TSP, IRA, and Roth?

[ChemEng]

Is there any advantage to having TSP, IRA, and Roth accounts?

Right now I am contributing 5% to my TSP and maxing my Roth. I am considering increasing my TSP contributions back up. But after looking through the options my Roth has, I am debating starting an IRA with the money instead. It just has many more options to work with than the TSP.

Is this possible? Does anyone on here already do that? Is there anything to avoid or be aware of?

 

[Show-me]

I have Roth with Scottrade and am thinking of opening a Traditional IRA. Trade just like a regular account just have to pay the $7 trade fee in and out. I luv it!!! Stocks, ETF's, Mutual Funds, bonds, and interest for cash.

I am a big fan of get the matching fund from TSP and max out the Roth.

 

[Bullitt]

Yeah, just don't go running to the hot stocks/sectors in the Trad IRA. Sounds like a bit much. Like John C. Bogle proclaims, "The greatest enemy of a good plan is the dream of a perfect plan." (Von Clausewitz').

 

[CountryBoy]

I max out mine and my wife's Roth thru Sharebuilder and put 5% into TSP. I'm happy with this arrangement.

CB

 

[EW_ret]

I read your question as should I increase my percentage contribution to the TSP, or open a traditional IRA. Is that right? Do you understand the ramifications of the traditional IRA? The contributions would not be tax-deferred, unless your income in below certain thresholds. Then you have to track the tax-deferred and taxable contributions yearly in your tax return. On the other hand you would have more choices in the traditional IRA compared the TSP. That is what appeals to you?

I always opted for the "keep it simple" approach and contributed the maximum I could the TSP. I do have a traditional IRA that was started in 1981 and then in 1986 the government changed the rules. When the government imposed income limits on traditional IRAs, I choose to not contribute taxable earnings to the traditional IRA. By then the TSP started and I could contribute tax-deferred earnings to this plan. I have not contributed one dime my traditional IRA since 1986. I converted some to my Roth in 1998. I'm thinking about converting the remainder to my Roth IRA over the next three years

 

[ChemEng]

I read your question as should I increase my percentage contribution to the TSP, or open a traditional IRA. Is that right?

That is exactly what I am trying to figure out.

Do you understand the ramifications of the traditional IRA?

Only what I have read online on irs.gov. Pub590 has all the info for IRAs, but it is a long and dry read. I probably need to reread through it to make sure I didnt miss anything important. Are there any tother references you would recommend?

The contributions would not be tax-deferred, unless your income in below certain thresholds.

Page 15 of Pub590 has the thresholds set as:

• <$75k--full deduction
• >$75k, <$85k--partial deduction
• >$85k--no deduction

Theres a chance we may fall in the first bucket, but Im about 90% sure that we are at least in the midrange area. This is just a guess as my taxable wages YTD have been $44k. Scaled to the rest of the year brings it to ~$59.5k. The wife worked half year, but at the ~$30k gross mark.

Then you have to track the tax-deferred and taxable contributions yearly in your tax return.

Is this information that is readily available through most online brokers? Its data that I already track with my budget, but it would probably not stand scrutiny.

On the other hand you would have more choices in the traditional IRA compared the TSP. That is what appeals to you?

The choices are the big reason I would move to an IRA over a TSP if the contributions are deductible. Otherwise I would stick with the TSP.

I always opted for the "keep it simple" approach and contributed the maximum I could the TSP. I do have a traditional IRA that was started in 1981 and then in 1986 the government changed the rules. When the government imposed income limits on traditional IRAs, I choose to not contribute taxable earnings to the traditional IRA. By then the TSP started and I could contribute tax-deferred earnings to this plan. I have not contributed one dime my traditional IRA since 1986. I converted some to my Roth in 1998. I'm thinking about converting the remainder to my Roth IRA over the next three years

I appreciate your help with helping me getting this straight EW.

 

[camper65]

Were can I get info about a Roth.?
Such as, are they liquid, can you cash out quickly if necessary!
What kind of investments do they involve? Can they be changed or are they fixed, time wise?
Etc.

Thanks!

 

[Show-me]

Were can I get info about a Roth.?
Such as, are they liquid, can you cash out quickly if necessary!
What kind of investments do they involve? Can they be changed or are they fixed, time wise?
Etc.

Thanks!

I believe you can not touch it for five years from when you open it, after that 59 1/2 years of age for distrabutions. You can invest in anything. Local bank have Roth CD's or you can open a brokerage account and invest in anything on the open market.

http://www.fairmark.com/rothira/roth101.htm

 

[alevin]

I do have a traditional IRA that was started in 1981 and then in 1986 the government changed the rules. When the government imposed income limits on traditional IRAs, I choose to not contribute taxable earnings to the traditional IRA. By then the TSP started and I could contribute tax-deferred earnings to this plan. I have not contributed one dime my traditional IRA since 1986. I converted some to my Roth in 1998. I'm thinking about converting the remainder to my Roth IRA over the next three years

Yow! I've got almost exactly same history! The last time I contributed even to non-deductible IRA was about the time I became a fed. I kept deductible IRA contributions and those earnings in separate mutual fund than the non-deductible and its earnings to help with record keeping. I rolled the non-deductible over to Roth a few years ago all at once, have been waiting for enough cash flow to convert the deductible IRA account over to Roth the next 2 years. Conversion calculations say its still worth it for me at this point. Then I will start stashing away in regular Roths after that's done.

 

[roskopfm]

Re: TSP, IRA, and Roth? YES THE ROTH!!!!!

I wish the TSP would get the wisdom to add a Roth Option to our funds. There are many of us in the lower tax brakets that would benefit more from a Roth. I for one expect to be in a higher tax bracket at retirement. Come on give us the ROTH TSP please.

 

[Show-me]

http://www.troweprice.com/common/in...26cg%3D920%26pgid%3D11769,00.html?rfpgid=7743