Open Roth IRA with TSP or outside company (Vanguard)

[ks1773]

Hello,

I have heard rumors that TSP will begin to offer Roth IRA to VA employees in July. I was curious if it is smarter to open up the Roth IRA with TSP or with another company ie. Vanguard.

Any advice is welcome, thank you

 

[Kaufmanrider]

Hello,

I have heard rumors that TSP will begin to offer Roth IRA to VA employees in July. I was curious if it is smarter to open up the Roth IRA with TSP or with another company ie. Vanguard.

Any advice is welcome, thank you

I assume you have a regular TSP Account also? Personally, I would opt for one outside TSP that has low cost because you would have more options on where to invest your money and could make more IFT's per month. I don't know for sure, but I think the matching contributions go to your regular TSP, so your ROTH has no real incentive. Now, If I was a new Fed, just starting TSP, and I only had a ROTH, I'd do it, as long as all the matching and automatic was added to it. I thnk those freebies outweight the limited funds and IFT's we have.

Personally, I use Schwab for my ROTH as they have a host of ETF's that are commission free and their costs are very low. Small Caps, Med Caps, Large Caps, Emerging Markets, International Markets, International Small caps, REIT's, Bonds, etc., etc.

 

[uscfanhawaii]

I assume you have a regular TSP Account also? Personally, I would opt for one outside TSP that has low cost because you would have more options on where to invest your money and could make more IFT's per month. I don't know for sure, but I think the matching contributions go to your regular TSP, so your ROTH has no real incentive. Now, If I was a new Fed, just starting TSP, and I only had a ROTH, I'd do it, as long as all the matching and automatic was added to it. I thnk those freebies outweight the limited funds and IFT's we have.

Personally, I use Schwab for my ROTH as they have a host of ETF's that are commission free and their costs are very low. Small Caps, Med Caps, Large Caps, Emerging Markets, International Markets, International Small caps, REIT's, Bonds, etc., etc.

me too!! I have a Vanguard Roth IRA for the same reasons. :nuts:

By the way, it may sound like quibbling, but the TSP version is NOT an IRA. That's why they specifically call it Roth TSP. If you want to see more posts on the Roth IRA vs the Roth TSP, go to http://www.tsptalk.com/mb/tsp-news/9096-tsp-roth-tsp.html?highlight=Roth+TSP or http://www.tsptalk.com/mb/tsp-news/10031-roth-tsp-education-materials.html?highlight=Roth+TSP or http://www.tsptalk.com/mb/tsp-news/10106-roth-tsp-update.html?highlight=Roth+TSP . Lots of plusses and minuses here. There may be others....search the threads for Roth.

There are also links to the TSP official materials on the TSPTalk home page.

Hope this helps! :blink: