Transfer Employer Fidelity 401k to TSP?????

[funkyhunky]

I have left Federal Service (now a federal contractor doing the same work for twice the pay :cheesy and just learned that I might be able transfer my employer 401k funds to the TSP??!!

Right now I have Fidelity, and their core investments have the following expense ratios:
SP500 (TSP C) @ .023%
USA Small cap (TSP S) @ .052%
International (TSP I) @ .1%
Bonds (TSP F) @ .05$
Stable Value (TSP G) @ .19%
Target Date (TSP L) @ .06%

TSP beats that, right??? Well, after reading this I'm not so sure: https://www.tsp.gov/PDF/formspubs/high16b.pdf

Read the part about "Other Expenses" - are those charged in addition to the admin expenses? If so then a lot of the differences are marginal.

Is it worth the hassle to transfer my funds to the TSP, do you think it would be worth it? I kind of want to for the security of the G fund and not needing to manage 2 separate 401k's

 

[tsptalk]

Hmmm, I'm not sure about that. You left the gov't and you want to transfer into the TSP?

The TSP is great for limiting costs, and if you are only interested in the G-fund, that works. But I actually transferred a large portion of my TSP into a Fidelity 401K when I resigned. I preferred the flexibility and the multiple investments options of the 401K, so to each their own I guess.

But, I'm not so sure about transferring into the TSP when leaving gov't service. Hopefully someone else has that answer.

 

[Skorcher]

The TSP web site says you can transfer money from an eligible retirement plan to the TSP. No requirement that you have to be a current federal employee/ military. Check out https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/RolloversTransfers/methods.html

 

[tsptalk]

Who Is Eligible to Participate in the TSP?

https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/index.html#whoIsEligible

More info about transfers. I still don't know the correct answer. Hope it helps.

https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/RolloversTransfers/methods.html

 

[uscfanhawaii]

https://www.tsp.gov/PlanParticipati...ributions/RolloversTransfers/eligibility.html

Yes you can!
The above quote says if you are separated from gov't service, you can still move over many different outside accounts, including employer 401K's. Don't think I ever heard anyone wanting to do that before! Interesting. :beerchug::cool3:

Next question is 'will your current employer allow you to move your $$ OUT!'

 

[k0nkuzh0n]

that is interesting. I thought you couldn't contribute to TSP if you were not currently a government employee. Maybe transferring is a loophole?

 

[tsptalk]

https://www.tsp.gov/PlanParticipati...ributions/RolloversTransfers/eligibility.html

Yes you can!
The above quote says if you are separated from gov't service, you can still move over many different outside accounts, including employer 401K's. Don't think I ever heard anyone wanting to do that before! Interesting. :beerchug::cool3:

Next question is 'will your current employer allow you to move your $$ OUT!'

That is surprising. Thanks for letting him know since I was misleading funkyhunky.

Already separated from Federal service?
Even if you've started to withdraw your TSP account in monthly payments, you can still move money from your other eligible plans into your TSP account.

 

[k0nkuzh0n]

https://www.tsp.gov/PlanParticipati...ributions/RolloversTransfers/eligibility.html :

The TSP will accept into the traditional balance of your TSP account:

• both transfers and rollovers of tax-deferred money from traditional IRAs, SIMPLE IRAs, and eligible employer plans.

Based on that, couldn't you contribute $18k a year to your TSP, through payroll, and then transfer $5.5k a year which you contribute to an IRA per year?

...Not that I want to, but just seems interesting!

 

[tsptalk]

I guess that is possible, but it may be tricky. It sounds like they only accept pre-tax money and your income could limit the amount.

https://www.tsp.gov/PDF/formspubs/tsp-60.pdf

What tax-deferred distributions will the TSP accept?The TSP will accept both transfers and rollovers of tax-deferredmoney from any eligible retirement plan as defined in InternalRevenue Code (IRC) § 402(c)(8)(B). An eligible retirement plan includesa traditional individual retirement account (IRA), a SIMPLEIRA to which the participant has contributed for at least 2 years,and an eligible employer plan. To be accepted by the TSP, distributionsmust meet different requirements depending on whetherthey are from an IRA or an eligible employer plan.

Before submitting this form, a TSP participant who would liketo transfer or roll over money into the TSP should check with arepresentative of his or her IRA or plan to determine what portionof a distribution (if any) meets the applicable requirements, asdescribed below.

Note: Participants are required to certify in Section I of thisform that the distribution they are seeking to transfer or rollover into the TSP meets the applicable requirements. If a participantcannot sign the certification, the TSP cannot accept thetransfer or rollover.

Here's the limits...

https://www.irs.gov/retirement-plan...-you-are-covered-by-a-retirement-plan-at-work

 

[Firedog]

In most cases you cannot transfer from a 401K to another plan(IRA, etc) while still with that employer. I know that I cannot transfer my 457 until after I leave my current employer or I would have transferred to an IRA so I would have more investment options from which to choose.

 

[Skorcher]

Federal News Radio is going to have a show on this topic Monday July 25.
Federal News Radio - FederalNewsRadio.com

What Do I Do with my TSP When I Retire?

July 25, 2016
This week on For Your Benefit, Bob Leins will host Tammy Flanagan, Federal Benefits Expert, and Kristina E. M. Sturgis, CFP[SUP]®[/SUP] CDFA™ Financial Advisor, NITP Seminar Presenter and Certified Financial Planner™ with Patterson and Associates, a financial advisory practice of Ameriprise Financial Services, Inc.
Today's show will take the TSP to the third level, beyond accumulation and management to the level of "decumulation!” During your retirement years, you will have to make important decisions regarding your retirement savings just as you did while accumulating your TSP.
Have you thought about the following considerations?

• How much are the administrative expenses for your investments?

• What investment choices do you have to choose from?

• Are there tax strategies that you can employ when withdrawing your retirement savings?

• Are there withdrawal strategies to create income for life?

• Do you want your withdrawal options to provide control of the amount and frequency of your distribution?

• What are required minimum distributions and when do you have to take them?

• How does the G Fund compare to other "cash" investments?

• Should all of your money be in the G Fund after you retire?

• Are there considerations for your beneficiaries?

• Does your spouse have protection and rights to your TSP?

For questions or comments, email us in advance at ForYourBenefit@nitpinc.com or call 202-465-3080 this coming Monday. Program begins at 10:05 ET and questions are accepted between 10:20 AM and 10:55 AM.

 

[Chulke]

I had a small amount in a employer sponsored 401K when I worked at AT&T. Got a new job recently with the VA and rolled over that money to the TSP this year...it was easy to do. That's my only experience with the rollover.

It wasn't a lot of money though...so no real value added in my comments other that me posting my 2 cents worth...lol!

 

[SWAVET]

https://www.tsp.gov/PlanParticipati...ributions/RolloversTransfers/eligibility.html
[h=3]Eligibility Requirements[/h]
The TSP requires that:

• You have an existing TSP account (I believe you have at least $300 in tsp account for it to consider active). You cannot open a TSP account by transferring money into it.
• The money that you intend to move is considered an "eligible rollover distribution" for Federal income tax purposes. You can verify this by checking with the administrator of the plan or IRA from which you are moving the money. You can also consult a tax advisor.

The TSP will accept into the traditional balance of your TSP account:

• both transfers and rollovers of tax-deferred money from traditional IRAs, SIMPLE IRAs, and eligible employer plans.

The TSP will accept into the Roth balance of your TSP account:

• only transfers (i.e., direct rollovers) of qualified and non-qualified Roth distributions from Roth 401(k)s, Roth 403(b)s, and Roth 457(b)s. If you don't already have a Roth balance in your existing TSP account, the transfer will create one.

The TSP will not accept Roth rollovers that have already been paid to you and it will not accept transfers or rollovers from Roth IRAs.