Should You Leave the TSP? Or Stay? | Christy Capital Management

[@boatlover1875]

I left for flexibility when the market was volatile particularly at the beginning of the pandemic. The TSP only allows a very few transfers per month. Even then, you have to make your election prior to noon for a "trade" that happens at the close several hours later. With free stock trades and fees very close to the low ones offered by the TSP I just didn't see the point anymore.

[@ChristyCapitalManagement]

I hope that this proves to be a great strategy for you!

[@chancerobinson5112]

After participating in the TSP since its inception, I would say that it’s too heavily weighted towards conservation of principal. In addition, the TSP, as an institution, is too conservative. The Roth IRA option was not part of the TSP for many years after it became available to the general public. By that time, I was so close to retirement it did not financial sense make sense to convert.

[@ChristyCapitalManagement]

Unfortunately, a lot of federal employees were close to retirement by the time Roth became an available option.

[@chancerobinson5112]

@@ChristyCapitalManagement Yes. I had to get my Roth in the private sector. Yet, I still think the TSP is a great option until you feel comfortable self-directing your investments. Few, too few, people realize you have to get your discretionary/disposable capital working for you, ASAP. Owning a home, and being debt free are necessary, but not sufficient, for financial security.

[@densnow4816]

In addition to the problem of strategizing tax treatment, keeping money in TSP also means the huge pain of getting notarized documents vis snail mail in order to start or change distributions. If your spouse is hard to track down, or you get charged hefty notary fees, staying in TSP becomes very onerous.

[@ChristyCapitalManagement]

That's an excellent point!

[@danraymond1755]

Very informative. Thanks

[@m.a.8425]

You have to set up your TSP IRA ROTH from the beginning. It will start off as IRA by befault. Later on you can change your payroll contributions but not the funds already in the tsp account.

[@ChristyCapitalManagement]

Also any government match will be paid into the traditional account.

[@priola7587]

Thanks. This topic is at the front of my mind. Why I’m considering leaving is that I am attracted to the 3 bucket method, the first bucket being very conservative to protect the funds I’ll want to withdraw in the next 2 to 5 (?) years, and enabling me to leave poorly performing funds alone to recover. But distributions from TSP come out equally from across ones entire account, so there’s no withdrawing from just one of the five funds. Otherwise, I’d stay in the TSP, because it’s done fairly well by me and I don’t want to get too complicated, or pay too much for management of just $400k. It’s not like I’m a tsp millionaire. Thoughts?

[@boatlover1875]

What's stopping you from just re-balancing your TSP after the withdrawal?

[@priola7587]

@@boatlover1875 well lack of confidence in what I know and don't.

[@ChristyCapitalManagement]

We would recommend that you speak to a trusted financial planner. Some people find that the fees are not as much of an issue as they thought they would be when they are also receiving professional advice and retirement planning out of it. Of course, this is only true when you work with a planner that puts your needs before his own. Many firms offer a free consultation to allow you to see if you think it would be a good fit.

[@alphacentauri7381]

I love TSP the only drawback that bothers me at this point is Inflation of Fake/ Fiat, funny money.

[@ChristyCapitalManagement]

I think we all have that fear to some extent.

[@b.williams3095]

I will be retiring this year at 57. Can I continue to contribute to the TSP until I am 59.5? Can I reallocate ?

[@ChristyCapitalManagement]

Once you leave the federal government, you'll no longer be able to make employee contributions. However, you can still change your investment mix, transfer eligible money into your account, and enjoy our low costs-all while your account continues to accrue earnings.

[@b.williams3095]

So, I can transfer money to my tsp from an outside account..? Can it be electronic ACH. Like from my bank account to tsp

[@Free-Thinker]

No reason for years to be in the G fund