I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
Rollover process is a little complicated if you have tax-free contributions (ie contributions Soldiers make when they're in combat zone) ---I'm dealing with this right now. TSP sent me a check (FBO) instead of to Vanguard. Now the clock is ticking to get the money out of my hands and into an IRA conversion account.
You don't have to use your entire balance to purchase the annuity. You can use as much or as little as you want. This way, you can have a guaranteed income without losing the ability to invest and grow a portion of your savings while still keeping a rainy day fund that you can make large withdrawals from.
Before any federal employee leaves the tsp for something else please ask the person asking you to do so one what is their commission what are they getting out of this to how much is this new fund a IRA going to charge for administration tsps rates are $0.45 per thousand dollars see if you can beat that
I’m a federal employee retiree who rolled over to an IRA with no regrets & have maximum flexibility & no longer have to deal with the TSP bureaucracy, rules & regulations.
Please keep in mind 9 states that normally have income taxes (e.g. NY, Pennsylvania) DO NOT tax the traditional TSP as they consider part of your civil servants pension. If you move the TSP money into an IRA at say Vanguard, Fidelity, etc... you will lose this special tax break and will now have to pay state taxes on the money when withdrawn. This is something you should be aware of before you transfer any monies out of the TSP.
@@Rbecker26 they most likely treat monies rolled INTO the TSP as separate and not as monies earned as a federal civil servant. My advice would be to not to do that and simply leave the monies in the TSP if you reside in one of these states.
Buying an annuity you can die a few days after retirement then you lose it all. Best to leave it alone or transfer some or all to an IRA. That way if you roll it over, you might delay the tax, else if you do a withdraw of say $1,000, you're taxed 20% and only get $800. Most of use won't earn enough to pay taxes if and when we file so why give up the 20% upon withdrawal, when we can earn interest on it with a good money market savings account. However, remember TSP has much lower fees than non-federal organizations. My thought, roll over what you plan to use to an IRA then do distributions as needed or required. pay taxes when you file if you do own any, otherwise, don't.
Very true and the most important thing to know if you do buy an annuity while in the TSP, buy it today with all your funds, die tomorrow and its all gone, very dangerous and not clear when some buy into these.
i thank you for this informative video, but i have concerns regarding taxes/monthly withdrawals in retirement....every withdrawal, the government takes the 20% for taxes...how do the federal taxes work with an IRA ?
If it's a roth IRA there will be no federal taxes, if it's a traditional IRA the government will tax it the same as income tax. Google "2023 Income Tax Bracket" to see those amounts.
Your video is a wealth of Info. There is so much misguidance out there. I'm 50 Yeats old and still a federal worker and hit 30 years of creditable service Sept 21, 2021. What good options do I have if I walk away at the end of this year?
Can a 20 year retired military member who receive disability compensation contribute portion of their disability compensation into the TSP? Since TSP wont allow retirement pay…what would be a better option roll it into robin-hood or fidelity and be able to contribute from there monthly?
Can this all be done on the TSP website now, or do we still need to fill out that TSP 70 form? When I open an IRA with another broker can it be a Traditional IRA or does it need to be a Rollover IRA and is The Rollover IRA only for transferring the Traditional 401k, would I also need to open a Roth IRA as well?
So ive been trying since early 2021 to rollover my funds and the TSP website screwed up my account links so I can't submit any withdrawals. Did not lock my account but just disabled the hyperlinks. The first rollover attempt expired and I got a rejection notice. I called in and they mailed me an incomplete packet 16 of 18 pages from what they said, and when I submitted what they gave me they gave me several different excuses why they couldn't accept it and said all they could do was mail me another packet but have not been able to restore my account. They have no 3rd method to getting your account rolled over from what their supervisors said. And i'm so frustrated that I'm considering getting a financial lawyer involved. Any suddgestions?
@@Really-Know I've successfully rolled over funds from a TSP Roth account and TSP traditional account to Fidelity. Here's what I did and the best thing I can recommend to you. Fill out TSP form 99. Give the form to your employer's 401k company and let them handle getting the money transferred. The 401k wants your money so let them work for you. I didn't have to make one call or email to TSP, I only directed Fidelity on what I wanted and they did it.
@@TimWolffe yeah I tried that going on attempt 3 and TSP keeps rejecting for inconsistent reasons. They have failed to get my account links to work to fill a T-99 and are content to snail mail the forms but refuse to get a tracking number for the packet. So anyone could easily intercept it well before it gets to me. They also refuse to overnight the documents or any other possible solutions. Could it possibly be discriminatory? Oh and they continuously deny having any contact with my employer 401K and my employer 401K has repeatedly reached out to them.
I had watched a different video and the guy was explaining the difference between a transfer versus rollover. Any insight into this? It sounds like I may be on the hook for the 20% taxes on the rollover and truing up that amount until I prove funds were moved within the 60-day time limit. THEN the money will be reimbursed. I'm trying to move funds out of my TSP and into my Fidelity this week.
I have never heard of anyone having to front the taxes and then getting reimbursed if the rollover is done properly. Take your TSP rollover paperwork into a fidelity bank and hand it to them. That is what I did and the process went seamlessly for me
i want to roll over to my current 401k but the lady on the phone is telling me they make the check payable to me which is NOT want i want because it will make it a taxable event. I want them to make the check payable to my current employer and since im married the lady said it be made payable to both my wife and I. so there another way to go about this?
@@joeydelmarsjr.646 Fill out form TSP 70 and give it to your current employer 401k company. They should take care of the transfer, you shouldn't even have to talk to the TSP yourself. However, if they distribute the check directly to you, you have 60 days to deposit it into your new 401k to avoid you can be charged interest and/org penalties.
Can u roll over TSP to a Roth IRA set up through a bank? I remember in regards to retirement account the rule of thumb is once you don't have the money in your possession u avoid the fee?!?!
Good question: No, it's classified as a "transfer" or "rollover" not as a "contribution". Therefore, you are still able to contribute $6k (or $7k if age 50+) that year.
I would start withdrawing. It's your money you worked hard for and the longer you wait the less chance you give yourself to use it. I would annually withdraw 4%-6% of the total you have in the TSP.
@@TimWolffe oh yeah you’re right, I miss read it. So I could start withdrawing say 5000 every month after I retire from the military, after my 20 years?
Is there any sort of time limit as to when I can move my TSP to an IRA? I plan to retire and am not ready to move the TSP until later if that is okay. Thanks!
You can roll it over as soon as you separate from federal employment or any time after that as long as you currently aren't working for the federal government.
@@TimWolffe How long does it take TSP to recognize an employee as retired? Retired 9/1/22 and trying to direct rollover to my non tsp ira. No option is available to do this via the website and thriftline won’t provide an email answer to the question as they feel it is claim specific. Tried to call with zero success on 3 attempts.
surprised you didn't mention the ability of rolling roth tsp to roth ira then withdrawing contributions at any age. This fact propels me to invest heavily in the TSP, cause I know I can withdraw it fairly easy if I want to once I leave military and roll it over to an roth ira
Only after age 59.5 without penalty. Before that there will be a penalty if you withdraw earnings. You can withdraw your own contributions at any time without penalty after your Roth IRA has been open for 5+ years
There are 5 funds in the TSP: C, S, I, G and F. However there are a number of "lifecycle" funds you can invest in as well. But the lifecycle funds are just different allocations of the C, S, I, F, and G.
Great video. When it comes to TSP though, don't use the word Roll Over because that means that they send the money to you. Usee the word Transfer. Also, you cannot transfer TSP to Roth. You have to transfer TSP to Traditional IRA to Roth IRA
Thank you Brotherman, you are a blessing. I appreciate your knowledge and support. Time to roll it over to a Rollover IRA and sell covered calls. I do have a small question. I am 59 1/2 and I roll my entire TSP into the rollover IRA with Charlie Schwab. When am I taxed? When I move it from the IRA to my bank account? I also heard that when you trade stocks and options from your IRA, you dont pay the 30% capital gains tax. Is this true? Thanks again, you rule.
Hey Henry, great questions. You will not be taxed during the rollover if you have a traditional TSP and roll it over to a "traditional" IRA or sometimes called "rollover" IRA. Same if you have a Roth TSP and roll it over to a Roth IRA, no taxes due. The only reason you would owe taxes after a rollover is if you went Traditional TSP to Roth IRA (typically not practical). So you are correct in that you won't be taxed until you withdraw the money from your IRA to your bank account because at that point the money is no longer in a qualified retirement account (TSP, IRA, 401k etc.) Your second question about capital gains tax- First just a side note... there is not long term capital gains tax rate above 20%. If you google "long term capital gains tax rates 2022" you'll find yours based off your income. Also, there is no relation to capital gains tax and retirement accounts, retirement accounts do not pay capital gains- you can buy and sell stock all day with a retirement account and pay no capital gains tax. You will however owe income tax when you withdraw the money to your bank account like we talked about earlier.
I’m retiring the government service and I’m 66. I need the money to pay my closing cost of the the house I am buying…how do I maneuver my money without heavy taxation…please advise…
Many companies can compete nowadays. The low fee benefit of the TSP is a thing of the past. Vanguard, Fidelity, and Schwab all have the same fees as the TSP
@@Mary-oc5ns There are 5 funds in the TSP: C, S, I, G and F. However there are a number of "lifecycle" funds you can invest in as well. But the lifecycle funds are just different allocations of the C, S, I, F, and G.
Check out more videos here ➡️ ua-cam.com/users/timwolffe
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
@Christina-Gisela That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@Christina-Gisela I will give this a look, thanks a bunch for sharing.
Bot Alert!
Yes .... "Anything you do with the federal government is harder than it has to be"
Even though I won't use this until years down the line. This is a gem of information to know for retirement involving the TSP.
Glad you got something out of this video!
Very informative, thank you.
Thanks for this video, I knew it would basically be a trap to do a large lump sum withdrawal.
Rollover process is a little complicated if you have tax-free contributions (ie contributions Soldiers make when they're in combat zone) ---I'm dealing with this right now. TSP sent me a check (FBO) instead of to Vanguard. Now the clock is ticking to get the money out of my hands and into an IRA conversion account.
Well done video, thank you
Thanks Don!
You don't have to use your entire balance to purchase the annuity. You can use as much or as little as you want. This way, you can have a guaranteed income without losing the ability to invest and grow a portion of your savings while still keeping a rainy day fund that you can make large withdrawals from.
Before any federal employee leaves the tsp for something else please ask the person asking you to do so one what is their commission what are they getting out of this to how much is this new fund a IRA going to charge for administration tsps rates are $0.45 per thousand dollars see if you can beat that
The Fidelity 500 index fund (C fund equivalent) cost $0.15 per thousand dollars. Pay 67% less in fees for leaving the TSP sounds pretty great
I’m a federal employee retiree who rolled over to an IRA with no regrets & have maximum flexibility & no longer have to deal with the TSP bureaucracy, rules & regulations.
Please keep in mind 9 states that normally have income taxes (e.g. NY, Pennsylvania) DO NOT tax the traditional TSP as they consider part of your civil servants pension. If you move the TSP money into an IRA at say Vanguard, Fidelity, etc... you will lose this special tax break and will now have to pay state taxes on the money when withdrawn. This is something you should be aware of before you transfer any monies out of the TSP.
So as long as I’m in a state that doesn’t do state income tax, I’m good?
Would I be able to rollover the money into an IRA, and then when I'm ready to withdrawal, rollover the money back into the tsp?
@@Rbecker26 they most likely treat monies rolled INTO the TSP as separate and not as monies earned as a federal civil servant. My advice would be to not to do that and simply leave the monies in the TSP if you reside in one of these states.
Great video!!
Thanks!!
Is that you tv with the flames going in the background?
It's an electric fireplace.
Great info. Simple
Wow! Great job explaining TSP strategies… SUBSCRIBING!!
Thanks for the support!
Buying an annuity you can die a few days after retirement then you lose it all. Best to leave it alone or transfer some or all to an IRA. That way if you roll it over, you might delay the tax, else if you do a withdraw of say $1,000, you're taxed 20% and only get $800. Most of use won't earn enough to pay taxes if and when we file so why give up the 20% upon withdrawal, when we can earn interest on it with a good money market savings account. However, remember TSP has much lower fees than non-federal organizations. My thought, roll over what you plan to use to an IRA then do distributions as needed or required. pay taxes when you file if you do own any, otherwise, don't.
Very true and the most important thing to know if you do buy an annuity while in the TSP, buy it today with all your funds, die tomorrow and its all gone, very dangerous and not clear when some buy into these.
it would help to tell people what tsp stands for.
TSP stands for Thrift Savings Plan.
If you’re here for info about the TSP, you already know what it stands for.
Could you/should you rollover while still in service?
i thank you for this informative video, but i have concerns regarding taxes/monthly withdrawals in retirement....every withdrawal, the government takes the 20% for taxes...how do the federal taxes work with an IRA ?
If it's a roth IRA there will be no federal taxes, if it's a traditional IRA the government will tax it the same as income tax. Google "2023 Income Tax Bracket" to see those amounts.
Your video is a wealth of Info. There is so much misguidance out there. I'm 50 Yeats old and still a federal worker and hit 30 years of creditable service Sept 21, 2021. What good options do I have if I walk away at the end of this year?
Are you a special category employee?
Can a 20 year retired military member who receive disability compensation contribute portion of their disability compensation into the TSP? Since TSP wont allow retirement pay…what would be a better option roll it into robin-hood or fidelity and be able to contribute from there monthly?
If you retire and roll over your TSP to an IRA (Say with Merrill), you can still contribute to the funds if you got another job correct?
You can continue to contribute to your IRA, which does not have the same funds at TSP but very similar ones.
Can this all be done on the TSP website now, or do we still need to fill out that TSP 70 form? When I open an IRA with another broker can it be a Traditional IRA or does it need to be a Rollover IRA and is The Rollover IRA only for transferring the Traditional 401k, would I also need to open a Roth IRA as well?
So ive been trying since early 2021 to rollover my funds and the TSP website screwed up my account links so I can't submit any withdrawals. Did not lock my account but just disabled the hyperlinks.
The first rollover attempt expired and I got a rejection notice. I called in and they mailed me an incomplete packet 16 of 18 pages from what they said, and when I submitted what they gave me they gave me several different excuses why they couldn't accept it and said all they could do was mail me another packet but have not been able to restore my account. They have no 3rd method to getting your account rolled over from what their supervisors said. And i'm so frustrated that I'm considering getting a financial lawyer involved. Any suddgestions?
Where are you trying to rollover your TSP to? An IRA or new employer 401k?
@@TimWolffe new employer 401K
@@Really-Know I've successfully rolled over funds from a TSP Roth account and TSP traditional account to Fidelity. Here's what I did and the best thing I can recommend to you. Fill out TSP form 99. Give the form to your employer's 401k company and let them handle getting the money transferred. The 401k wants your money so let them work for you. I didn't have to make one call or email to TSP, I only directed Fidelity on what I wanted and they did it.
@@TimWolffe yeah I tried that going on attempt 3 and TSP keeps rejecting for inconsistent reasons. They have failed to get my account links to work to fill a T-99 and are content to snail mail the forms but refuse to get a tracking number for the packet. So anyone could easily intercept it well before it gets to me. They also refuse to overnight the documents or any other possible solutions. Could it possibly be discriminatory?
Oh and they continuously deny having any contact with my employer 401K and my employer 401K has repeatedly reached out to them.
I had watched a different video and the guy was explaining the difference between a transfer versus rollover. Any insight into this? It sounds like I may be on the hook for the 20% taxes on the rollover and truing up that amount until I prove funds were moved within the 60-day time limit. THEN the money will be reimbursed. I'm trying to move funds out of my TSP and into my Fidelity this week.
I have never heard of anyone having to front the taxes and then getting reimbursed if the rollover is done properly. Take your TSP rollover paperwork into a fidelity bank and hand it to them. That is what I did and the process went seamlessly for me
i want to roll over to my current 401k but the lady on the phone is telling me they make the check payable to me which is NOT want i want because it will make it a taxable event. I want them to make the check payable to my current employer and since im married the lady said it be made payable to both my wife and I. so there another way to go about this?
You are trying to roll over a previous employer 401k to your current TSP?
@@TimWolffe no the opposite
@@joeydelmarsjr.646 Fill out form TSP 70 and give it to your current employer 401k company. They should take care of the transfer, you shouldn't even have to talk to the TSP yourself.
However, if they distribute the check directly to you, you have 60 days to deposit it into your new 401k to avoid you can be charged interest and/org penalties.
Is there a limit to how much you can roll over into a Roth IRA?
No
Can u roll over TSP to a Roth IRA set up through a bank? I remember in regards to retirement account the rule of thumb is once you don't have the money in your possession u avoid the fee?!?!
You can rollover a Roth TSP to any Roth IRA and a Traditional TSP to any Traditional (or "rollover) IRA
I did 14 years and got out. If i roll over from my TSP to an IRA can i continue to contribute to it until retirement age?
Once you separate service you can no longer contribute to the TSP under any circumstance
You forgot the other negative for the TSP. If you are moving money/shares between funds sometimes it takes a full day to complete the transaction.
i am taking 1 year off to travel. i am 35 what should i do with my pension?
So why would we wanna keep our money in it if we can’t add money to it
If I separate from federal employment and l roll TSP over to a Roth IRA, it doesn’t impact my contributions for that year?
Good question: No, it's classified as a "transfer" or "rollover" not as a "contribution". Therefore, you are still able to contribute $6k (or $7k if age 50+) that year.
I’m 67 yoa, is it wise to sart taking money out of my TSP. And, if so, should I take only the amount for life expectancy?
I would start withdrawing. It's your money you worked hard for and the longer you wait the less chance you give yourself to use it. I would annually withdraw 4%-6% of the total you have in the TSP.
I read that the max you can withdraw every 30 days is 1000$
$1000 is the minimum you can withdraw
@@TimWolffe oh yeah you’re right, I miss read it. So I could start withdrawing say 5000 every month after I retire from the military, after my 20 years?
@@claeslind9532 Sure can
Is there any sort of time limit as to when I can move my TSP to an IRA? I plan to retire and am not ready to move the TSP until later if that is okay.
Thanks!
You can roll it over as soon as you separate from federal employment or any time after that as long as you currently aren't working for the federal government.
@@TimWolffe How long does it take TSP to recognize an employee as retired? Retired 9/1/22 and trying to direct rollover to my non tsp ira. No option is available to do this via the website and thriftline won’t provide an email answer to the question as they feel it is claim specific. Tried to call with zero success on 3 attempts.
@@TimWolffe is this still the case, though you could do in service rollovers
surprised you didn't mention the ability of rolling roth tsp to roth ira then withdrawing contributions at any age. This fact propels me to invest heavily in the TSP, cause I know I can withdraw it fairly easy if I want to once I leave military and roll it over to an roth ira
If I transfer it to a roth ira can I withdraw it from there without penalties?
Only after age 59.5 without penalty. Before that there will be a penalty if you withdraw earnings. You can withdraw your own contributions at any time without penalty after your Roth IRA has been open for 5+ years
If you retire at 55 with 38 years service, don't I get an early withdrawal penalty?
Not if you are retiring from federal employment
Rules have changed
What rules have changed?
Would I be tax even though it was a Roth?
If you're asking about rolling over a Roth TSP to IRA as long as you roll it over to a Roth IRA your Roth TSP funds will not be taxed.
Rollover or Transfer?
Aren’t there more than 5 TSP funds now?
There are 5 funds in the TSP: C, S, I, G and F. However there are a number of "lifecycle" funds you can invest in as well. But the lifecycle funds are just different allocations of the C, S, I, F, and G.
tsp 99 replace tsp 70, dont think 70 is even usable
vanguard???
Great video. When it comes to TSP though, don't use the word Roll Over because that means that they send the money to you. Usee the word Transfer. Also, you cannot transfer TSP to Roth. You have to transfer TSP to Traditional IRA to Roth IRA
You can, I transfered my Roth TSP to Roth IRA without going into a traditional IRA first.
I just need 5K from my TSP just to pay off my car 😂
Thank you Brotherman, you are a blessing. I appreciate your knowledge and support. Time to roll it over to a Rollover IRA and sell covered calls.
I do have a small question. I am 59 1/2 and I roll my entire TSP into the rollover IRA with Charlie Schwab. When am I taxed? When I move it from the IRA to my bank account?
I also heard that when you trade stocks and options from your IRA, you dont pay the 30% capital gains tax. Is this true? Thanks again, you rule.
Hey Henry, great questions. You will not be taxed during the rollover if you have a traditional TSP and roll it over to a "traditional" IRA or sometimes called "rollover" IRA. Same if you have a Roth TSP and roll it over to a Roth IRA, no taxes due. The only reason you would owe taxes after a rollover is if you went Traditional TSP to Roth IRA (typically not practical). So you are correct in that you won't be taxed until you withdraw the money from your IRA to your bank account because at that point the money is no longer in a qualified retirement account (TSP, IRA, 401k etc.)
Your second question about capital gains tax- First just a side note... there is not long term capital gains tax rate above 20%. If you google "long term capital gains tax rates 2022" you'll find yours based off your income. Also, there is no relation to capital gains tax and retirement accounts, retirement accounts do not pay capital gains- you can buy and sell stock all day with a retirement account and pay no capital gains tax. You will however owe income tax when you withdraw the money to your bank account like we talked about earlier.
@@TimWolffe Thank you Tim, your videos are the best on UA-cam. I will send more viewers to your channel.
Many blessings
Henry
🔥
I’m retiring the government service and I’m 66. I need the money to pay my closing cost of the the house I am buying…how do I maneuver my money without heavy taxation…please advise…
Hey Hondo, couple of questions- Is the only money you have to pay for the closing costs in your TSP? How much is the closing costs?
MRA is AGE 56 for regular fed with 20 yrs service.
Keep it in TSP. They can’t compete with the low administrative costs.
Many companies can compete nowadays. The low fee benefit of the TSP is a thing of the past. Vanguard, Fidelity, and Schwab all have the same fees as the TSP
check your annuity facts.... very far off
If I'm much older a traditional IRA is probably best
ANYONE who recommends leaving the TSP would be suspect to me. a CON ARTIST maybe.
lol... on what analytical data are you basing this off of?
Absolutely wrong. Please evaluate the information you are giving out.
What is wrong?
Aren’t there more than 5 TSP funds now?
@@Mary-oc5ns There are 5 funds in the TSP: C, S, I, G and F. However there are a number of "lifecycle" funds you can invest in as well. But the lifecycle funds are just different allocations of the C, S, I, F, and G.