FED retires know that it will be 6-18 months to get thru the interm process. I retired on 8-27-20 from ICE and still waiting to get out of interm pay status. Also if there is a divorce involved you will get less than what they tell you. I have a divorce and im getting 1/4 of what they told me. This is a real drama for new retires. Getting in touch with opm and getting answers is very difficult if any luck at all. It would be a great idea to push the people to get cash savings built up and to maximize their AL for buyout. I f they are able to max out the 401k with catch ups no matter of what month they retire it will help in the tax situation.
Just wanted to pass this info along for your subscribers.
good video!
Great video. Question: I know with the TSP in order to make a withdrawal I must get my spouses notarized signature. Is this true for an IRA?
Great video. Very straight forward answers to questions that I had for TSP vs IRA.
Please answer on option #2, what happens if you pass away? No one addresses that.
Vanguard has variable fees based on your holdings. If you maintain a balance of 5OK or more of a particular fund, they are "Admiral Shares" which have reduced fees. Below 50K they are "Investor Shares".
I had both a TSP account and a CSRS Voluntary Contributions account. The VC account was converted to a fixed annuity at 7.6% when I retired. I'm just going to let the TSP grow for another decade or so before starting to draw it down.
So if I’m not contributing anymore, what happens to that money left in TSP. Am I still invested in those funds & depends on the market where I can still lose or gain? I’m 58 & plan on retiring end of year, I will be taking a monthly payment from TSP.