To Roll or Not to Roll

[GGal]

Who thinks, and why:

1. Better to leave balance in TSP, and elect monthly WD, and continue to manage the account among the funds according to your taste for risk.

2. Better to roll to a self-directed IRA, and select high dividend paying stocks, along with some safe funds.

Thanks
GA

 

[atcsat64]

I don't think #1 is a possibility; I thought monthly WD would be the same as buying an annuity which takes away the ability to actively manage your account. I plan on #2 or similar for that reason but obviously will look into it (still have five+ years).

 

[Elgallo]

One may annuitize a portion of the tsp and elect to manage the rest. Same holds true if one elects a string of level payments for 5 years, or monthly, bi annual or annual lump sums.

Of course none of this applies if one annuitizes the entire balance or draws out the entire amount in a lump sum.

 

[Spaf]

IMHO
Looked at several options including a roll over. However decided to stay with TSP and have an annual % / monthly withdrawl.
Reasons:
1. Can always go to CP in the G-Fund.
2. Don't have to deal with fund managers, etc
3. Good index funds.
4. Low expense ratio.
5. Option of the L-Income fund.

However, it depends on your sucess with managing your portfolio.

Check with Rokid or one of our math members. If U have your nestegg properly set up with a withdraw of 4% or less annually..... AND have the safe haven of capital preservation (CP) in the G-Fund.....AND participating in equities when there is a definite Bull trend..... what is your risk vs reward ratio?

Otherwise you let someone else handle your retirement. Who is this someone else.....:suspicious:

Just my 2 cents!

 

[ssafed]

Who thinks, and why:

1. Better to leave balance in TSP, and elect monthly WD, and continue to manage the account among the funds according to your taste for risk.

2. Better to roll to a self-directed IRA, and select high dividend paying stocks, along with some safe funds.

Thanks
GA

GA, I decided to leave it all in TSP and continue to manage it - for the very reasons SPAF cites. Since we don't HAVE to take any withdrawal until 70 1/2, there's several more years to grow the TSP if you don't have to have the additional income. Also, I liked that you could change your mind at any time (a girl's perogative!!!) if you wanted to roll it, take it out, all or a piece at a time at any time now. I retired last July and I'm still happy with my decisions - both to retire & let TSP ride! Good luck!

 

[GGal]

GA, I decided to leave it all in TSP and continue to manage it - for the very reasons SPAF cites. Since we don't HAVE to take any withdrawal until 70 1/2, there's several more years to grow the TSP if you don't have to have the additional income. Also, I liked that you could change your mind at any time (a girl's perogative!!!) if you wanted to roll it, take it out, all or a piece at a time at any time now. I retired last July and I'm still happy with my decisions - both to retire & let TSP ride! Good luck!

Thanks for responding! I take it your agency fully informed you as to your choices. Because the TSP site is just not that clear. It makes it sound like once you make a decision you are stuck with it, except changing the amount of monthly payment each January if you want to.

So, are you saying that if you make the choice to leave it in, you can withdraw whatever you want at any time?

For example, let's say you want $5,000 for a vacation - can you get it? At any time?

That's an important distinction that I need to know.

Then there are other considerations - can I make as much in the TSP as I could in a self-directed IRA? Probably! Even with our limited choices.

Another thing about leaving it in - still no fees for moving money around, right?

Thanks
GA

 

[Spaf]

GG,
Go to the TSP.gov site and download TSP-70. It's a form that also explains all your options.
Changes are made the 1st half of December.
You can withdraw, transfer, change at that time. Not any time.
TSP vs IRA thats a matter of choise.
No fees.
I wouldn't touch my TSP for a vacation. I'd use my tax paid funds for something like that. TSP is strictly retirement (for me).

......... except changing the amount of monthly payment each January if you want to.
So, are you saying that if you make the choice to leave it in, you can withdraw whatever you want at any time?
For example, let's say you want $5,000 for a vacation - can you get it? At any time?
That's an important distinction that I need to know.
Then there are other considerations - can I make as much in the TSP as I could in a self-directed IRA? Probably! Even with our limited choices.
Another thing about leaving it in - still no fees for moving money around, right?

Thanks
GA

 

[GGal]

Okay, now ya'll have really confused me.

I went to TSP-70, which is for a full withdrawal.

I went to TSP-77, which is for a partial withdrawal. But it says you can only make that one time.

So it seems that if you choose to leave your entire balance in TSP when you retire, that you can only make a one time partial withdrawal, and then the next withdrawal must be in full.

Ya'll have lost me with your explanations.

GA

 

[GGal]

I read the booklet at TSP.gov

I think I get it now. Tell me if I'm wrong.

I can leave my entire balance in there when I retire if I want to.

Then, if I want to at a later date, I can choose to take it all at once. Or I can choose to take a one time single partial payment over $1,000 - but that is only allowed once. Or I can choose to begin taking monthly payments, either based on life expectancy or a specific dollar amount. Each December then I can change that dollar amount if I need to. Or I can later take the whole thing out (but not if I've already chosen monthly payments????) Once I've chosen monthly payments I'm stuck with that.

So, I cannot just will nilly take $5,000 here, and $10,000 there on a whim.

Have I got it right now?

So Spaf, which of those are you going to do? Monthly payments?

Thanks
GA

 

[EW_ret]

I retired September 30, 2005. Last year I decided to do IRA Rollover to Vanguard with some of the money in my TSP account. I left some money in my TSP account. When you leave the federal service, you are allowed a "one time" partial withdrawal as long as you have not taken an age-based, in-service withdrawal while employed. I choose to move some TSP money to Vanguard to get free financial plans and move up to the Voyager class. I believe it easier to manage retirement assets when almost all is in one place.

If I decide to transfer the IRA Rollover money back to TSP I could before I turn age 70 ½ and start mandatory withdrawal. One is allowed to transfer a traditional IRA or another pension plan into your TSP account. But, I cannot do another partial withdrawal from my TSP account. I can elect a monthly payment, withdraw all in single payment, or elect annuity on my remaining balance at any time. I can change the monthly withdrawal amount once a year, effective on January 1st of the following year.

 

[EW_ret]

You are allowed to change from a monthly payment schedule to a single final payment. You cannot change back to monthly payments because the single payment is the final payment.

Or I can later take the whole thing out (but not if I've already chosen monthly payments????) Once I've chosen monthly payments I'm stuck with that.

So, I cannot just will nilly take $5,000 here, and $10,000 there on a whim.

Have I got it right now?

So Spaf, which of those are you going to do? Monthly payments?

Thanks
GA

 

[Spaf]

GG,

I think they write the way they do to confuse folks. Might want to give them a call and talk to them, just to be sure.
I elected a less than 4% annual withdrawl with monthly payments.
I normally get it via direct deposit around the 26th of each month.

Basically, when U retire you are going to have a pay gap of 1 month till everything gets reset. So save your leave for a payback. Then refigure when all the pay comes in, cause it's all gonna be different.

Spaf

 

[tspgo_com]

GG,

Please go to www.tspgo.com and click the link "Retirement Plan" on the left menu. These are two articles by Tammy Flanagan. I think she explains the subject of Withdrawal Options very well.

Hope it helps.

TSPGO!

 

[GGal]

GG,

Please go to www.tspgo.com and click the link "Retirement Plan" on the left menu. These are two articles by Tammy Flanagan. I think she explains the subject of Withdrawal Options very well.

Hope it helps.

TSPGO!

That was great - thank you so much. A big help!

The big advantage then of rolling to an IRA (other than more diversification opportunity) is that you can withdraw money from an IRA, willy nilly, as you need it, while if you leave it in TSP, you are limited to monthly withdrawals, a one time partial withdrawal, then a final full withdrawal.

Hmmm. I better go with the IRA. Because of things like emergencies that may come up where I need a chunk, or I might want to give a chunk to a child for some purpose (like a down payment on a home).

The down size of that is I will have to pay Edward Jones or whoever those big commissions when I buy or sell stock in the IRA. And I might make stupid investment decisions.

GA

 

[tspgo_com]

That was great - thank you so much. A big help!

The big advantage then of rolling to an IRA (other than more diversification opportunity) is that you can withdraw money from an IRA, willy nilly, as you need it, while if you leave it in TSP, you are limited to monthly withdrawals, a one time partial withdrawal, then a final full withdrawal.

Hmmm. I better go with the IRA. Because of things like emergencies that may come up where I need a chunk, or I might want to give a chunk to a child for some purpose (like a down payment on a home).

The down size of that is I will have to pay Edward Jones or whoever those big commissions when I buy or sell stock in the IRA. And I might make stupid investment decisions.

GA

The other option would be to get a partial cash payment and roll it over to an IRA and receive monthly payments from what is left in your TSP. eg. Rollover 25% to an IRA and receive monthly payments from the 75% left in TSP. If you expect 12% earnings in your TSP, then a 1% monthly payment (12% yearly) from your TSP would keep your capital intact. I am using the 12% figure because it seems to be obtainable even using some of the most conservatives strategies you find here.

Good luck

TSPGO!

 

[rondalw]

For me personally, I have decided to roll over into IRA. I am a LEO 50 y/o with 32 years service. My choices to withdrawl from TSP (if I so desire) are very limited. I feel comfortable with my financial person as I have dealt with him for years and he is very responsive and yes I pay fees but, I am comfortable with it.

The key is being comfortable with decisions and doing what is right for your own particular situation.

 

[nnuut]

The other option would be to get a partial cash payment and roll it over to an IRA and receive monthly payments from what is left in your TSP. eg. Rollover 25% to an IRA and receive monthly payments from the 75% left in TSP. If you expect 12% earnings in your TSP, then a 1% monthly payment (12% yearly) from your TSP would keep your capital intact. I am using the 12% figure because it seems to be obtainable even using some of the most conservatives strategies you find here.

Good luck

TSPGO!

Dont forget about inflation!! Count on at least 4% a year the way things are going now. That would leave you 8%.
Norman

 

[Spaf]

GG,

You are on FundSurfers top 10 for the last 12 months. With your market savy why go to a IRA?

Seems to me you are better at it, than going back to B&H......?......

Spaf

 

[GGal]

GG,

You are on FundSurfers top 10 for the last 12 months. With your market savy why go to a IRA?

Seems to me you are better at it, than going back to B&H......?......

Spaf

Hello Spaf,

Once we retire, aren't we supposed to be more in CP mode? Little risk? So I was thinking, self-directed IRA, spread among some safe MM funds, some proven investment funds, and some high dividend yield stocks.

Maybe I'll do as suggested, and leave some in TSP.

I have an inherited progressive eye disease.....in a few years I will be legally blind. It might be hard to keep up.
I might not even get to work to retirement age. In fact, it is doubtful.

GA

 

[Spaf]

GG
CP mode!....Only when the Bears are out!
Leave some in TSP!.....You gotta stay around!
I have small pieces of plexi-glass in my left eye, causes iritis, it's a bummer!
S

Hello Spaf,

Once we retire, aren't we supposed to be more in CP mode? Little risk? So I was thinking, self-directed IRA, spread among some safe MM funds, some proven investment funds, and some high dividend yield stocks.

Maybe I'll do as suggested, and leave some in TSP.

I have an inherited progressive eye disease.....in a few years I will be legally blind. It might be hard to keep up.
I might not even get to work to retirement age. In fact, it is doubtful.

GA