How do you know it was a blanket statement without hearing knowing the callers specific situation? I always hear him tell people to invest in their tsp first to get the match.
+Richard Nawyn They do have low administration fees, no doubt. But, is the advantage of slightly lower admin fees worth the trade offs of limited investment funds, limited withdrawal options, and other issues. Those are things that I believe are important to look at.
+Richard Nawyn That and the fact that you can follow you plan on one screen and as soon as you hear or see a change for the negative, you can do an interfund transfer on the spot, without having to wait until your financial advisor answers the phone, or wakes up, depending on where in the world you are stationed.
+Jacqueline Strasser That's a good point, however, you can do the exact same outside of the TSP. You don't have to use a financial advisor, it's just an option in which you will pay a higher fee for.
+Jacqueline Strasser Generally if you "hear or see a change for the negative," that will already have been incorporated into the price of your shares and you will be solidifying a loss. That is why you generally should not tinker with your plans, especially in index/TSP funds when you can only move/buy/sell at the day's closing prices, unlike traditional stocks.
Holy $hit you are Coop from Garage Gym reviews! Randomly stumbled on this video but I've be watching your other channel for years. Didn't know you were a financial expert.
I retired 8 yrs ago and rolled over 1/2 of my TSP account to a traditional self directed IRA with an investment company after interviewing several. I did this to have the flexibility for withdrawals for single items, gifts or projects realizing the admin costs would be greater. Also investment options would be larger with the traditional IRA. The result to date is after making several withdrawals from my IRA, my IRA has grown at a quicker pace than my TSP account however I have kept 60% of my TSP account in the G fund. I'm sure that is the difference in performance. I have also rolled over part of my IRA account into a Roth IRA account during this time period before applying for Social Security. I have really appreciated the withdrawal and investment flexibility of the non-TSP accounts while leaving half in TSP for security and low admin costs.
That's great to hear and something that is said often! The TSP vs. IRA debate really comes down to price, but I am often of the opinion that you get what you pay for (to a certain extent.)
Dude you literally kept your tsp money in the worst possible place for growth. And now you're bragging about how your non tsp money is growing? Duhhhh. The g fund isn't built for growth. It is basically like holding all of your money in cash, but you get a little inflation protection.
I left federal service before and rolled over the TSP funds into an IRA. Then I later converted the IRA into a Roth IRA so the funds would grow tax-free until retirement. I would recommend that people plan for how much tax they are going to have to pay in the year they convert from a traditional IRA into a Roth IRA because that can be a large amount of money to have to pay.
This is where I am as a widow. I would like to transfer TSP to ROTH but am afraid it will mess with my ability to start social security survivor benefits.
Ramsey is crazy. I retire at the age of 50 at the end of this year and that TSP has made me 1.1 million in 29 years, I think I will leave it right where it is at!
I really doubt your only "418 rank-and-file federal employees..." number. I was "rank and file", and my TSP grew to $870,000 in my 30 year career by contributing as much as I was able. Including the fact that my first few years' contributions were pretty paltry. I don't think my situation is THAT unusual, and I'm no miser though I am pretty thrifty most of the time.
Hi Borderman, You will pay taxes on that $1.1M as you withdrawal. Ramsey's thoughts are to pay the taxes and convert to a Roth IRA where the contributions and earnings grow tax-free. This may not be feasible for you but for someone with a longer time horizon it might make sense.
I get a 5% match on my TSP from my employer. I'm giving not away free money. Also, a 10% penalty for withdrawing from TSP before age 59 1/2. That would be a terrible move.
True. A financial advisor would have to earn you more than what you can do on your own and what he's charging in admin fees. I'll stick with the TSP. Keep up the good work and keep up your research. Your thoughts are appreciated. You're providing a unique niche service for feds!
Good advice Cooper another important thing to consider is protection from judgements. The TSP is fully protected from judgements, while an IRA has a limit not sre what it is, but pretty low. Just this one point is enough not to move IMO
Good info at the time, but withdrawal rules from the TSP have changed now, becoming much more flexible. Ignore this and look for TSP information from September 2019 on before making any decisions. That’s when the TSP Modernization Act went into effect. The CARES act could affect some TSP participants, too.
Please make a video on how to fill out the form for monthly payments from tsp which I was told that the payments can get deposited in a conventional IRA. It's all rather confusing. Thank you.
I just recently retired from Federal Government and still have my TSP account. I am totally into real estate investing and currently have three properties. I make good passive income with those properties but I want to buy more. I know TSP does not allow me to use the funds for a 1031 exchange. So this is my main reason that I want to roll over to any 401k product, so I can use the 1031 exchange. Do you have any recommendations on which product will be the best for this? Thank you!
Thank you. Can I contribute over and above the match into Roth TSP only (government employee who already maxes out TSP match and Vanguard Roth)? Thank you in advance.
Is it possible to move a traditional TSP (tax deferred) to a Vanguard/Fidelity brokerage account in the hopes of then investing in a dividend paying stock? tax implications?
Don't do it. There are plenty of play options with interfund transfer possibilities. We play with our TSP and taking out any middle man is always the best option fee wise. We're talking TSP! Your hard earned military career savings. The different plans invest in plenty of diversified options. And, any financial advisor will just try to convince you that his/her fees are are more justified than the next financial advisors. Do your homework, and be your own financial advisor.
I think you're confused on what moving your TSP to an IRA looks like. You don't have to use a financial advisor. Many will because they enjoy having the advice of an expert as well as the help in creating financial plans which is highly undervalued. However, for those that aren't interested in that, there's many options with slightly higher fees that can be self-directed just like the TSP but with more fund and asset class options, withdrawal options and more. Also, any financial advisor who says their only benefit is lower fees is certainly not one you would want to use. This being said, for the person who views a slight difference in fees as the main factor for where to invest, the TSP is most likely your best option.
Jacqueline, I am fairly new to TSP. I have been at this current job less than 4 years. I think by default it is set to G fund. What do you recommend I invest in? I saw one video say invest 10% in G Fund and 90% in C Fund? Also what percentage did you start to invest at? I think I started small only at about 7%. Any help or guidance from anyone is appreciated. DW
DW, recommend you google "TSP Funds Explained" and read about each of the funds. One of the first hits is a PDF file that explains each of the TSP Funds. Which you choose is really up to you and based on your risk tolerance. G & F are bond funds (bonds are essentially loans, you are loaning your money to the govt or corporations)...low risk/low return...think 1-5%. C & S are stock funds...moderate risk/higher returns...think 6-12%. I is an international stock fund, probably the highest risk without necessarily producing very high returns (~4% over last 10 years), but some think you need to be invested internationally to be diversified, whereas I think most US large companies are globalized these days. If you do invest in stock funds, don't panic! You only lose if you sell. The market can and has gone down over 30% in a given year...in fact, it has happened 4 times in the past 90 years (last in 2008)...however, it historically averages ~10.6%. My advice, as long as you are a long term investor (10 years or more), take the risk to get the returns of the stock market (C & S). Over most 10 year periods, stocks will out-perform bond funds. And, it is necessary to take the risk if you truly want to retire. 'Rule of 72' is a rule-of-thumb that says approx. how long it will take your money to double, ie. if you get a bond return on investment (ROI) of say 3%, your money will double every 72/3 or 24 years...not good enough, whereas a stock return of say 8% will double every 9 years. You need to take the risk to get the returns necessary to truly retire. Use an investment calculator to try out what you would need to invest and at what ROI to meet your retirement goals. I know you want exact advice, but that is really dependent on your risk tolerance. Do your homework, get others' opinions. GL and hope this helps.
Cooper, thanks for your reply! I was aware of that detail and I was hoping that you'd make that distinction when you were letting people know about the matching funds. You would know better than most being a numbers guy that the devil is in the details! Please keep making your videos, many federal employees don't take the time to go through all this information on their own and I'm sure that a lot of people will be helped by you taking this time to put out this information on their options. It's a smaller group but if you could please make a video about the "special" rules for firefighters, police and air traffic controllers. Thanks again!
Something you might have missed: Withdrawal from the TSP has to take place as an equal percentage of whatever fund(s) you’re invested. An IRA allows you the flexibility to pull out of whichever fund you think is working better (or worse) than the others. You can “buy low and sell high” more readily.
So, after 20yrs service, I attempted contacting the illustrious TSP. My encounter with them was horrible to say the least. I had to verify myself "multiple time" only to be told they're not sure who I am and why I was contacting them. Even after sending multiple copies of legal documentation they performed poorly. Needless to say, I'm done with the TSP, second WORST government agency on the planet, the IRS takes first place. We, Americans citizens work to support an infrastructure of folks not supporting us. Why maintain the mediocre facade, such shenanigans ought to be called ridiculous as they are and be overruled by sensible folks. Vote them out without any leftover hands in the pot. Bring n trustworthy , honorable folks who has the courage to stand for right vs wrong.
The benefits of moving your money to an IRA comes when and how you withdraw the money. Of course I want money in bond markets for withdrawing in the near future, but I also want money in the stocks for long term growth. If the stock market goes down, I don't want to take money out at a loss. With the TSP you don't have the option of withdrawing from the fund you want, it is taken out equally.
If rolling your TSP over to an IRA are you subject to the 59 1/2 rule? I am retiring from the Postal Service at 56 with 31 years. Would I be wise to do a partial withdrawal to an IRA and leave some in TSP to generate an income? What if I need large sum of money for example college for children, will I be subjected to a 10% penalty from an IRA since Im not 59 1/2?
Not if you've met the minimum retirement age, which I believe you will based on your service. Your question however is one that is provides a personalized answer. If you'd like to discuss some more of the details feel free to shoot me an email at: cooper@fedretirementplanning.com
Im 41 and have a tradtional TSP. I plan on working 16 more years God willing. Should i just keep growing my current balance (15% of income) or roll it all over now to a roth tsp or roth ira?
Thanks for the info. I recently came across your channel and I really enjoy the info you provide regarding federal retirement. Would a benefit of rolling your ROTH TSP into a ROTH IRA give you the flexibility to withdraw funds prior to 59 1/2 tax free and penalty free assuming you have already met the 5 year obligation for the ROTH IRA?
+Donald Smith Thanks for the kind words Donald. This is a great question, you can withdraw your CONTRIBUTIONS prior to 59 1/2 after you've met the 5 year period, however, you must wait till 59 1/2 to withdrawal any interest or earnings. I wrote a pretty in depth article on this subject here if you're interested: www.fedretirementplanning.com/roth-tsp-vs-roth-ira-showdown/
Does anyone know how to file a complaint against TSP for Failure to freeze TSP account during divorce court order? They were in violation of a court order. TSP allowed EX to withdraw all funds after the Court Order was rendered.
Was the order properly filed with the TSP? If not, you may be out. If so, You may have a course of action against TSP? Suggest you consult an attorney experienced with TSP divorce matters.
Because of the money being his, he deserved to withdraw the entire amount. Greedy, bitter exes always think they're entitled to something they didn't work for. So many women like to proclaim how independent they are but always like to have their sticky fingers in the pie.
Cooper, yet again your info is solid. I've heard rumblings about the TSP governing bored..er board :) (I forget the acronym) released a statement about evaluating increasing the number of withdrawal options from TSP? Do you think this is likely? My only motive to transfer out of TSP ...is the flexibility in withdrawal options..and not so much the options...Any insight you can provide would be appreciated. Thanks!
I get asked this quite a bit. At this point, that's all that's been said. However, I will say that if withdrawal options are increased, the cost to invest in the TSP will probably increase.
Before blanket statements are made comparing Roth to Regular TSP you must know EXACTLY how the state you work in now taxes the pension of a federal civil servant. Approx. 9 states that normally have income taxes (e.g. NY and PA) consider the TSP "part of" their civil servants pension and DO NOT tax it on withdrawal in retirement. This is significant because if you work in one of these states (and assuming you will retire there) and contribute to the regular TSP - you can escape state taxes altogether (which are not insignificant in states like NY) by contributing to the regular TSP. As unbelievable as it seems the money is not state taxed going into the regular TSP AND it is not state taxed when withdrawn as it is considered "part of" the civil servants pension in these states. However - if you contribute to the Roth TSP - you will pay state taxes on the money going in. Everything else being equal- you are actually losing money by contributing to the Roth TSP instead of the regular TSP in these states. If you roll your TSP into an IRA (and you live in one of these 9 states like NY or PA for example) - you just made a HUGE mistake!! You will now pay states taxes on the money whereas before you would not as it was treated part of your civil servants pension and thus tax free. Do your homework please.
Can anyone clarify how the TSP withdrawal limits impact the IRS "mandatory minimum withdrawal", imposed at age 70 1/2? As an annual requirement, if regarded as a "partial withdrawal" under TSP, in year two following meeting the 70 1/2 threshold, the "one partial/one full" withdrawal rule forces one completely out of TSP (notwithstanding the annuity option). Is that a correct interpretation? Thanks, in advance, for any clarification ...
So I'm 21 about to get out of the military I have almost ten grand in the tap 50% c and 50% s fund I'm not sure if I should just leave it there and let it grow and start a new retirement or roll it over ant advice?
I plan on transferring about half of my TSP to a Traditional IRA for personal investing and diversity. I use The Oxford Club for advice. The remaining half will stay in the L-Income fund to make my monthly House & Utility payments. After that, my pension should pay for Food & Entertainment.
I've never heard of The Oxford Club but did a small amount of research. I'd suggest making sure they're acting in your best interest, the reviews online aren't all positive.
...ever heard of the Good News Channel? Me neither.I have used their investment advice for about 2 years and have done well. It's simple enough just signing up for their free newsletter to see where their coming from.
Is there a limit to how many times I can rollover Ira ? Say for example, I have a lump sum from a defined benefit plan to put in an IRA to start my pension, however I may later want to invest in multiple products. Can I then rollover these divided funds without being taxed?
Good question. Here is the IRS' ruling: Beginning after January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.The one-per year limit does not apply to:rollovers from traditional IRAs to Roth IRAs (conversions)trustee-to-trustee transfers to another IRAIRA-to-plan rolloversplan-to-IRA rolloversplan-to-plan rollovers You can read more on it here: www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions
Talked with a lot of banks about IRAs. I found out if you do not understand the markets it is best to take a managed investment plan. I have been taking a monthly payment which can be adjusted at any time and they have been keeping the account even. There is a low maintenance fee of 1 percent but they are making me enough money to keep it even. To have my money last for my retirement. There was only one bank that I found to have my interests met and so far it is working.
For me there is no reason to keep my money in the TSP. I pay no fees for my IRA and I can take as much or little money as I want as many times as I want. With a couple of moves on my computer I can have the money electronically transferred to my checking account. In a TSP I need a notary and fill out forms to get access. I'm sure they make the rollover process a nightmare so you leave the money in the TSP but, I believe my patience will be rewarded once it's done.
@@soongpark683 i didn't say that. everyone's circumstances are different. it seem's as though english is not your first language. but i'll try to clear my thinking for you. C and S fund are good for GROWING money. IF you are near retiring, they are too risky. so, when you are 20, 10, and 5 years approaching retirement you should be locking in gains by switching to bonds or maybe the g fund slowly. if you are in the TSP then you should have resources to help you through work programs, especially military. please seek some out and get personalized advice from multiple qualified sources....not some dude on in youtube comments section (like me). but i will say, if you are early on in your investing, save aggressively into TSP, especially the C and S funds. I wish I had. also, just a curiosity, do you have korean heritage? cheers!
Thank you. this was informative. In another youtube video (Roth IRA vs ROTH TSP), you mentioned that the ROTH TSP is taxed just like social security when you start taking it out. Whereas you said that the a traditional ROTH IRA is not taxed like social security. So, would you not consider rolling it out of TSP to a ROTH IRA to avoid being taxed on those funds? The only thing thing you would have to keep in mind is the administrative/maintance fees of the traditional ROTH IRA. This seems confusing.
The TSP Roth's income is added to the PIT calculation to determine how much tax you pay of your Social Security. A Roth IRA does not have to be included. I hope that clears things up!
This this an old video so things have changed. I am in the process of moving my TSP to Vanguard. During the Pandemeic, me being somewhat conservative left some on the table. I saw what was coming and pulled out of stocks just in time and didn't lose anything but missed out on the upside. The real problem as a retiree especially is that you have to make a decision before noon regarding the the market at the end of the day which was scary last year. Had my money been in an IRA Vanguard/Fidelity etc... this could have been a real world scenario limiting risk. As a young employee let it ride. Additionally you can purchase stocks without costs. ETFs have low costs similar to TSP.
All these comments are is hate for Dave Ramsey. Why should anyone trust You. When you get your own radio show, write a system, (The Babysteps) have over 6 plus million people become debt free and the start teaching others how to do that, when you stop using credit cards and pay cash for everything for 30 years, then, I might respect your opinion. I became debt free this year in May 2021, which means I don't get debt bills every month now. I also have 5 month emergency fund saved and I now have a Roth IRA, and for the first time seeing money grow, and I still work, because I'm still breathing. So rather that putting a video out that encourages people to bash and mock other, have the heart of a teacher as Dave always encourages, seek wise counsel as Dave always says, and never invest in Anything you don't understand. I hope you've grown up more as a financial advisor, with a humble heart.
Solid advice. Watch your own video and make some adjustments. - WAIT! New edit. Watched your later videos. Much better, with good edits, lots of verve, and little wasted verbiage. Also, now (later than this video) BOTH of the advantages of Ramsey’s that you cite are taken care of. Way to go, TSP!
Can I move my tsp to an Ira if I’m only 36? Isn’t there restrictions and huge penalties a partial hardship withdrawal Or a full withdrawal if you no longer work for government.. I can’t just take 60k out and put it in an ira and start buying stocks correct? Why can no one answer this question?
If you want to retire early..withdrawing can be great for executing a Roth IRA conversion ladder...its not all bad to take out if you have a plan and know how to leverage tax code to access your money when your 45....which the TSP won't let you do
I served one term in the AF and can no longer deposit to the TSP (G FUND). Its not a substantial amount under 10k. Not sure if i just leave it or withdraw it and add it to my other savings. Any ideas? I'm 29.
Without knowing more, I can't provide a recommendation. But, if you can't put it in the TSP, it sounds like your only option for saving it is to put it elsewhere.
Hang onto your TSP! I made a terrible mistake and rolled my TSP over into an IRA. Much higher expense ratio, first of all. 2nd, if you've done one term in the service, chances are you're young and will be working at other companies in the future. In general, for example, let's say you are working at company A and contributing to a 401K. Then, as life has it, you see a better career opportunity and you decide to work at company B. NOW, what are you going to do with the 401k from company A? If you kept your TSP, you can roll that 401k into your TSP. TSP is a great financial tool to keep in your retirement investment toolbox! Hope this makes sense. I teach service members on a daily basis, and am reminded of the mistake I made all the time. Hope this helps!
+Cub Scouts Pack 71 The statement Dave Ramsey gave was on the TSP in general. However, if you're interested on some of the differences between the TSP Roth and a Roth IRA, I made this video that may be of help: ua-cam.com/video/ULffYXWqLek/v-deo.html
Can I move my entire tsp to an Ira at any age? I’ve got 13 years in.. I’m still young I wouldn’t mind rolling it over to an ira, buying gold and silver and various equities.. wipe the slate clean and start my tsp from 0 but then continuing to contribute to my tsp for the next 30 years? Can I do that?
Do some research into this, and don't take my word, BUT: I am fairly certain that you can. You'd most likely do a partial rollover, not a complete one. Reason being is because I've heard that you must have a minimum of $500 in the TSP for it to remain active; otherwise, it'll probably be closed out. The TSP Web site should have all this information, but if not, give them a call as they're pretty helpful. Good luck!
Really Great advice THANKS I am now 72. WHEN i took a $50k from my TSP they took $10k out of that for taxes(?) Was that correct? Was I in error to think there was a 1- time non-taxed withdrawal? Also, with the Economy going in the toilet I’m considering transferring to a Gold IRA. Is this wise due to the Failed Government Leadership we are collectively suffering from? Seems a huge CRASH is imminent.
I am currently 55 and on fed disability retirement. Can I start my monthly annuity payouts without the 10% early withdrawal penalty? And will it offset my ssdi? Thanks for your reply!
I'm not retired yet but I'm getting close. I'm a very nervous investor and I'm very cheap so I don't want to pay anyone to manage my money. I even changed my TSP to straight G fund before BREXIT and although my balance fell $12,000 in two days, I've gotten it all back and more. So although TSP lacks flexibility, it's cheap and it's effective.
He wasn't invested in the G fund BEFORE Brexit, he SWITCHED to the G fund BEFORE for protection in case of losses, If he left it in his other funds he would have lost more than 12,000
When there is trouble such as Brexit or tarrifs is the best time to invest. Look at Balanced funds if your worried about market volatility. 60% stocks and 40% Bonds is still a great strategy. You wont make as much as a 100% stock only account but you wont lose 40% either in fact many funds such as the 60/40 make money when everyone loses. Look at Vanguard.
In case you haven't noticed, the money you keep in TSP is actually managed by yourself. Blackrock is just a custodian. They do nothing but accounting your money and reporting. They make no decisions on where your money is invested in; except those L Funds which the management process is minimal. I don't put my money in any of the L Funds. Only mostly C, S, somtimes I funds. Having said that, an identical approach to TSP is an IRA account self-managed at TD Ameritrade has NO fees unless you let them actively manage it. So, there you have it. You can let your IRA account idle like sitting in the G Fund, or invest in SPY (your C fund), or Willshire 4500 (your S fund), or EFA (your I fund). I personally would just keep my money into the SPY, QQQ, and DIA, and let it run just like TSP. And have full access to it when bad news happen. And you can do things like selling covered calls and puts all week long; something TSP will not allow you to do. Back to the benefits of keeping money in TSP, please give us better reasons.
Individual needs or that of family, age, and many factors come into play. My thought is diversification is key so TSP could fit into this with additional savings in short term CD, money market and savings plans and longer term of annuities or IRAs. Personally, two positive TSP factors for me are minimal fees that saves tens of thousands of dollars over the life of the funds compared to investment firms (Waddell & Reed, Edward Jones, Ameriprise and others) and the ability to personally change investment strategy monthly based on the market and long term needs (even intrafund transfers ability after leaving military service). I wouldn't advise putting all your investment savings in a TSP but 1/3 to 1/2, sure works for me.... I've surpassed my other two major investment savings plans with TSP (both the others are with major investment firms for a Roth IRA and annuity).
I think the real deal in this conversation is how savvy are you with investing. If not at all, maybe staying with the TSP is good. I just moved right at 1M to a Vanguard IRA. The issue is it goes into a settlement account, do you want to just dump this into stock funds at historic highs with potential barriers on the horizon like inflation etc... all at once? Scary stuff. I'm fairly conservative. Will probably trickle it in on 1% drops into high dividend yield high quality type funds. Give me a 20% correction, I'd be big in with the rest.
I am in TSP and I use my monthly moves to catch the lows and jump out after making a good gain. My PIP (personal investment profit) have been between the 8-13% range for the past few years. I actually received a certified letter several years back telling me to quit day trading my TSP or they were going to put me to paper transfers only. At that time I had very high profits. I would wait for market to dip a few percent and jump in for 1-1.5% gain and get out and wait for the next drop.
This is so silly. If they don't want people day trading in their TSP, they should make it impossible to do so. That said, if somebody would like to take the risk, let them, it's their money.
Where did Ramsey earn his MBA and PhD? Nowhere, he has no such education. Some of what Ramsey says about reducing debt is great, but his TSP comments were bad (as your video noted).
You do realize most of the greatest investors in the world do not have MBAs or PhDs right? You may want to check that out. Soros: philosophy. Icahn: drop-out. Zuckerburg: drop-out; etc
Thank you for your helpful advice. I recently retired from the US Postal Service and have been advised by FEFA to roll the TSP into an IRA. Luckily I am a member of a FCU that has a great IRA and I wanted to do it anyway.
If you are going to roll your TSP to anIRA (I don't recommend), make sure you leave some money in your TSP account (does not have to be that much). Once you take you money out of the TSP you can never get back in.
If your IRA is in a Federal Credit Union, it's very likely that your rate of return is near zero. Banks and Credit Unions are a safe place to have one's IRA, but your returns will be dismal.
"You can get a better return _IF_ you do your research". You are labeling his advise as "blanket", whatever that means. The fact is that he is making a CONDITIONAL advise, not a blanket one. I am sure he will advise against it if he knows the person will not do the proper research and become knowledgeable, or is simply someone who lacks any financial sense. That is why he has all those recommended providers.
+Josue Nieves Thanks for your opinion! A blanket statement is one that doesn't factor in the unique individual characteristics of the people mentioned in the statement. For example, "Everyone reading this should run 5 miles a day." That doesn't make a lot of sense because there's some people who certainly should not run 5 miles and there's others that should run more. I was simply giving my take on Dave Ramsey's statement and prefaced it by saying that due to Dave's show, that is how he has to give his advice. Keep commenting though, I appreciate alternative viewpoints!
(I am a subscriber That enjoys your video's) I am current out of the military. Is there a way to continue investing in the TSP, without being a FED employee?
Dave gave best, concise answer for most people, IF you do the research. That research could be very time consuming. TSP's greatest advantage is invested makes one decision one time, and forget about it until later, or even until retired. Convenience. It costs opportunity loss, but prevents loss due to indecision, ignorance or procrastination.
Is this an official fed channel? I just watched two videos and have to wonder why this video is monetized if it's part of TSP.gov (I was sent to this channel from there).
This is not an official fed channel. I have no affiliation with the federal government. Do you have the link that forwarded you here? This is the first I've heard of them linking to my channel.
Risk tolerance is the same regardless of whether it's inside and outside the TSP. The only real benefit of the TSP (after retirement) is the low cost of overhead. The benefits of moving it out are many. Dave knows that there are funds out there that double the S&P rates of returns (if that's where your invested) with modest overhead costs.
This video is outdated; please go to TSP4gov to get the most recent changes, including maintenance fees (0.39c/0.40c per thousand), installment options, etc.
Can we please stop listing access to your retirement funds, when you are not in retirement, as a plus? It is a retirement account. It's supposed to be used for retirement. You should have money to pay for your roof and other emergencies. Also, you could do a tsp loan at ridiculously low interest rates to pay for the roof as well. You pay yourself back, not the bank, and you don't kill your retirement. That being said, the TSP is good place to start. You can definitely get better returns in other places. You have to know your stuff. I personally believe that too many choices leave people immobilized. Analysis paralysis. I do it all. traditional and Roth tsp, Roth IRA, non tax advantaged brokerage account.
Ramsey also bases his financial advice on religious doctrine. He is against anyone utilizing bankruptcy as a financial strategy, because biblically you should pay off your debts. Funny, since he has used bankruptcy in the past, and there should be no difference in personal and business debt, which is what he has had. Makes no sense to not take advantage of all avenues and tax laws.
When you are investing in aggresive growth funds such as C, S, and I and the market tanks, you are in the same damn boat just like anyone else. This is a very very bad argument about staying in TSP. On the other hand, in an IRA, you can still put your money into the indices identical to C fund, S fund, and I fund if you want. Exposure to the market volatility is exactly the same. YET, with an IRA, you are not limited to 2 trades a month and trades become effective on the fly. Not at the end of the day. I am not encouraging you to become a day trader with an IRA account. But the freedom does allow you to respond to an adverse market condition that TSP ties your hands behind your back.
If you move your money out of the TSP (from the traditional) and into an outside IRA you are forfeiting free money (the matching funds you would’ve received from your employer); also, you'e paying much higher fees in your IRA since the TSP is widely known for its lower fees. So no....I wouldn't move out of the TSP!
@@ozneroll2132 the balance in the TSP account already got the matching. You only move that amount. As long as you work and contribute to TSP, you will continue to get the matching.
@@ozneroll2132 the matching was already done when you contribute. But to make myself clearer, you can only roll your money to an IRA when you turn 59 1/2. You cannot do that at younger age.
Dave Ramseys net worth is $55000000. If all his money Is in the large caps and the SnP goes down 90% he will still is be a multi millionaire. As far as investing, he is out of touch with us common folk. Though it is a good idea to get and stay out of dept, the common government worker needs a solid base like a portion in the G fund to cover basic needs in case the market free falls. Sorry Dave, not a hater just a realistic thinker. 20% base in G, 5% in f, 15% in s, 5% in I, 55% in c fund.
This past year was booming for the stock market. How then am I getting a negative return on my TSP? All of the funds are doing terrible. Get out of the TSP
Good points, thanks for correcting Ramsey's blanket statement.
+David Johnson Thank you David!
How do you know it was a blanket statement without hearing knowing the callers specific situation?
I always hear him tell people to invest in their tsp first to get the match.
Biggest reason to stay in TSP is lowest admin fees
+Richard Nawyn They do have low administration fees, no doubt. But, is the advantage of slightly lower admin fees worth the trade offs of limited investment funds, limited withdrawal options, and other issues. Those are things that I believe are important to look at.
+Richard Nawyn That and the fact that you can follow you plan on one screen and as soon as you hear or see a change for the negative, you can do an interfund transfer on the spot, without having to wait until your financial advisor answers the phone, or wakes up, depending on where in the world you are stationed.
+Jacqueline Strasser That's a good point, however, you can do the exact same outside of the TSP. You don't have to use a financial advisor, it's just an option in which you will pay a higher fee for.
+Jacqueline Strasser Generally if you "hear or see a change for the negative," that will already have been incorporated into the price of your shares and you will be solidifying a loss. That is why you generally should not tinker with your plans, especially in index/TSP funds when you can only move/buy/sell at the day's closing prices, unlike traditional stocks.
Vanguard fees on their Admiral funds can be comparable. C Fund is 0.041%; Vanguard Total Stock Admiral VTSAX is 0.04%.
Might want to update this video. The withdrawal options have changed.
Holy $hit you are Coop from Garage Gym reviews! Randomly stumbled on this video but I've be watching your other channel for years. Didn't know you were a financial expert.
I retired 8 yrs ago and rolled over 1/2 of my TSP account to a traditional self directed IRA with an investment company after interviewing several. I did this to have the flexibility for withdrawals for single items, gifts or projects realizing the admin costs would be greater. Also investment options would be larger with the traditional IRA. The result to date is after making several withdrawals from my IRA, my IRA has grown at a quicker pace than my TSP account however I have kept 60% of my TSP account in the G fund. I'm sure that is the difference in performance. I have also rolled over part of my IRA account into a Roth IRA account during this time period before applying for Social Security. I have really appreciated the withdrawal and investment flexibility of the non-TSP accounts while leaving half in TSP for security and low admin costs.
That's great to hear and something that is said often! The TSP vs. IRA debate really comes down to price, but I am often of the opinion that you get what you pay for (to a certain extent.)
I think your move makes sense until the TSP modernization is implemented...
Dude you literally kept your tsp money in the worst possible place for growth. And now you're bragging about how your non tsp money is growing? Duhhhh. The g fund isn't built for growth. It is basically like holding all of your money in cash, but you get a little inflation protection.
@@ineedhoez He is retired so he was not being risky
I left federal service before and rolled over the TSP funds into an IRA. Then I later converted the IRA into a Roth IRA so the funds would grow tax-free until retirement. I would recommend that people plan for how much tax they are going to have to pay in the year they convert from a traditional IRA into a Roth IRA because that can be a large amount of money to have to pay.
You don't have to convert the full amount at one time.
This is where I am as a widow. I would like to transfer TSP to ROTH but am afraid it will mess with my ability to start social security survivor benefits.
Ramsey is crazy. I retire at the age of 50 at the end of this year and that TSP has made me 1.1 million in 29 years, I think I will leave it right where it is at!
Hi, I just started my TSP not long ago. Do you mind I ask which fund did you invested in to make that much? I have my in S fund/small business.
I really doubt your only "418 rank-and-file federal employees..." number. I was "rank and file", and my TSP grew to $870,000 in my 30 year career by contributing as much as I was able. Including the fact that my first few years' contributions were pretty paltry.
I don't think my situation is THAT unusual, and I'm no miser though I am pretty thrifty most of the time.
Hi Borderman, You will pay taxes on that $1.1M as you withdrawal. Ramsey's thoughts are to pay the taxes and convert to a Roth IRA where the contributions and earnings grow tax-free. This may not be feasible for you but for someone with a longer time horizon it might make sense.
Im envious. You already have 1.1 million just from the TSP!
How were you invested in the TSP?
I get a 5% match on my TSP from my employer. I'm giving not away free money. Also, a 10% penalty for withdrawing from TSP before age 59 1/2. That would be a terrible move.
Should I use my TSP to pay off my mortgage?
In other words, is it wise to do that?
True. A financial advisor would have to earn you more than what you can do on your own and what he's charging in admin fees. I'll stick with the TSP. Keep up the good work and keep up your research. Your thoughts are appreciated. You're providing a unique niche service for feds!
+Richard Nawyn Thank you Richard!
That’s dumb
Good advice Cooper another important thing to consider is protection from judgements. The TSP is fully protected from judgements, while an IRA has a limit not sre what it is, but pretty low. Just this one point is enough not to move IMO
That's a good point, however, for most people I don't think that's as much of a consideration.
Good stuff .... This needs to be updated.. starting in September you’ll be able to take out more than once.. four times, if I recall correctly.
You are to make different amounts withdrawals. Every month
Good info at the time, but withdrawal rules from the TSP have changed now, becoming much more flexible. Ignore this and look for TSP information from September 2019 on before making any decisions. That’s when the TSP Modernization Act went into effect. The CARES act could affect some TSP participants, too.
What form do I use to transfer from tsp to Roth IRA
Please make a video on how to fill out the form for monthly payments from tsp which I was told that the payments can get deposited in a conventional IRA. It's all rather confusing. Thank you.
I just recently retired from Federal Government and still have my TSP account. I am totally into real estate investing and currently have three properties. I make good passive income with those properties but I want to buy more. I know TSP does not allow me to use the funds for a 1031 exchange. So this is my main reason that I want to roll over to any 401k product, so I can use the 1031 exchange. Do you have any recommendations on which product will be the best for this? Thank you!
Thank you. Can I contribute over and above the match into Roth TSP only (government employee who already maxes out TSP match and Vanguard Roth)? Thank you in advance.
Is it possible to move a traditional TSP (tax deferred) to a Vanguard/Fidelity brokerage account in the hopes of then investing in a dividend paying stock? tax implications?
Don't do it. There are plenty of play options with interfund transfer possibilities. We play with our TSP and taking out any middle man is always the best option fee wise. We're talking TSP! Your hard earned military career savings. The different plans invest in plenty of diversified options. And, any financial advisor will just try to convince you that his/her fees are are more justified than the next financial advisors. Do your homework, and be your own financial advisor.
I think you're confused on what moving your TSP to an IRA looks like. You don't have to use a financial advisor. Many will because they enjoy having the advice of an expert as well as the help in creating financial plans which is highly undervalued. However, for those that aren't interested in that, there's many options with slightly higher fees that can be self-directed just like the TSP but with more fund and asset class options, withdrawal options and more. Also, any financial advisor who says their only benefit is lower fees is certainly not one you would want to use. This being said, for the person who views a slight difference in fees as the main factor for where to invest, the TSP is most likely your best option.
But who will give you 10 to 18% return? Other than the TSP
Jacqueline, I am fairly new to TSP. I have been at this current job less than 4 years. I think by default it is set to G fund. What do you recommend I invest in? I saw one video say invest 10% in G Fund and 90% in C Fund? Also what percentage did you start to invest at? I think I started small only at about 7%. Any help or guidance from anyone is appreciated.
DW
DW, recommend you google "TSP Funds Explained" and read about each of the funds. One of the first hits is a PDF file that explains each of the TSP Funds. Which you choose is really up to you and based on your risk tolerance. G & F are bond funds (bonds are essentially loans, you are loaning your money to the govt or corporations)...low risk/low return...think 1-5%. C & S are stock funds...moderate risk/higher returns...think 6-12%. I is an international stock fund, probably the highest risk without necessarily producing very high returns (~4% over last 10 years), but some think you need to be invested internationally to be diversified, whereas I think most US large companies are globalized these days. If you do invest in stock funds, don't panic! You only lose if you sell. The market can and has gone down over 30% in a given year...in fact, it has happened 4 times in the past 90 years (last in 2008)...however, it historically averages ~10.6%.
My advice, as long as you are a long term investor (10 years or more), take the risk to get the returns of the stock market (C & S). Over most 10 year periods, stocks will out-perform bond funds. And, it is necessary to take the risk if you truly want to retire. 'Rule of 72' is a rule-of-thumb that says approx. how long it will take your money to double, ie. if you get a bond return on investment (ROI) of say 3%, your money will double every 72/3 or 24 years...not good enough, whereas a stock return of say 8% will double every 9 years. You need to take the risk to get the returns necessary to truly retire. Use an investment calculator to try out what you would need to invest and at what ROI to meet your retirement goals.
I know you want exact advice, but that is really dependent on your risk tolerance. Do your homework, get others' opinions. GL and hope this helps.
Cooper, thanks for your reply! I was aware of that detail and I was hoping that you'd make that distinction when you were letting people know about the matching funds. You would know better than most being a numbers guy that the devil is in the details! Please keep making your videos, many federal employees don't take the time to go through all this information on their own and I'm sure that a lot of people will be helped by you taking this time to put out this information on their options. It's a smaller group but if you could please make a video about the "special" rules for firefighters, police and air traffic controllers. Thanks again!
That's a great idea for a video, thank you!
Something you might have missed: Withdrawal from the TSP has to take place as an equal percentage of whatever fund(s) you’re invested. An IRA allows you the flexibility to pull out of whichever fund you think is working better (or worse) than the others. You can “buy low and sell high” more readily.
So, after 20yrs service, I attempted contacting the illustrious TSP. My encounter with them was horrible to say the least. I had to verify myself "multiple time" only to be told they're not sure who I am and why I was contacting them. Even after sending multiple copies of legal documentation they performed poorly. Needless to say, I'm done with the TSP, second WORST government agency on the planet, the IRS takes first place. We, Americans citizens work to support an infrastructure of folks not supporting us. Why maintain the mediocre facade, such shenanigans ought to be called ridiculous as they are and be overruled by sensible folks. Vote them out without any leftover hands in the pot. Bring n trustworthy , honorable folks who has the courage to stand for right vs wrong.
The benefits of moving your money to an IRA comes when and how you withdraw the money. Of course I want money in bond markets for withdrawing in the near future, but I also want money in the stocks for long term growth. If the stock market goes down, I don't want to take money out at a loss. With the TSP you don't have the option of withdrawing from the fund you want, it is taken out equally.
Very true!
If rolling your TSP over to an IRA are you subject to the 59 1/2 rule? I am retiring from the Postal Service at 56 with 31 years. Would I be wise to do a partial withdrawal to an IRA and leave some in TSP to generate an income? What if I need large sum of money for example college for children, will I be subjected to a 10% penalty from an IRA since Im not 59 1/2?
Not if you've met the minimum retirement age, which I believe you will based on your service. Your question however is one that is provides a personalized answer. If you'd like to discuss some more of the details feel free to shoot me an email at: cooper@fedretirementplanning.com
thanks will b listening for more videos like this.
Im 41 and have a tradtional TSP. I plan on working 16 more years God willing. Should i just keep growing my current balance (15% of income) or roll it all over now to a roth tsp or roth ira?
Thanks for the info. I recently came across your channel and I really enjoy the info you provide regarding federal retirement. Would a benefit of rolling your ROTH TSP into a ROTH IRA give you the flexibility to withdraw funds prior to 59 1/2 tax free and penalty free assuming you have already met the 5 year obligation for the ROTH IRA?
+Donald Smith Thanks for the kind words Donald. This is a great question, you can withdraw your CONTRIBUTIONS prior to 59 1/2 after you've met the 5 year period, however, you must wait till 59 1/2 to withdrawal any interest or earnings. I wrote a pretty in depth article on this subject here if you're interested: www.fedretirementplanning.com/roth-tsp-vs-roth-ira-showdown/
Does anyone know how to file a complaint against TSP for Failure to freeze TSP account during divorce court order? They were in violation of a court order. TSP allowed EX to withdraw all funds after the Court Order was rendered.
Was the order properly filed with the TSP? If not, you may be out. If so, You may have a course of action against TSP? Suggest you consult an attorney experienced with TSP divorce matters.
Because of the money being his, he deserved to withdraw the entire amount. Greedy, bitter exes always think they're entitled to something they didn't work for. So many women like to proclaim how independent they are but always like to have their sticky fingers in the pie.
You ex forged your signature or lied and said they were not married. If you are married, the withdrawal forms has to be notarized.
Cooper, yet again your info is solid. I've heard rumblings about the TSP governing bored..er board :) (I forget the acronym) released a statement about evaluating increasing the number of withdrawal options from TSP? Do you think this is likely? My only motive to transfer out of TSP ...is the flexibility in withdrawal options..and not so much the options...Any insight you can provide would be appreciated. Thanks!
I get asked this quite a bit. At this point, that's all that's been said. However, I will say that if withdrawal options are increased, the cost to invest in the TSP will probably increase.
Before blanket statements are made comparing Roth to Regular TSP you must know EXACTLY how the state you work in now taxes the pension of a federal civil servant. Approx. 9 states that normally have income taxes (e.g. NY and PA) consider the TSP "part of" their civil servants pension and DO NOT tax it on withdrawal in retirement. This is significant because if you work in one of these states (and assuming you will retire there) and contribute to the regular TSP - you can escape state taxes altogether (which are not insignificant in states like NY) by contributing to the regular TSP. As unbelievable as it seems the money is not state taxed going into the regular TSP AND it is not state taxed when withdrawn as it is considered "part of" the civil servants pension in these states. However - if you contribute to the Roth TSP - you will pay state taxes on the money going in. Everything else being equal- you are actually losing money by contributing to the Roth TSP instead of the regular TSP in these states. If you roll your TSP into an IRA (and you live in one of these 9 states like NY or PA for example) - you just made a HUGE mistake!! You will now pay states taxes on the money whereas before you would not as it was treated part of your civil servants pension and thus tax free. Do your homework please.
Excellent analysis.
Can anyone clarify how the TSP withdrawal limits impact the IRS "mandatory minimum withdrawal", imposed at age 70 1/2? As an annual requirement, if regarded as a "partial withdrawal" under TSP, in year two following meeting the 70 1/2 threshold, the "one partial/one full" withdrawal rule forces one completely out of TSP (notwithstanding the annuity option). Is that a correct interpretation? Thanks, in advance, for any clarification ...
So I'm 21 about to get out of the military I have almost ten grand in the tap 50% c and 50% s fund I'm not sure if I should just leave it there and let it grow and start a new retirement or roll it over ant advice?
I plan on transferring about half of my TSP to a Traditional IRA for personal investing and diversity. I use The Oxford Club for advice. The remaining half will stay in the L-Income fund to make my monthly House & Utility payments. After that, my pension should pay for Food & Entertainment.
I've never heard of The Oxford Club but did a small amount of research. I'd suggest making sure they're acting in your best interest, the reviews online aren't all positive.
...ever heard of the Good News Channel? Me neither.I have used their investment advice for about 2 years and have done well. It's simple enough just signing up for their free newsletter to see where their coming from.
Can I do this if I’m only 35? Or is this a move you can only do when you retire?
Is there a limit to how many times I can rollover Ira ? Say for example, I have a lump sum from a defined benefit plan to put in an IRA to start my pension, however I may later want to invest in multiple products. Can I then rollover these divided funds without being taxed?
Good question.
Here is the IRS' ruling:
Beginning after January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.The one-per year limit does not apply to:rollovers from traditional IRAs to Roth IRAs (conversions)trustee-to-trustee transfers to another IRAIRA-to-plan rolloversplan-to-IRA rolloversplan-to-plan rollovers
You can read more on it here: www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions
Talked with a lot of banks about IRAs. I found out if you do not understand the markets it is best to take a managed investment plan. I have been taking a monthly payment which can be adjusted at any time and they have been keeping the account even. There is a low maintenance fee of 1 percent but they are making me enough money to keep it even. To have my money last for my retirement. There was only one bank that I found to have my interests met and so far it is working.
Glad to hear you've found something that works for you!
For me there is no reason to keep my money in the TSP. I pay no fees for my IRA and I can take as much or little money as I want as many times as I want. With a couple of moves on my computer I can have the money electronically transferred to my checking account. In a TSP I need a notary and fill out forms to get access. I'm sure they make the rollover process a nightmare so you leave the money in the TSP but, I believe my patience will be rewarded once it's done.
is there a way to change your traditional TSP from before Roth was available into a Roth TSP and just pay the tax?
You can transfer the TSP to a Roth IRA, but not a Roth TSP at this time. Although this may become available in the future. Good question!
bottom line, leave your money in TSP. The fee is so LOW. C and S funds are amazing. Also, G fund is the only thing of its kind afaik.
spamgate1 afaik?
Afaik...as far as I know
after retire leave my money c fund and withdrawal every month or 3 month i can ?
@@rymar5911 yes, this...two years later i come back lol
@@soongpark683 i didn't say that. everyone's circumstances are different. it seem's as though english is not your first language. but i'll try to clear my thinking for you. C and S fund are good for GROWING money. IF you are near retiring, they are too risky. so, when you are 20, 10, and 5 years approaching retirement you should be locking in gains by switching to bonds or maybe the g fund slowly. if you are in the TSP then you should have resources to help you through work programs, especially military. please seek some out and get personalized advice from multiple qualified sources....not some dude on in youtube comments section (like me). but i will say, if you are early on in your investing, save aggressively into TSP, especially the C and S funds. I wish I had. also, just a curiosity, do you have korean heritage? cheers!
Thank you. this was informative. In another youtube video (Roth IRA vs ROTH TSP), you mentioned that the ROTH TSP is taxed just like social security when you start taking it out. Whereas you said that the a traditional ROTH IRA is not taxed like social security. So, would you not consider rolling it out of TSP to a ROTH IRA to avoid being taxed on those funds? The only thing thing you would have to keep in mind is the administrative/maintance fees of the traditional ROTH IRA. This seems confusing.
The TSP Roth's income is added to the PIT calculation to determine how much tax you pay of your Social Security. A Roth IRA does not have to be included. I hope that clears things up!
This this an old video so things have changed. I am in the process of moving my TSP to Vanguard. During the Pandemeic, me being somewhat conservative left some on the table. I saw what was coming and pulled out of stocks just in time and didn't lose anything but missed out on the upside. The real problem as a retiree especially is that you have to make a decision before noon regarding the the market at the end of the day which was scary last year. Had my money been in an IRA Vanguard/Fidelity etc... this could have been a real world scenario limiting risk. As a young employee let it ride. Additionally you can purchase stocks without costs. ETFs have low costs similar to TSP.
All these comments are is hate for Dave Ramsey. Why should anyone trust You. When you get your own radio show, write a system, (The Babysteps) have over 6 plus million people become debt free and the start teaching others how to do that, when you stop using credit cards and pay cash for everything for 30 years, then, I might respect your opinion.
I became debt free this year in May 2021, which means I don't get debt bills every month now. I also have 5 month emergency fund saved and I now have a Roth IRA, and for the first time seeing money grow, and I still work, because I'm still breathing.
So rather that putting a video out that encourages people to bash and mock other, have the heart of a teacher as Dave always encourages, seek wise counsel as Dave always says, and never invest in Anything you don't understand.
I hope you've grown up more as a financial advisor, with a humble heart.
Solid advice. Watch your own video and make some adjustments. - WAIT! New edit. Watched your later videos. Much better, with good edits, lots of verve, and little wasted verbiage. Also, now (later than this video) BOTH of the advantages of Ramsey’s that you cite are taken care of. Way to go, TSP!
Can I continue investing into my TSP if I leave the military?
No
Yes you can if you become a federal employee.
Can I move my tsp to an Ira if I’m only 36?
Isn’t there restrictions and huge penalties a partial hardship withdrawal
Or a full withdrawal if you no longer work for government..
I can’t just take 60k out and put it in an ira and start buying stocks correct? Why can no one answer this question?
If you want to retire early..withdrawing can be great for executing a Roth IRA conversion ladder...its not all bad to take out if you have a plan and know how to leverage tax code to access your money when your 45....which the TSP won't let you do
I served one term in the AF and can no longer deposit to the TSP (G FUND). Its not a substantial amount under 10k. Not sure if i just leave it or withdraw it and add it to my other savings. Any ideas? I'm 29.
Without knowing more, I can't provide a recommendation. But, if you can't put it in the TSP, it sounds like your only option for saving it is to put it elsewhere.
Hang onto your TSP! I made a terrible mistake and rolled my TSP over into an IRA. Much higher expense ratio, first of all. 2nd, if you've done one term in the service, chances are you're young and will be working at other companies in the future. In general, for example, let's say you are working at company A and contributing to a 401K. Then, as life has it, you see a better career opportunity and you decide to work at company B. NOW, what are you going to do with the 401k from company A? If you kept your TSP, you can roll that 401k into your TSP. TSP is a great financial tool to keep in your retirement investment toolbox! Hope this makes sense. I teach service members on a daily basis, and am reminded of the mistake I made all the time. Hope this helps!
Lisa Robinson Thank you very much!
what about the Roth TSP?
+Cub Scouts Pack 71 The statement Dave Ramsey gave was on the TSP in general. However, if you're interested on some of the differences between the TSP Roth and a Roth IRA, I made this video that may be of help: ua-cam.com/video/ULffYXWqLek/v-deo.html
I moved my tsp to an ira. I do not regret it
Can the TSP be rolled over into a self directed solo 401k?
It can be rolled into a self-directed IRA, however there's certain restrictions such as your age if still employed.
Can I move my entire tsp to an Ira at any age? I’ve got 13 years in.. I’m still young I wouldn’t mind rolling it over to an ira, buying gold and silver and various equities.. wipe the slate clean and start my tsp from 0 but then continuing to contribute to my tsp for the next 30 years? Can I do that?
Do some research into this, and don't take my word, BUT: I am fairly certain that you can. You'd most likely do a partial rollover, not a complete one. Reason being is because I've heard that you must have a minimum of $500 in the TSP for it to remain active; otherwise, it'll probably be closed out. The TSP Web site should have all this information, but if not, give them a call as they're pretty helpful. Good luck!
But does Dave Ramsey even lift? Has he made the best investment, a home Gym!!
preach 🙌 these kettlebells are definitely paying off
Really Great advice THANKS
I am now 72. WHEN i took a $50k from my TSP they took $10k out of that for taxes(?) Was that correct? Was I in error to think there was a
1- time non-taxed withdrawal?
Also, with the Economy going in the toilet I’m considering transferring to a Gold IRA. Is this wise due to the Failed Government Leadership we are collectively suffering from? Seems a huge CRASH is imminent.
I am currently 55 and on fed disability retirement. Can I start my monthly annuity payouts without the 10% early withdrawal penalty? And will it offset my ssdi?
Thanks for your reply!
Pretty sure it's 59 1/2 if that is true then No
If you have separated from service the rules are different. The year you turn 55 you can withdraw without penalty. Just money held back for taxes.
if i move it to an ira do i still get agency match
Yes, you will on your contributions to the TSP.
so this is after you leave service
No, you will not receive an agency match after you leave service.
no agency match; his comment was about moving to an IRA after you retire.
I'm not retired yet but I'm getting close. I'm a very nervous investor and I'm very cheap so I don't want to pay anyone to manage my money. I even changed my TSP to straight G fund before BREXIT and although my balance fell $12,000 in two days, I've gotten it all back and more. So although TSP lacks flexibility, it's cheap and it's effective.
That's a good point, the TSP is cheap, no doubt!
from my understanding it cant, the statement doesn't make sense.
He wasn't invested in the G fund BEFORE Brexit, he SWITCHED to the G fund BEFORE for protection in case of losses, If he left it in his other funds he would have lost more than 12,000
When there is trouble such as Brexit or tarrifs is the best time to invest. Look at Balanced funds if your worried about market volatility. 60% stocks and 40% Bonds is still a great strategy. You wont make as much as a 100% stock only account but you wont lose 40% either in fact many funds such as the 60/40 make money when everyone loses. Look at Vanguard.
In case you haven't noticed, the money you keep in TSP is actually managed by yourself. Blackrock is just a custodian. They do nothing but accounting your money and reporting. They make no decisions on where your money is invested in; except those L Funds which the management process is minimal. I don't put my money in any of the L Funds. Only mostly C, S, somtimes I funds. Having said that, an identical approach to TSP is an IRA account self-managed at TD Ameritrade has NO fees unless you let them actively manage it. So, there you have it. You can let your IRA account idle like sitting in the G Fund, or invest in SPY (your C fund), or Willshire 4500 (your S fund), or EFA (your I fund). I personally would just keep my money into the SPY, QQQ, and DIA, and let it run just like TSP. And have full access to it when bad news happen. And you can do things like selling covered calls and puts all week long; something TSP will not allow you to do.
Back to the benefits of keeping money in TSP, please give us better reasons.
this video was talking about rolling your tsp into an ira after service ?
Yes, that was Ramsey's suggestion.
thank you sir
Individual needs or that of family, age, and many factors come into play. My thought is diversification is key so TSP could fit into this with additional savings in short term CD, money market and savings plans and longer term of annuities or IRAs. Personally, two positive TSP factors for me are minimal fees that saves tens of thousands of dollars over the life of the funds compared to investment firms (Waddell & Reed, Edward Jones, Ameriprise and others) and the ability to personally change investment strategy monthly based on the market and long term needs (even intrafund transfers ability after leaving military service). I wouldn't advise putting all your investment savings in a TSP but 1/3 to 1/2, sure works for me.... I've surpassed my other two major investment savings plans with TSP (both the others are with major investment firms for a Roth IRA and annuity).
Good advice Artie!
I think the real deal in this conversation is how savvy are you with investing. If not at all, maybe staying with the TSP is good. I just moved right at 1M to a Vanguard IRA. The issue is it goes into a settlement account, do you want to just dump this into stock funds at historic highs with potential barriers on the horizon like inflation etc... all at once? Scary stuff. I'm fairly conservative. Will probably trickle it in on 1% drops into high dividend yield high quality type funds. Give me a 20% correction, I'd be big in with the rest.
I am in TSP and I use my monthly moves to catch the lows and jump out after making a good gain. My PIP (personal investment profit) have been between the 8-13% range for the past few years. I actually received a certified letter several years back telling me to quit day trading my TSP or they were going to put me to paper transfers only. At that time I had very high profits. I would wait for market to dip a few percent and jump in for 1-1.5% gain and get out and wait for the next drop.
That's a pretty funny story about TSP sending you a certified letter. Thanks for sharing!
Yeah I think there were like 3000 letters sent out. 5 were in my office alone. Wish I would have kept it.
Middle of page 1 describes what my letter stated.
www.gpo.gov/fdsys/pkg/FR-2008-04-24/pdf/E8-8957.pdf
This is so silly. If they don't want people day trading in their TSP, they should make it impossible to do so. That said, if somebody would like to take the risk, let them, it's their money.
They have taken measures now that doesn't allow you to make more than a few moves a month.
Thanks
Where did Ramsey earn his MBA and PhD? Nowhere, he has no such education. Some of what Ramsey says about reducing debt is great, but his TSP comments were bad (as your video noted).
You do realize most of the greatest investors in the world do not have MBAs or PhDs right? You may want to check that out. Soros: philosophy. Icahn: drop-out. Zuckerburg: drop-out; etc
Thank you for your helpful advice. I recently retired from the US Postal Service and have been advised by FEFA to roll the TSP into an IRA. Luckily I am a member of a FCU that has a great IRA and I wanted to do it anyway.
If you are going to roll your TSP to anIRA (I don't recommend), make sure you leave some money in your TSP account (does not have to be that much). Once you take you money out of the TSP you can never get back in.
If your IRA is in a Federal Credit Union, it's very likely that your rate of return is near zero. Banks and Credit Unions are a safe place to have one's IRA, but your returns will be dismal.
"You can get a better return _IF_ you do your research". You are labeling his advise as "blanket", whatever that means. The fact is that he is making a CONDITIONAL advise, not a blanket one. I am sure he will advise against it if he knows the person will not do the proper research and become knowledgeable, or is simply someone who lacks any financial sense. That is why he has all those recommended providers.
+Josue Nieves Thanks for your opinion! A blanket statement is one that doesn't factor in the unique individual characteristics of the people mentioned in the statement. For example, "Everyone reading this should run 5 miles a day." That doesn't make a lot of sense because there's some people who certainly should not run 5 miles and there's others that should run more. I was simply giving my take on Dave Ramsey's statement and prefaced it by saying that due to Dave's show, that is how he has to give his advice. Keep commenting though, I appreciate alternative viewpoints!
(I am a subscriber That enjoys your video's)
I am current out of the military. Is there a way to continue investing in the TSP, without being a FED employee?
No but you can roll into roth ira to continue building the funds
an ira doesnt match your contributions like the tsp does.
This is in reference to after you've left service and are no longer contributing.
What about compound interest?
Ok, i am lost you say max out your TsP but then say, to move your tsp to a roth ira. please explain.
tsp rollover ira only retire 1 month after we can do
Dave gave best, concise answer for most people, IF you do the research. That research could be very time consuming.
TSP's greatest advantage is invested makes one decision one time, and forget about it until later, or even until retired.
Convenience.
It costs opportunity loss, but prevents loss due to indecision, ignorance or procrastination.
To many restrictions, move from TSP
Is this an official fed channel? I just watched two videos and have to wonder why this video is monetized if it's part of TSP.gov (I was sent to this channel from there).
This is not an official fed channel. I have no affiliation with the federal government. Do you have the link that forwarded you here? This is the first I've heard of them linking to my channel.
Awesome
Thank you!
Risk tolerance is the same regardless of whether it's inside and outside the TSP. The only real benefit of the TSP (after retirement) is the low cost of overhead. The benefits of moving it out are many. Dave knows that there are funds out there that double the S&P rates of returns (if that's where your invested) with modest overhead costs.
This video is outdated; please go to TSP4gov to get the most recent changes, including maintenance fees (0.39c/0.40c per thousand), installment options, etc.
But if you take money out of your tsp…it’s called a loan that you need to pay back. On top of that…40% interest if your not retired
Can we please stop listing access to your retirement funds, when you are not in retirement, as a plus? It is a retirement account. It's supposed to be used for retirement. You should have money to pay for your roof and other emergencies. Also, you could do a tsp loan at ridiculously low interest rates to pay for the roof as well. You pay yourself back, not the bank, and you don't kill your retirement.
That being said, the TSP is good place to start. You can definitely get better returns in other places. You have to know your stuff. I personally believe that too many choices leave people immobilized. Analysis paralysis. I do it all. traditional and Roth tsp, Roth IRA, non tax advantaged brokerage account.
No wonder he can afford all that dam equipment
Good comments and informative but the distracting mannerism of wiping his lips...my goodness.
Never have Ramsey as your only source. He’s a bit arrogant in the sense he likes to put out blanket, quick, answers that require a lot more thought.
Does this guy have a dip in?
Haha never been a fan of tobacco outside of cigars. So, no I don't have a dip in.
I remember that SNL skit where they mocked the Royal family by wearing buckets.
Ramsey also bases his financial advice on religious doctrine. He is against anyone utilizing bankruptcy as a financial strategy, because biblically you should pay off your debts. Funny, since he has used bankruptcy in the past, and there should be no difference in personal and business debt, which is what he has had. Makes no sense to not take advantage of all avenues and tax laws.
COOOOOOOOOP!
If you leave the TSP you lose employer matching funds.....you're not getting free money. Just another thing to consider.
When you are investing in aggresive growth funds such as C, S, and I and the market tanks, you are in the same damn boat just like anyone else. This is a very very bad argument about staying in TSP. On the other hand, in an IRA, you can still put your money into the indices identical to C fund, S fund, and I fund if you want. Exposure to the market volatility is exactly the same. YET, with an IRA, you are not limited to 2 trades a month and trades become effective on the fly. Not at the end of the day. I am not encouraging you to become a day trader with an IRA account. But the freedom does allow you to respond to an adverse market condition that TSP ties your hands behind your back.
If you move your money out of the TSP (from the traditional) and into an outside IRA you are forfeiting free money (the matching funds you would’ve received from your employer); also, you'e paying much higher fees in your IRA since the TSP is widely known for its lower fees. So no....I wouldn't move out of the TSP!
@@ozneroll2132 the balance in the TSP account already got the matching. You only move that amount. As long as you work and contribute to TSP, you will continue to get the matching.
@@ozneroll2132 the matching was already done when you contribute. But to make myself clearer, you can only roll your money to an IRA when you turn 59 1/2. You cannot do that at younger age.
This guy works for tsp, trust Roth rollover is a better deal
Learn to read
Dave Ramseys net worth is $55000000. If all his money Is in the large caps and the SnP goes down 90% he will still is be a multi millionaire. As far as investing, he is out of touch with us common folk. Though it is a good idea to get and stay out of dept, the common government worker needs a solid base like a portion in the G fund to cover basic needs in case the market free falls. Sorry Dave, not a hater just a realistic thinker. 20% base in G, 5% in f, 15% in s, 5% in I, 55% in c fund.
Dave Ramsey offers just about the worst investment advice possible.
This past year was booming for the stock market. How then am I getting a negative return on my TSP? All of the funds are doing terrible. Get out of the TSP