You’re the first advisor that I heard say that we must wait 5 years to tap into a Roth IRA .. all others I’ve heard, say that we can take out our contributions at any time, just not any gain on those contributions?
What is not clear to me is that if you have only a Roth TSP, do the agency matching funds go into it or do you have to have a traditional TSP for those matching funds? If so, this means you cannot only have a Roth TSP without also having a traditional TSP.
At 6:22 you say that the Roth TSP, as opposed to the Roth IRA, is included in the Provisional Income Threshold for determining how much of your Social Security income is taxable. If I am not mistaken, this is not correct if the Roth TSP is "qualified", meaning it has been in existence for 5 years and you are at least 59 1/2. At that point none of the Roth TSP is included in provisional income. If the Roth TSP is not "qualified", only the earnings (interest) part of the Roth TSP would be included in the Provisional Income Threshold, and not the original contributions to the Roth TSP. They are never included.
Hello Cooper, I have enough income coming in that I likely will not need to withdraw anything from either of my TSP accounts (Roth and Traditional) or my IRA's (all Roth's). I still work in the government and will continue to do so for several years to come still adding to my TSP account, even though I turn 58 this year. Eventually, when I am done with the government, I anticipate over 1 million in my TSP and transferring both of my TSP accounts (Roth and Traditional) to one or several of my Roth IRA's to protect them from RMDs. Is that an accurate assessment that it will prevent me from having to take RMDs should I desire not too? Is that a wise plan? As I understand the current law, I have to take RMDs with either accounts in the TSP, but not the Roth IRA. Thank you for all that you do to help us learn to make wise financial decisions!
Doubt if anyone will answer, but I'm hoping.. I was always under the impression for a Roth that since you paid taxes up front, whatever extra cash you made from the investment was 100% tax free when you withdrew after 59.5. Example 100k contributed turns into 300k at 59.5 I can't pull out 300k completely tax free?
Cooper, I have been invested in the TSP 401k since 1992 (I had no choice since the roth tsp wasn't around back then). Obviously, I've built up the bulk of my retirement money in that vehicle. Would it make sense to open up and contribute to a Roth TSP now (along with keeping my traditional tsp 401k)? I'm planning to work another 8 to 10 years. I'm thinking that I should not bother opening up a roth tsp at this point. I know about the possible tax advantages of the roth tsp but I wouldn't have nearly as much in it (when I retire) as compared to my traditional tsp 401k anyway. I figure with the larger amount in the traditional tsp 401k ....that I should go ahead and use it to make as much as I can. What do you think? Thank you
If I make contributions to Roth TSP right up to retirement, and then take an annuity, do I end up having to pay penalties on the Roth TSP contributions that have not been invested for 5 years? What are some options to prevent this? Roger Dormaier
Hey Roger, great question. To answer simply, as long as the account has been open for a total of 5 years, you won't pay any penalties. It's all related to the accounts start date, not the last contribution date.
If I move my Roth TSP to a Roth IRA when I separate, when would I be able to access the contributions? Would the entire balance be considered a contribution, or would they keep track of contributions and appreciation?
If you move the Roth TSP to a Roth IRA, you would be able to access the IRA after 5 years. The balance is a rollover, so it's not considered a contribution.
Yes. In fact if they are matching funds and you chose Roth TSP, you do have both. What you put in is ROTH, what they match will always be traditional. You are just limited to the annual cap of $18,500 ($19K in 2019).
You said at the 4:30 mark that you can withdraw your contributions from a Roth IRA after the 5 year "seasoning period". I'm not trying to be an internet troll or anything, but that is incorrect. You can withdraw your contributions from a Roth IRA at any point without penalties, but if you touch your EARNINGS from the Roth IRA that is where you run into penalties.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) became law on December 20, 2019. The Secure Act made major changes to the RMD rules. If you reached the age of 70½ in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72.
very informative! I knew about 75% of what you spoke about, however the new info gleened from you is much appreciated! Will do more research and if you reasoning proves out, I will be adjusting my retirement strategy! Thank you.
Hi I work in the military and I am 32 years old and I just have 2 years in the military. My question is that is it ok to have 50 50 on roth and traditional?
Yes, you can do that. However, make sure you read to understand the differences between the Roth and Traditional so you're making an informed decision.
Cooper, I currently have a traditional TSP I've been in service for a little over 10yrs. I am currently contributing only 5%, I was told that as long as I contribute 5% to my TSP, it would be a better idea to get a Roth IRA and contribute the max to that... My mandatory retirement age is 57, I still have 22yrs to go... What do you think?
I wouldn't say it's a bad idea; the only thing I'd be wary of is the person telling you that information. I advise some of my clients to follow that strategy, but it's after viewing their full financial profile and making a suggestion on what would be best for them. If they advisor isn't considered a "fiduciary" I would be cautious of their advice as they may just be looking out for themselves. Overall, a Roth IRA may be better, but it will likely be more expensive.
Okay, that makes sense. Currently my 5% is a little over 5K, my base salary is a little over 100K. As it stands, I can put in a max dollar amount of $18,500 annually, but I can't see myself being able to afford that amount. I'm thinking an IRA may be my best option.
Al Rocky I'm a civilian employee under FERS. My annual salary should only increase as I gain time through "step increases" or promotion. I'm very new to this and I appreciate your input. Thank you!
Al Rocky, thank you for your reply! I am currently contributing 5% to my TSP, therefore, I am being matched that "4+1" or "5%". In June, I will receive a $2,900 step increase which will all go to EITHER my TSP or IRA, there in lies my question. Bottom line, I have to find a way to contribute $711 per pay period to my TSP effectively accounting for the MAX of $18,500 to be contributed annually. I WILL reach that point within the year or so. That being said, would it be wise to go the Roth IRA route? I have one already but haven't been contributing to it very much, currently, have about $25K in it...
I am currently contributing into my Roth TSP. I understand that taxes on a Roth TSP are paid immediately upon contribution. I also understand that you can withdraw without tax penalty if you meet two conditions (1) 5 year rule and (2) you are 59 1/2, unless disabled. I'm a bit confused because I don't see much of a change in the amount of Federal tax I'm paying, as outlined in the earning's statement deductions. Do I pay tax on my contributions at the end of the tax year when I file or is that supposed to come out of my Federal Tax line item on the earnings statement I get every pay period? The federal tax coming out of my deductions is practically the same as before I started contributing. Hope my question makes sense. Thank you.
Great question Rick and sorry I didn't see it sooner. You do not pay tax on the contributions at the end of the tax year when you file. I actually have an article that discusses some on the Roth TSP that you can find here that may be helpful: www.fedretirementplanning.com/roth-tsp-vs-roth-ira-showdown/
I am below age of < 50 .....can I put 18,000 $ ( max /2016 ) in my TSP yearly and in addition ,5000 $ in Roth IRA yearly ??? is there any limit for Roth IRA , if I have already maxed out my TSP to 18000 $ ???
Just did 5 percent for TSP and 8 for ROTH IRA. Been living at E2 pay for the past few years with a few pay bumps. Now at every annual pay bump or promotion, i’m increasing a percent on one or the other. Its not a gamble if there’s a proven record of success from other people.
Yes. You can do both. IRA limit is $5,500/yr plus TSP is $18,500/yr. If you are deployed to a combat zone, your TSP limit goes up to $54,000/yr I believe. Only stipulation is if you make more than $183K you can't contribute to a Roth IRA. But as long as you are a fed employee you can contribute to Roth TSP. Like he said in video, any gov't matching funds will be Trad TSP, not ROTH. GL. Hope this helps.
@@Cocotikihut Feel free to PM me if you have any further questions. I recently retired from the military, so I have some time on my hands for now. I highly recommend you understand WHAT you fund you are choosing in the TSP. This document will help explain the different funds: www.tsp.gov/PDF/formspubs/tsplf14.pdf What you choose is up to you based on your goals and risk tolerance.
I'm more confused AFTER the video. Here is my question. I have both Traditional and Roth TSP. I am currently only putting into my ROTH TSP.....does this mean that the agency is NOT matching their matching percentage? Or does it mean what they match is going directly into my Traditional TSP portfolio portion of my TSP savings.
From what I've seen C or S fund would be the best bet. G fund barely keeps up with the rate of inflation and is basically just a safe haven savings account for those that are older and maybe don't have time to wait for market fluctuations to work themselves out.
One thing Cooper (and just about every other adviser I've heard on the web) failed to mention is that a significant tax advantage either the Roth TSP or Roth IRA has over the TSP traditional IRA or IRA outside the TSP is that not only are your already taxed contributions tax free upon withdrawal, but also the EARNINGS that have compounded all those years are tax free also when withdrawn. Those earnings can be very considerable. With the traditional IRA only your original contribution is not taxed when you make the contribution.
Al, that is true as far as your contributions are concerned - you are taxed either at the time of your contribution for a Roth TSP or Roth IRA or when you withdraw them at retirement for a traditional TSP or IRA, and who knows which tax rates will be higher? I just wanted to point out that you are also taxed on the earnings when you withdraw them from a traditional TSP or IRA but NOT when you withdraw earnings from the ROTH TSP or ROTH IRA. Those earnings over 20 or 30 years can be greater than all the contributions you've made. Just something I don't think is mentioned enough when people are considering which to choose.
I am a high school senior and am considering a career in the military. From what I've read and heard, it would be beneficial to contribute to a Roth TSP and receive a 4% match on my 5% contribution. At the age of retirement, before 70.5, I would roll my Roth TSP into a Roth IRA to avoid mandatory withdrawal. If you have video about rolling account balances I would love to see it. I've got a few questions. Would there be any penalties for rolling the account, seeing as how the maximum contribution is $5,500 until 59.5 on the Roth IRA? Would the tax I owe on the 4% match be due upon the roll over? I appreciate your videos. I've definitely got some catching up to do.
Hey Jeremiah, good for you on doing your research at such a young age! I do not have a video yet, although I plan to in the future. There are no penalties for rolling into a qualified IRA account. The tax for a Roth account is paid as you contribute, not upon rollover or withdrawal. Hopefully that helps and thank you for the kind words!
Fed Retirement Planning - After watching your last video I realized that the 4% Match I've been mentioning should be a 5% Match. You mentioned that the 5% Match is placed in the Traditional TSP. Could I roll that into a Roth IRA after paying taxes, or would I have to roll it a Traditional IRA? I realize that whether I should or not is entirely situational.
If you have a home to use as an itemized deduction and children you can claim as dependents this will help with your taxes now. So the Roth TSP is the way to go, because when you retire you will not have them deductions to help lower your taxes.A question I have is that you can start withdrawing your traditional TSP before 59.5 without penalty if you retire at your minimum retirement age. Is that the same for the Roth as long as you have your 5 years.
I just found your channel after the RSP group put on a conference call about the TSP. during the call I kept asking some of the questions that you talk about in this video but none of the moderators would answer my questions regarding the ROTH TSP, I ended up researching ,y questions and finding most of the answers on my own. One question that I couldn't find or get a straight answer from anyone which you talked about is: "The ROTH TSP the same as a ROTH IRA that I would get are a investment company?" If I understand you correctly, the ROTH TSP is not the same as a ROTH IRA and listening to what you said. If I am looking at possible higher taxes at my time of retirement; I shouldn't be investing in the ROTH TSP; but, rather a ROTH IRA because due to the flexibility that I can get with a ROTH IRA from say Vanguard verses the ROTH TSP. Would you say that this is a true statement? Can you explain more or do you have a more in-depth video on a Roth TSP verses a ROTH IRA? thanks in advance.
I'll take a stab at your question. My response: If you think you will be in a higher tax bracket in retirement, you are better off paying your taxes now, which is a Traditional IRA and/or Traditional TSP. In the most basic terms...ROTH = pay taxes now. Traditional = pay taxes later. The flexibility he is talking about between ROTH TSP and ROTH IRA is that with the ROTH IRA, you can withdraw your invested amount after 5 years with no penalty, where as with the ROTH TSP you can't withdraw anything til age 59.5. GL Hope this helps.
as a younger Fed employee I've got a fair amount of student debt and am taking advantage of the public service loan forgiveness program, you're monthly payments over 10 years are determined by your AGI, it makes the tax advantaged traditional TSP seem like a good idea for the next 10 years
Zac Osburn it really depends. If you get a match for your a Roth TSP, do the tsp. And the maint fees associated with a Roth tsp is extremely less costly than doing a managed Roth IRA. The only reason I would suggest anyone do a Roth IRA if they can’t contribute to a Roth TSP.
Here are the key considerations for opening a private Roth: 1. Investment selection 2. Rate of return vs fees. You can get greater return on your investment in other non tsp funds. For example the S fund tracks the Dow Jones and tries to match it. There are private Investments that try to beat the Dow Jones. You can do better privately but you have to know how to evaluate the funds. 3. Your level of sophistication and willingness to manage your investments. Don't pay somebody else to manage your Roth account because you don't want to do it yourself. You will eat into your returns and possibly end up worse off than if you went with the low fee tsp. If you are a novice, just set it and forget it. The key to a good retirement is about starting early and being consistent. Just save something. That is really it. It's super easy to just have the money come out of your paycheck and be done with it. Personally, I maxed out my tsp (19k now). I have a roth ira and a regular brokerage account for other investments. I just need to reassess my tax situation and see if roth tsp will be better for me. I am leaning towards paying taxes now.
Hello I contribute 25% to my TSP and 10% to my IRA my goal is to get to 50% TSP and 35% IRA . I want to know should I go that high or stay at the 25-10%. As of right now I contribute to the F,C,S and G fund. Just want to know if I'm investing right or not.
Robert, deciding how much to invest is very personal and based on a ton of factors. It's something I help all of my clients decide, but only after having looked at the BIG picture. I will say this however, the more you invest now, most likely, the more you'll have later on.
Hi Cooper! Just found your channel not long ago. I have a question if you don’t mind. I’m a federal employee and I’m looking into getting a Roth IRA. I don’t know if it’s better to just go with my bank or find a private broker. What do you suggest? Another thing the last difference is that I have to make a certain amount of money in order for me to qualify? Am I correct? I was thinking of opening one with $1000 Thank you for your time and LORD bless!
I'm currently in the military and I'm interested in the ROTH TSP. If I choose the ROTH TSP now, will I still be able to contribute if I'm no longer a federal employee in 5 years? Is the ROTH TSP exclusively for Federal employees? Thank you
Once you leave federal service, you can no longer contribute to TSP. You can leave it alone, or roll it over, or withdraw it and pay penalties if you aren't qualified to take it out. If you choose to leave your TSP alone, you will still be able to move the funds around and rebalance your account as you wish, as much as TSP will allow. My personal experience has been that TSP does not perform as well as other outside options, but if you want some of your money to stay in cash funds (G-fund) the TSP pays better than outside funds for that. If you need emergency funds, you may have problems accessing your TSP funds. I'm not sure if you can roll over just part of your TSP if you are no longer a federal employee. NOTE: If you were military and part of your TSP contributions occurred where your pay was non-taxable (such as pay and TSP contributions while in a combat zone), the TSP will keep track of this, but it might not continue to be tracked if you roll over these non-taxable TSP funds. You might have to keep paperwork to prove part of your TSP funds are not taxable. I am sure it is this 'special' tracking is one reason the military TSP and civilian TSP cannot be mixed.
Great question and thank you for your service! It's a bit difficult for me to provide a recommendation without knowing more about your situation, but I'll try to create some content soon on some of your options.
Im contributing 6% in the roth tsp because taxes could get higher later on the more the money increase in the roth (if that makes any sense?). I will probably increase the percent later on
There always a chance that later on taxes could be significantly lower then they are now though. Also if you retire without taking another job you will fall down the tax bracket and have to pay a lower overall percent.
Do you think its worth contributing to BOTH ROTH TSP and TRAD. TSP? I am unsure what my tax situation will be like at retirement and dont want to guess what Federal level changes may be made in the future. Also, Does the income deduction of your TRAD. TSP contribution happen automatically via the W-2 or is it a manual itemized thing? Good channel, I have passed it around to my buddies in Federal service and the Army.
Don't know where Cooper went, but I really enjoy this topic and helping people, so I'll give your questions a go. So, in terms of taxes, your Traditional TSP is already deducted from your taxable income on your W-2 so you don't have to claim it. You just show a reduced taxable income. If you also have a Traditional IRA, then you have to identify this such that it is deducted from your taxable income. Most tax programs will ask 1)do you have an IRA?, 2) is it a Trad or ROTH, 3) if the answer to 2 is Trad, how much (thus it is deducted from your taxable income). If you say ROTH, there is no deduction and you pay your taxes now, but not later. In regards to Trad vs ROTH, I believe there is really one most important time you should really be concerned with ROTH vs Traditional. This is a bit complicated but I'll try to explain. This important time is when you cross from the now 12% tax bracket to the 22% tax bracket. For most of us, this is the only time it is a huge difference between tax brackets. Just in case you don't understand taxes (I didn't for a long time), if you make $42,700 in taxable income, and are single, look up the 2018 tax brackets. You will pay no taxes on the first $9,525. You will pay 12% on the next amount up to $38,700. Then you pay 22% on the last amount over $38,700. So the math would look like this: (0x9,525)+(.12x(38,700-9,525))+(.22x(42,700-38,700)=0+3,501+880=$4,381 in total taxes. In other words, when you cross tax brackets, it is not like you all of a sudden pay 22% on all your income. So, if you are single and make $42,700 in taxable income, you could invest $4,000 in a Traditional IRA (vice a Roth IRA), and you avoid paying the 22% on this last $4,000, or $880. So instead of paying $880 now, you pay your taxes later, when your income maybe is lower and you only pay 12% in the future. Hope this helps, GL, thanks for your service.
If I can contribute fully to Roth IRA ($6500) or TSP Roth ($6500) that is not matched because I am CSRS, it seems I might be better to contribute to Roth IRA, no? I can't see any advantage (except fund fees are lower in TSP) to contributing to TSP Roth. Am I missing something? (I'm just speaking of Roth options.) If you were going to put in $6500 (over 50) into a Roth IRA or Roth TSP which would you choose and why?
Great question. The TSP Roth and Roth Ira are very different and good on you for making the distinction. One of the great features of the TSP is its low fees, however, you will have more investing options and withdrawal options from an IRA. As far as saying which one I believe you should do, that would require me to know much more about your situation. Feel free to shoot me an email at cooper@fedretirementplanning.com if you want to talk more.
You can withdraw ROTH IRA contributions whenever you feel like it, there is no five year waiting period for CONTRIBUTIONS. A huge benefit over the Roth TSP. Also, any negatives the Roth TSP may have can be trounced knowing that you can roll it over to a Roth IRA : )
True, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. However, you may have to pay taxes and penalties on earnings in your Roth IRA under the age of 59.5 or 59.5 with less than 5 years contributing.
Given the fact that most Americans don't have anything saved for retirement, I would say that the ability to access money from your retirement account is a bad thing. That money needs to be locked away and people need to budget and save better. Shouldn't be looking at your retirement account as a potential Cash Cow for an emergency. Save an actual emergency fund
If you work for the government and get matching (tsp) I would spread it out. Make that free money. But if you invest early when you’re young I don’t see why that same way wouldn’t transfer to putting it in sooner in the year. 🤔🤷🏼♂️ Sounds like you just have 5k sitting around. If it’s just sitting around. Invest it. Note. I’m not a cpa or advisor. Make that 🤑🤑🤑🤑
@@justinjustin337 thanks. I started investing at the market crash and things have been looking up. I out about $10k into ETFs, dividend stocks, and some high growth stocks. I didn’t put any into my TSP though besides the initial $1k and some change that was already in it from a few years ago.
What never seems to be addressed regarding Roth VS Traditional is: If you invest $30,000 of your money in a Roth and it grows over time to $100,000, you only paid tax on $30,000. In a Traditional plan you don't pay tax on the $30,000 going in, but you DO pay tax on $100,000 coming out. Everyone seems to talk about it like you pay an equal amount of tax. In the long run, you will pay much less tax on a Roth plan as compared with a Traditional. As for me even if my tax bracket drops in retirement, I would rather pay 25% tax on $30,000, than 15% on $100,000. You can insert what ever tax bracket you are in, or expect to be in at retirement.
The Tax Benefits are the same, but with some complications. If you leave your money in the TSP plan, when you retire, and you have a Traditional and a Roth Plan, when you are required to take your mandatory deductions from your Traditional plan (year in which you turn 70 1/2) they will take proportional amounts from both your Traditional and Roth plans. Remember, you aren't required to make withdrawals from your Roth IRA at age 70 1/2, only under the TSP do they automatically withdraw from both. You can get around that by transferring your Retirement funds into a IRA Roll-over Account. Then you would only have money withdrawn from your Traditional IRA account when you are required to take your mandatory withdrawals.
You also need to consider time as well; $1 now is worth more than $1 in 40 years. But yes, otherwise you are correct. For a ROTH you don't pay taxes in the future, to include its earnings.
This is actually faulty logic. If your money is going to grow at the same percentage either way, you will have the same final amount whether you are taxed at the beginning or the end. As a very simple example, let's say you invest $100 for 20 years and the tax rate is 25%. Let's assume constant returns of 10% per year for simplicity. With a tax deferred plan, you will see $100 * (1.10)^20 * 0.75. If you pay taxes upfront, you will see 0.75 * $100 * (1.10)^20. This is the exact same equation, just in a different order. For a calculation like this, it doesn't matter if you take away a percentage at the beginning or the end; you end up with the same result either way. The reasons to choose a Roth vs. traditional plan depend on the differences mentioned in this video and whether you think the tax rate will be higher or lower in the future.
That is very true. There is also a hidden assumption that you save or invest the money that you save from not paying taxes now. If you don't pay taxes on that money, and you just spend it, you are going to be worse off in the end.
Mostly agree, but definitely disagree on a couple. First, TSP is the best place to borrow money as long as you do it responsibly. The rate is the best and they also limit the amount. Second, Leaving some or even all money in TSP at after retirement may not be a bad idea if you know how to invest. Albeit limited, there are still choices of some funds you can mix and match. No one can beat the investment expenses.
I currently work for the Government- which one HAHA! and by that you already know Nevertheless. I want/need to invest into TSP. I need to do the math of 5% of my bi-weekly contribution - correct? That 5% I want to go to the G-Fund: I'm not much for risk but I want to invest perhaps another 5% and or split it 2% into one investment/3% into another.With that being said; what ever I make off the split investment moving that into the G-fund, still leaving the original 2%/3% there. In other word taking the fizz from the Pespi & putting it into the safe box. Not sure of the closing date to invest but it is soon.
If you are really interested in ensuring you maintain a balanced investment portfolio, better to invest all your money into one of the L-funds that is appropriate for your retirement age (L-income if you are ready to retire, L-2050 if you aren't going to retire for 30 or so years). If you invest in L-funds, then ONLY invest in L-funds and nothing else (that's how they are intended to be used -- park it and forget it.) Do not mix S, C, I, or G, F funds with L-funds. Do either-or not both. Your matching funds will be balanced and distributed exactly the same as your own funds.
Al Rocky Whoa!! Thank You , I am at the age of retirement, didn't make a wise choice, So can I put my 5% in the G Fund and another 5% in the L? Then my next question would be what would be an an over all decent investment outside of my TSP? If possible not using a broker?
Roobah Whoa!! Thank You , I am at the age of retirement, didn't make a wise choice, So can I put my 5% in the G Fund and another 5% in the L? Then my next question would be what would be an an over all decent investment outside of my TSP? If possible not using a broker?
You’re the first advisor that I heard say that we must wait 5 years to tap into a Roth IRA .. all others I’ve heard, say that we can take out our contributions at any time, just not any gain on those contributions?
What is not clear to me is that if you have only a Roth TSP, do the agency matching funds go into it or do you have to have a traditional TSP for those matching funds? If so, this means you cannot only have a Roth TSP without also having a traditional TSP.
John, you are correct. You cannot only have a Roth TSP if you receive matching funds. The match HAS to go to the traditional side of the TSP.
At 6:22 you say that the Roth TSP, as opposed to the Roth IRA, is included in the Provisional Income Threshold for determining how much of your Social Security income is taxable. If I am not mistaken, this is not correct if the Roth TSP is "qualified", meaning it has been in existence for 5 years and you are at least 59 1/2. At that point none of the Roth TSP is included in provisional income. If the Roth TSP is not "qualified", only the earnings (interest) part of the Roth TSP would be included in the Provisional Income Threshold, and not the original contributions to the Roth TSP. They are never included.
What if you not working for government anymore do you still need to pay roth tsp? And also you can enroll roth tsp and traditional tsp ?
8:02 wow I never knew that!
im 17 in the national guard and look to stay in for a while. which should i choose to start
i would suggest a roth tsp. im 19 in guard
I would talk with a CPA. Depending on how much you’re making now might help you decide on a Roth or traditional.
Hello Cooper, I have enough income coming in that I likely will not need to withdraw anything from either of my TSP accounts (Roth and Traditional) or my IRA's (all Roth's). I still work in the government and will continue to do so for several years to come still adding to my TSP account, even though I turn 58 this year. Eventually, when I am done with the government, I anticipate over 1 million in my TSP and transferring both of my TSP accounts (Roth and Traditional) to one or several of my Roth IRA's to protect them from RMDs. Is that an accurate assessment that it will prevent me from having to take RMDs should I desire not too? Is that a wise plan? As I understand the current law, I have to take RMDs with either accounts in the TSP, but not the Roth IRA.
Thank you for all that you do to help us learn to make wise financial decisions!
Doubt if anyone will answer, but I'm hoping..
I was always under the impression for a Roth that since you paid taxes up front, whatever extra cash you made from the investment was 100% tax free when you withdrew after 59.5.
Example 100k contributed turns into 300k at 59.5
I can't pull out 300k completely tax free?
Cooper, I have been invested in the TSP 401k since 1992 (I had no choice since the roth tsp wasn't around back then). Obviously, I've built up the bulk of my retirement money in that vehicle. Would it make sense to open up and contribute to a Roth TSP now (along with keeping my traditional tsp 401k)? I'm planning to work another 8 to 10 years. I'm thinking that I should not bother opening up a roth tsp at this point. I know about the possible tax advantages of the roth tsp but I wouldn't have nearly as much in it (when I retire) as compared to my traditional tsp 401k anyway. I figure with the larger amount in the traditional tsp 401k ....that I should go ahead and use it to make as much as I can. What do you think? Thank you
Thanks for the advice Cooper!
Thanks Cooper, can always count on your honest assessment
Is it a good idea to contribute to both Roth and Traditional TSP? Like putting 5% in each?
That's hard to say without knowing more about your situation. However, I'm of the opinion that the more you can save for retirement, the better.
If I make contributions to Roth TSP right up to retirement, and then take an annuity, do I end up having to pay penalties on the Roth TSP contributions that have not been invested for 5 years? What are some options to prevent this? Roger Dormaier
Hey Roger, great question. To answer simply, as long as the account has been open for a total of 5 years, you won't pay any penalties. It's all related to the accounts start date, not the last contribution date.
If I move my Roth TSP to a Roth IRA when I separate, when would I be able to access the contributions? Would the entire balance be considered a contribution, or would they keep track of contributions and appreciation?
If you move the Roth TSP to a Roth IRA, you would be able to access the IRA after 5 years. The balance is a rollover, so it's not considered a contribution.
So as federal employees, can we have both, a traditional TSP and a Roth TSP?
Yes. In fact if they are matching funds and you chose Roth TSP, you do have both. What you put in is ROTH, what they match will always be traditional. You are just limited to the annual cap of $18,500 ($19K in 2019).
You said at the 4:30 mark that you can withdraw your contributions from a Roth IRA after the 5 year "seasoning period".
I'm not trying to be an internet troll or anything, but that is incorrect. You can withdraw your contributions from a Roth IRA at any point without penalties, but if you touch your EARNINGS from the Roth IRA that is where you run into penalties.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) became law on December 20, 2019. The Secure Act made major changes to the RMD rules. If you reached the age of 70½ in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72.
Thank you Cooper, I learned a lot from your videos.
very informative! I knew about 75% of what you spoke about, however the new info gleened from you is much appreciated! Will do more research and if you reasoning proves out, I will be adjusting my retirement strategy! Thank you.
You're welcome Timothy!
Hi I work in the military and I am 32 years old and I just have 2 years in the military. My question is that is it ok to have 50 50 on roth and traditional?
Yes, you can do that. However, make sure you read to understand the differences between the Roth and Traditional so you're making an informed decision.
Ernesto Esqueda x
Cooper, I currently have a traditional TSP I've been in service for a little over 10yrs. I am currently contributing only 5%, I was told that as long as I contribute 5% to my TSP, it would be a better idea to get a Roth IRA and contribute the max to that... My mandatory retirement age is 57, I still have 22yrs to go... What do you think?
I wouldn't say it's a bad idea; the only thing I'd be wary of is the person telling you that information. I advise some of my clients to follow that strategy, but it's after viewing their full financial profile and making a suggestion on what would be best for them. If they advisor isn't considered a "fiduciary" I would be cautious of their advice as they may just be looking out for themselves. Overall, a Roth IRA may be better, but it will likely be more expensive.
Okay, that makes sense. Currently my 5% is a little over 5K, my base salary is a little over 100K. As it stands, I can put in a max dollar amount of $18,500 annually, but I can't see myself being able to afford that amount. I'm thinking an IRA may be my best option.
Al Rocky I'm a civilian employee under FERS. My annual salary should only increase as I gain time through "step increases" or promotion. I'm very new to this and I appreciate your input. Thank you!
Al Rocky, thank you for your reply! I am currently contributing 5% to my TSP, therefore, I am being matched that "4+1" or "5%". In June, I will receive a $2,900 step increase which will all go to EITHER my TSP or IRA, there in lies my question. Bottom line, I have to find a way to contribute $711 per pay period to my TSP effectively accounting for the MAX of $18,500 to be contributed annually. I WILL reach that point within the year or so. That being said, would it be wise to go the Roth IRA route? I have one already but haven't been contributing to it very much, currently, have about $25K in it...
Also thank you so much for the reading list, much appreciated!
I am currently contributing into my Roth TSP. I understand that taxes on a Roth TSP are paid immediately upon contribution. I also understand that you can withdraw without tax penalty if you meet two conditions (1) 5 year rule and (2) you are 59 1/2, unless disabled.
I'm a bit confused because I don't see much of a change in the amount of Federal tax I'm paying, as outlined in the earning's statement deductions. Do I pay tax on my contributions at the end of the tax year when I file or is that supposed to come out of my Federal Tax line item on the earnings statement I get every pay period? The federal tax coming out of my deductions is practically the same as before I started contributing. Hope my question makes sense. Thank you.
Great question Rick and sorry I didn't see it sooner. You do not pay tax on the contributions at the end of the tax year when you file. I actually have an article that discusses some on the Roth TSP that you can find here that may be helpful: www.fedretirementplanning.com/roth-tsp-vs-roth-ira-showdown/
+Fed Retirement Planning thanks will check it out.
I am below age of < 50 .....can I put 18,000 $ ( max /2016 ) in my TSP yearly and in addition ,5000 $ in Roth IRA yearly ??? is there any limit for Roth IRA , if I have already maxed out my TSP to 18000 $ ???
What you invest in the TSP does NOT affect what you invest in an IRA.
Just did 5 percent for TSP and 8 for ROTH IRA. Been living at E2 pay for the past few years with a few pay bumps. Now at every annual pay bump or promotion, i’m increasing a percent on one or the other. Its not a gamble if there’s a proven record of success from other people.
Cooper, are we able to have a roth tsp and roth ira?
Yes. You can do both. IRA limit is $5,500/yr plus TSP is $18,500/yr. If you are deployed to a combat zone, your TSP limit goes up to $54,000/yr I believe. Only stipulation is if you make more than $183K you can't contribute to a Roth IRA. But as long as you are a fed employee you can contribute to Roth TSP. Like he said in video, any gov't matching funds will be Trad TSP, not ROTH. GL. Hope this helps.
@@joshhoward1289 yes it does, thanks
@@Cocotikihut Feel free to PM me if you have any further questions. I recently retired from the military, so I have some time on my hands for now. I highly recommend you understand WHAT you fund you are choosing in the TSP. This document will help explain the different funds: www.tsp.gov/PDF/formspubs/tsplf14.pdf
What you choose is up to you based on your goals and risk tolerance.
I'm more confused AFTER the video. Here is my question. I have both Traditional and Roth TSP. I am currently only putting into my ROTH TSP.....does this mean that the agency is NOT matching their matching percentage? Or does it mean what they match is going directly into my Traditional TSP portfolio portion of my TSP savings.
It goes to the traditional tsp side.
After you retired , what fund should you keep it in. Because G Fund are making so little interest
From what I've seen C or S fund would be the best bet. G fund barely keeps up with the rate of inflation and is basically just a safe haven savings account for those that are older and maybe don't have time to wait for market fluctuations to work themselves out.
I was thinking about putting some funds into the L fund. But I am scared of the market, the way it’s seesaw
@@martinmercerjr8615 No risk no reward
One thing Cooper (and just about every other adviser I've heard on the web) failed to mention is that a significant tax advantage either the Roth TSP or Roth IRA has over the TSP traditional IRA or IRA outside the TSP is that not only are your already taxed contributions tax free upon withdrawal, but also the EARNINGS that have compounded all those years are tax free also when withdrawn. Those earnings can be very considerable. With the traditional IRA only your original contribution is not taxed when you make the contribution.
Al, that is true as far as your contributions are concerned - you are taxed either at the time of your contribution for a Roth TSP or Roth IRA or when you withdraw them at retirement for a traditional TSP or IRA, and who knows which tax rates will be higher? I just wanted to point out that you are also taxed on the earnings when you withdraw them from a traditional TSP or IRA but NOT when you withdraw earnings from the ROTH TSP or ROTH IRA. Those earnings over 20 or 30 years can be greater than all the contributions you've made. Just something I don't think is mentioned enough when people are considering which to choose.
I am a high school senior and am considering a career in the military. From what I've read and heard, it would be beneficial to contribute to a Roth TSP and receive a 4% match on my 5% contribution. At the age of retirement, before 70.5, I would roll my Roth TSP into a Roth IRA to avoid mandatory withdrawal.
If you have video about rolling account balances I would love to see it. I've got a few questions. Would there be any penalties for rolling the account, seeing as how the maximum contribution is $5,500 until 59.5 on the Roth IRA? Would the tax I owe on the 4% match be due upon the roll over?
I appreciate your videos. I've definitely got some catching up to do.
Hey Jeremiah, good for you on doing your research at such a young age! I do not have a video yet, although I plan to in the future. There are no penalties for rolling into a qualified IRA account. The tax for a Roth account is paid as you contribute, not upon rollover or withdrawal. Hopefully that helps and thank you for the kind words!
Fed Retirement Planning - After watching your last video I realized that the 4% Match I've been mentioning should be a 5% Match. You mentioned that the 5% Match is placed in the Traditional TSP. Could I roll that into a Roth IRA after paying taxes, or would I have to roll it a Traditional IRA? I realize that whether I should or not is entirely situational.
If you have a home to use as an itemized deduction and children you can claim as dependents this will help with your taxes now. So the Roth TSP is the way to go, because when you retire you will not have them deductions to help lower your taxes.A question I have is that you can start withdrawing your traditional TSP before 59.5 without penalty if you retire at your minimum retirement age. Is that the same for the Roth as long as you have your 5 years.
Good advice Ben!
I just found your channel after the RSP group put on a conference call about the TSP. during the call I kept asking some of the questions that you talk about in this video but none of the moderators would answer my questions regarding the ROTH TSP, I ended up researching ,y questions and finding most of the answers on my own. One question that I couldn't find or get a straight answer from anyone which you talked about is: "The ROTH TSP the same as a ROTH IRA that I would get are a investment company?" If I understand you correctly, the ROTH TSP is not the same as a ROTH IRA and listening to what you said. If I am looking at possible higher taxes at my time of retirement; I shouldn't be investing in the ROTH TSP; but, rather a ROTH IRA because due to the flexibility that I can get with a ROTH IRA from say Vanguard verses the ROTH TSP. Would you say that this is a true statement? Can you explain more or do you have a more in-depth video on a Roth TSP verses a ROTH IRA? thanks in advance.
I'll take a stab at your question. My response: If you think you will be in a higher tax bracket in retirement, you are better off paying your taxes now, which is a Traditional IRA and/or Traditional TSP. In the most basic terms...ROTH = pay taxes now. Traditional = pay taxes later. The flexibility he is talking about between ROTH TSP and ROTH IRA is that with the ROTH IRA, you can withdraw your invested amount after 5 years with no penalty, where as with the ROTH TSP you can't withdraw anything til age 59.5. GL Hope this helps.
as a younger Fed employee I've got a fair amount of student debt and am taking advantage of the public service loan forgiveness program, you're monthly payments over 10 years are determined by your AGI, it makes the tax advantaged traditional TSP seem like a good idea for the next 10 years
You should be paying those loans off yourself....you took them out. I had loans, work for the federal government, and paid them off myself...
Would you suggest opening a private Roth IRA to place money in, addition to having a ROTH TSP?
Zac Osburn it really depends. If you get a match for your a Roth TSP, do the tsp. And the maint fees associated with a Roth tsp is extremely less costly than doing a managed Roth IRA. The only reason I would suggest anyone do a Roth IRA if they can’t contribute to a Roth TSP.
Here are the key considerations for opening a private Roth:
1. Investment selection
2. Rate of return vs fees. You can get greater return on your investment in other non tsp funds. For example the S fund tracks the Dow Jones and tries to match it. There are private Investments that try to beat the Dow Jones. You can do better privately but you have to know how to evaluate the funds.
3. Your level of sophistication and willingness to manage your investments. Don't pay somebody else to manage your Roth account because you don't want to do it yourself. You will eat into your returns and possibly end up worse off than if you went with the low fee tsp.
If you are a novice, just set it and forget it. The key to a good retirement is about starting early and being consistent. Just save something. That is really it. It's super easy to just have the money come out of your paycheck and be done with it.
Personally, I maxed out my tsp (19k now). I have a roth ira and a regular brokerage account for other investments. I just need to reassess my tax situation and see if roth tsp will be better for me. I am leaning towards paying taxes now.
I’m confused all Ik is that my last name is roth... ._.
Hello I contribute 25% to my TSP and 10% to my IRA my goal is to get to 50% TSP and 35% IRA . I want to know should I go that high or stay at the 25-10%. As of right now I contribute to the F,C,S and G fund. Just want to know if I'm investing right or not.
Robert, deciding how much to invest is very personal and based on a ton of factors. It's something I help all of my clients decide, but only after having looked at the BIG picture. I will say this however, the more you invest now, most likely, the more you'll have later on.
Can I contribute 5% to tsp ira and 2% to Roth tsp. How much money would they take ouy
In reference to Matching. Does Roth TSP give me the disadvantage? For example: Do they match my after tax or pre tax amount?
Good question. Both the traditional and Roth TSP's have the same matching rules.
Hi Cooper! Just found your channel not long ago. I have a question if you don’t mind. I’m a federal employee and I’m looking into getting a Roth IRA. I don’t know if it’s better to just go with my bank or find a private broker. What do you suggest?
Another thing the last difference is that I have to make a certain amount of money in order for me to qualify? Am I correct? I was thinking of opening one with $1000
Thank you for your time and LORD bless!
I'm currently in the military and I'm interested in the ROTH TSP. If I choose the ROTH TSP now, will I still be able to contribute if I'm no longer a federal employee in 5 years? Is the ROTH TSP exclusively for Federal employees? Thank you
The TSP is only for Federal Employees. You cannot contribute once you leave federal service.
Ok. So what would happen to my tsp once I leave federal service? Thank you
It would either stay there or you could roll it over into a Roth IRA.
Once you leave federal service, you can no longer contribute to TSP. You can leave it alone, or roll it over, or withdraw it and pay penalties if you aren't qualified to take it out. If you choose to leave your TSP alone, you will still be able to move the funds around and rebalance your account as you wish, as much as TSP will allow. My personal experience has been that TSP does not perform as well as other outside options, but if you want some of your money to stay in cash funds (G-fund) the TSP pays better than outside funds for that. If you need emergency funds, you may have problems accessing your TSP funds. I'm not sure if you can roll over just part of your TSP if you are no longer a federal employee.
NOTE: If you were military and part of your TSP contributions occurred where your pay was non-taxable (such as pay and TSP contributions while in a combat zone), the TSP will keep track of this, but it might not continue to be tracked if you roll over these non-taxable TSP funds. You might have to keep paperwork to prove part of your TSP funds are not taxable. I am sure it is this 'special' tracking is one reason the military TSP and civilian TSP cannot be mixed.
Roobah ,!
When I leave the military, what is the best thing for me to do with my contributions?
Great question and thank you for your service! It's a bit difficult for me to provide a recommendation without knowing more about your situation, but I'll try to create some content soon on some of your options.
WTF!!! I had no idea Coop from Garage Gym Reviews did these finance videos.
Im contributing 6% in the roth tsp because taxes could get higher later on the more the money increase in the roth (if that makes any sense?). I will probably increase the percent later on
There always a chance that later on taxes could be significantly lower then they are now though. Also if you retire without taking another job you will fall down the tax bracket and have to pay a lower overall percent.
Do you think its worth contributing to BOTH ROTH TSP and TRAD. TSP? I am unsure what my tax situation will be like at retirement and dont want to guess what Federal level changes may be made in the future.
Also, Does the income deduction of your TRAD. TSP contribution happen automatically via the W-2 or is it a manual itemized thing?
Good channel, I have passed it around to my buddies in Federal service and the Army.
Don't know where Cooper went, but I really enjoy this topic and helping people, so I'll give your questions a go.
So, in terms of taxes, your Traditional TSP is already deducted from your taxable income on your W-2 so you don't have to claim it. You just show a reduced taxable income. If you also have a Traditional IRA, then you have to identify this such that it is deducted from your taxable income. Most tax programs will ask 1)do you have an IRA?, 2) is it a Trad or ROTH, 3) if the answer to 2 is Trad, how much (thus it is deducted from your taxable income). If you say ROTH, there is no deduction and you pay your taxes now, but not later.
In regards to Trad vs ROTH, I believe there is really one most important time you should really be concerned with ROTH vs Traditional. This is a bit complicated but I'll try to explain. This important time is when you cross from the now 12% tax bracket to the 22% tax bracket. For most of us, this is the only time it is a huge difference between tax brackets. Just in case you don't understand taxes (I didn't for a long time), if you make $42,700 in taxable income, and are single, look up the 2018 tax brackets. You will pay no taxes on the first $9,525. You will pay 12% on the next amount up to $38,700. Then you pay 22% on the last amount over $38,700. So the math would look like this: (0x9,525)+(.12x(38,700-9,525))+(.22x(42,700-38,700)=0+3,501+880=$4,381 in total taxes. In other words, when you cross tax brackets, it is not like you all of a sudden pay 22% on all your income. So, if you are single and make $42,700 in taxable income, you could invest $4,000 in a Traditional IRA (vice a Roth IRA), and you avoid paying the 22% on this last $4,000, or $880. So instead of paying $880 now, you pay your taxes later, when your income maybe is lower and you only pay 12% in the future.
Hope this helps, GL, thanks for your service.
If I can contribute fully to Roth IRA ($6500) or TSP Roth ($6500) that is not matched because I am CSRS, it seems I might be better to contribute to Roth IRA, no? I can't see any advantage (except fund fees are lower in TSP) to contributing to TSP Roth. Am I missing something? (I'm just speaking of Roth options.) If you were going to put in $6500 (over 50) into a Roth IRA or Roth TSP which would you choose and why?
Great question. The TSP Roth and Roth Ira are very different and good on you for making the distinction. One of the great features of the TSP is its low fees, however, you will have more investing options and withdrawal options from an IRA. As far as saying which one I believe you should do, that would require me to know much more about your situation. Feel free to shoot me an email at cooper@fedretirementplanning.com if you want to talk more.
I feel like I should be working out in my home gym right now.
What is the total years of service needed to receive matched dollars by my employer?
APPBURY i believe 3
It depends. TSP three years. If you are under the Federal Reserve System, it is fully vested after five.
You can withdraw ROTH IRA contributions whenever you feel like it, there is no five year waiting period for CONTRIBUTIONS. A huge benefit over the Roth TSP. Also, any negatives the Roth TSP may have can be trounced knowing that you can roll it over to a Roth IRA : )
True, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. However, you may have to pay taxes and penalties on earnings in your Roth IRA under the age of 59.5 or 59.5 with less than 5 years contributing.
Given the fact that most Americans don't have anything saved for retirement, I would say that the ability to access money from your retirement account is a bad thing. That money needs to be locked away and people need to budget and save better. Shouldn't be looking at your retirement account as a potential Cash Cow for an emergency. Save an actual emergency fund
Now if I have $5,000 to invest, would it be better to invest it all at once or invest it randomly throughout the year?
If you work for the government and get matching (tsp) I would spread it out. Make that free money.
But if you invest early when you’re young I don’t see why that same way wouldn’t transfer to putting it in sooner in the year. 🤔🤷🏼♂️
Sounds like you just have 5k sitting around. If it’s just sitting around. Invest it.
Note. I’m not a cpa or advisor.
Make that 🤑🤑🤑🤑
@@justinjustin337 thanks. I started investing at the market crash and things have been looking up. I out about $10k into ETFs, dividend stocks, and some high growth stocks. I didn’t put any into my TSP though besides the initial $1k and some change that was already in it from a few years ago.
Khristian Delozier I would at least put in the 5% to get the match. The tsp is cheap to run too.
@@justinjustin337 thanks, Justin!
How can we write you Cooper?
+Willard S Cagle Hello Willard, you can email me at cooper@danefinancialllc.com
What never seems to be addressed regarding Roth VS Traditional is: If you invest $30,000 of your money in a Roth and it grows over time to $100,000, you only paid tax on $30,000. In a Traditional plan you don't pay tax on the $30,000 going in, but you DO pay tax on $100,000 coming out. Everyone seems to talk about it like you pay an equal amount of tax. In the long run, you will pay much less tax on a Roth plan as compared with a Traditional. As for me even if my tax bracket drops in retirement, I would rather pay 25% tax on $30,000, than 15% on $100,000. You can insert what ever tax bracket you are in, or expect to be in at retirement.
I assume that you are speaking about a IRA-ROTH, are the tax benefits the same within a TSP-ROTH as well as an IRA-ROTH?
The Tax Benefits are the same, but with some complications. If you leave your money in the TSP plan, when you retire, and you have a Traditional and a Roth Plan, when you are required to take your mandatory deductions from your Traditional plan (year in which you turn 70 1/2) they will take proportional amounts from both your Traditional and Roth plans. Remember, you aren't required to make withdrawals from your Roth IRA at age 70 1/2, only under the TSP do they automatically withdraw from both. You can get around that by transferring your Retirement funds into a IRA Roll-over Account. Then you would only have money withdrawn from your Traditional IRA account when you are required to take your mandatory withdrawals.
You also need to consider time as well; $1 now is worth more than $1 in 40 years. But yes, otherwise you are correct. For a ROTH you don't pay taxes in the future, to include its earnings.
This is actually faulty logic. If your money is going to grow at the same percentage either way, you will have the same final amount whether you are taxed at the beginning or the end. As a very simple example, let's say you invest $100 for 20 years and the tax rate is 25%. Let's assume constant returns of 10% per year for simplicity. With a tax deferred plan, you will see $100 * (1.10)^20 * 0.75. If you pay taxes upfront, you will see 0.75 * $100 * (1.10)^20. This is the exact same equation, just in a different order. For a calculation like this, it doesn't matter if you take away a percentage at the beginning or the end; you end up with the same result either way. The reasons to choose a Roth vs. traditional plan depend on the differences mentioned in this video and whether you think the tax rate will be higher or lower in the future.
That is very true. There is also a hidden assumption that you save or invest the money that you save from not paying taxes now. If you don't pay taxes on that money, and you just spend it, you are going to be worse off in the end.
Can I simply roll my Roth TSP into a Roth IRA when I retire?
Yes, you can.
You can also roll over a traditional TSP into a Roth IRA but of course you would have to pay taxes to do so.
I'm left more confuse watching this video
Mostly agree, but definitely disagree on a couple. First, TSP is the best place to borrow money as long as you do it responsibly. The rate is the best and they also limit the amount. Second, Leaving some or even all money in TSP at after retirement may not be a bad idea if you know how to invest. Albeit limited, there are still choices of some funds you can mix and match. No one can beat the investment expenses.
I currently work for the Government- which one HAHA! and by that you already know Nevertheless. I want/need to invest into TSP. I need to do the math of 5% of my bi-weekly contribution - correct? That 5% I want to go to the G-Fund: I'm not much for risk but I want to invest perhaps another 5% and or split it 2% into one investment/3% into another.With that being said; what ever I make off the split investment moving that into the G-fund, still leaving the original 2%/3% there. In other word taking the fizz from the Pespi & putting it into the safe box. Not sure of the closing date to invest but it is soon.
If you are really interested in ensuring you maintain a balanced investment portfolio, better to invest all your money into one of the L-funds that is appropriate for your retirement age (L-income if you are ready to retire, L-2050 if you aren't going to retire for 30 or so years). If you invest in L-funds, then ONLY invest in L-funds and nothing else (that's how they are intended to be used -- park it and forget it.) Do not mix S, C, I, or G, F funds with L-funds. Do either-or not both. Your matching funds will be balanced and distributed exactly the same as your own funds.
Al Rocky Whoa!! Thank You , I am at the age of retirement, didn't make a wise choice, So can I put my 5% in the G Fund and another 5% in the L? Then my next question would be what would be an an over all decent investment outside of my TSP? If possible not using a broker?
Roobah Whoa!! Thank You , I am at the age of retirement, didn't make a wise choice, So can I put my 5% in the G Fund and another 5% in the L? Then my next question would be what would be an an over all decent investment outside of my TSP? If possible not using a broker?