Should I Roll Over My TSP?
If you’re leaving federal service or retiring from the military, you have probably considered this question, and it is important to be aware of all your options. The TSP will allow you to stay in the plan after you separate from service, roll over your balance to a Traditional IRA or Roth IRA, or take a taxable distribution. Throughout your career, you have likely heard the TSP praised for its generous match, low fees, and simple investments. So why would anyone choose to roll over their TSP into an IRA?
The TSP was created as a vehicle for federal employees to build wealth. While they are working, employees can defer a portion of their pay, receive a match, and invest in funds established to match market growth and provide for a balanced portfolio. However, many people’s goals change as they draw near retirement. They have already accumulated wealth and not only want to see it grow but also want to keep it preserved during market volatility. They want their retirement savings to supplement pensions and social security income, ensuring they withdraw from the right place at the right time. They want to take advantage of other strategies to reduce taxes. They want their spouse and, eventually, their kids to receive the remainder of their savings in an efficient and tax-friendly manner.
Finally, they realize the importance of making the right decision, and they value the help of an experienced financial professional. Often, an IRA or Roth IRA is the best account to accomplish these goals.
Why roll over your TSP to an IRA or Roth IRA?
Ongoing comprehensive advice and management from experienced financial professionals.
The advisors at SCO Wealth Management know the TSP and understand the needs of federal employees as they approach retirement. Please use us as a resource for your questions or schedule a complimentary review of your retirement plans.
The TSP was created as a vehicle for federal employees to build wealth. While they are working, employees can defer a portion of their pay, receive a match, and invest in funds established to match market growth and provide for a balanced portfolio. However, many people’s goals change as they draw near retirement. They have already accumulated wealth and not only want to see it grow but also want to keep it preserved during market volatility. They want their retirement savings to supplement pensions and social security income, ensuring they withdraw from the right place at the right time. They want to take advantage of other strategies to reduce taxes. They want their spouse and, eventually, their kids to receive the remainder of their savings in an efficient and tax-friendly manner.
Finally, they realize the importance of making the right decision, and they value the help of an experienced financial professional. Often, an IRA or Roth IRA is the best account to accomplish these goals.
Why roll over your TSP to an IRA or Roth IRA?
- Access to a broader range of investments, including those better suited to preserve wealth and provide retirement income.
- Ability to separate investments and specify the timing and location of withdrawals rather than being subject to the dreaded sequence of returns risk.
- Better support for tax strategies using Roth conversions, Qualified Charitable Distributions, and Donor Advised Funds.
- Preferred tax structure for kids or other second-in-line beneficiaries inheriting retirement assets.
Ongoing comprehensive advice and management from experienced financial professionals.
The advisors at SCO Wealth Management know the TSP and understand the needs of federal employees as they approach retirement. Please use us as a resource for your questions or schedule a complimentary review of your retirement plans.