Reallocating a TSP

I am thinking about moving my TSP but looking for options that work for me. Is USAA a Fiduciary.

Please sign-in to reply

7 REPLIES

None of my business, but reconsider leaving the TSP.   It's the top 401K in the world.   Over time, you will outperform any other group.  Depending on your age, you can also convert directly from the normal 401K into an Annuity, or keep part of your account plus an Annuity.   Once you retire, you can't make contributions, but you can still transfer into it from a qualifying IRA.   The biggest bad aspect is the RMD (Required Minimum Distribution), but that stems from the IRS, not the TSP: the IRS requires you to take distributions beginning the year after you hit 70.5 years of age.   Don't bother trying to fight it, because you can't.   The RMD must be withdrawn from TSP and ALL OTHER retirement sources.   You can leave it there every year, but they will recompute [based on your age, statistical average life expectancy, and amount in the axcount] in December and issue a lump sum in January.   I hate that!!!   Every year I'm forced to reduce my balance by the RMD....from TSP, and the other retirement accounts I have.   Bummer, but the IRS doesn't want us to sit on a nest egg forever.   As an example of performance, my account for the 12 months ending 30 November 2021 made 12.65%; the return is based on how you split your account between F, C, G, S, and I accounts.   At my age, more than 50% of my account is in the G account [government bonds] for security; the rest is divided between the others.   My return would have been higher if only in the stock market, small business, and international vendor accounts, but it's advisable to hoard some in bonds to preserve capital.   The only time the TSP "underperformed" was under Trump when the overall market forced losses.   You can find annual performance rates on tsp.gov even before opening your account; nonmembers can see that data.   Your choice, but you'd have to have a good reason to get out of the TSP.   I'd be happier if the IRS didn't force me to take a few thousand every year!   It's a good idea to wander around inside the website, looking at potentials how to manage your account over time.    Good luck and best wishes.  

There is one thing you should know about leaving your money in the TSP when you reach the age at which you are required to take a Required Minimum Distribution (RMD) and you are married to someone who is more than 10 younger than yourself.

If you are married to someone more than 10 years younger than yourself IRS allows you to reduce the amount of your RMD.  However  TSP calculates the amount of the RMD and automatically withdraws it from you account without allowing you to reduce the amount.

Stop giving incorrect information/advice.   The IRS rule for RMD amount is based on on your statistically normal life expectancy tables, your age, and the amount in your TSP account.   (The exception is if you have your account [all, or a portion] in a Metlife annuity.   An annuity can't be affected or changed after it begins.).    Just to be sure, I enquired about your stateent to the TSP help desk.  I only pasted the first part of the reply.       This is the reply:      

TSP reply:

Sent: 12/13/2021 9:26 AM
Subject: Re: Other - Comment

This responds to your inquiry of December 10, 2021, concerning your Thrift Savings Plan (TSP) account. You asked if your required minimum distribution (RMD) can be decreased if your spouse is at least 10 years younger than you.

Your RMD amount for is calculated by taking your prior year-end account balance and dividing it by the distribution period from the Internal Revenue Service (IRS) Uniform Lifetime Table corresponding to your age at the end of the year in question.

It does apply if you are selecting an annuity with MetLife as described below.

If you choose an annuity that provides for a joint annuitant other than your spouse, the joint annuitant must be either a former spouse or someone with an insurable interest in you. This means that the person is financially dependent on you and co

I made the mistake of letting a so-called financial advisor associated with my (now former) credit union convince me to move my military TSP into various mutual funds after I retired.  When I made that rollover, I lost the tax-exempt withdrawal aspect of the contributions I made while serving in a combat zone.  I asked the advisor specifically about that issue and he said it wouldn't happen.  Of course, the rollover couldn't be undone at that point.  Strike 1 (probably also counts as Strike 2). 

 

The funds' performance wasn't bad, but despite claims that we'd have a yearly review on portfolio allocation I never heard from the advisor for a couple of years unless he had something new he wanted to sell.  Strike 3.   After a couple more years of not hearing anything we assumed he no longer cared, and rolled everything over to TD Ameritrade.

Just my opinion, but TSP is run better than just about any other retirement program out there. I retired years ago, so have not been able to invest further in my account, but I keep it because of the simplicity and low cost. Look around, but I think you'd do better to keep it where it is.


@ wrote:

 I retired years ago, so have not been able to invest further in my account,


If you have an IRA or other qualifying account, you can roll that into TSP.  I did that several years ago and it worked fine.

 

 

@Gigantes, Hello, Thanks for considering USAA!

Give our Specialists a call at 210-531-8722 to discuss what options are best for you. 

Have a great day! 

~ Lori C