TSP ADDS ROTH 401(K) and Self-directed Investment Window

[Cyberzen]

TSP changes call for TSP to offer a Roth 401(K) option soon (reference below). Does anyone know the most effective way to influence the rules they set up for this? I'd like an option to distribute my TSP account by rollover to the Roth in periodic payments. I can already choose this option for withdrawal to outside accounts, so why not to the new TSP ROTH? Perhaps there are others of you who know what's planned or who would like to request this option be in the new rules? If so, I'm interested in hearing from you?


PS Another change of interest - the addition of a self-directed investment window under TSP, if it would be in the best interests of participants, limited to low-cost, passively-managed index funds that offer diversification.


References:

• TSP says they'll be working the rules over the next 18-24 months https://www.tsp.gov/PDF/formspubs/oc06-5.pdf.
• OpenCongress summary - http://www.opencongress.org/bill/111-h1804/show

 

[Boghie]

Cyberzen,

I'll check out the links when I get a bit of study time...

However, there are tax consequences in moving untaxed assets to a taxed account. Money you contribute to your Traditional TSP has never been taxed. Money contributed to a Roth TSP will be taxed as ordinary income and then deposited into your account. Thus, any process of moving assets from your Traditional TSP to a Roth TSP will be taxed at your current ordinary income rate - and, obviously, your tax bracket will increase if you make large moves.

The TSP board my determine that this process (which they really do not control since they have no control over your tax rates) would be too complicated to implement.

Oh well...

 

[Buster]

I already rolled my TSP into a Conventional IRA right after I retired last July..A nicely diversified portfolio..Making consistent gains of 7% to 8% each month...for December it made nearly 11%

 

[Frixxxx]

I already rolled my TSP into a Conventional IRA right after I retired last July..A nicely diversified portfolio..Making consistent gains of 7% to 8% each month...for December it made nearly 11%

PM me this nugget!

 

[KevinD]

PM me this nugget!

Hell with that! Post it for all to see.

 

[merlin]

Hey Buster, pm that info to me.

 

[sdouglas3]

I already rolled my TSP into a Conventional IRA right after I retired last July..A nicely diversified portfolio..Making consistent gains of 7% to 8% each month...for December it made nearly 11%

Buster, send me your secret

Thanks,

Steve

 

[SkyPilot]

Yeah, me too! Serious!!!

 

[Buster]

Okay here it is..I hope I'm not breaking any ethics rules..
______________________________________________

My investment consultants are known as "Investment Professionals inc."

They put me with a group called Lincoln National Life Insurance..They are the ones that actually do all the trading for me..

My portfolio consists of somewhat conservitive stocks but yet making money...BTW, I was off a little on my December's earnings I mentioned..Once I actually used a calculator, I only earned 9.65% over all...Sorry for the eggageration

My Stocks currently are:

AB S/M CAP VAL------------up 9.96%
BLKRK GLB ALLC------> this one was up 20.07%
DEL LTD-TERM--------------up 9.97%
DEL DVRSFD INC------------up 9.98%
AF GLBL GRWTH---------------------up 15%
AF GRWTH-INC----------------------up 15%
AF GROWTH----------------up 9.98%
LVIP DEL BOND------------- up 9.98%

Hope this all makes sense to ya.. good luck