Moving TSP money from G Fund to...

[Roguejimmer]

I'm about 3-6 years away from retiring from the USPS. I've been contributing to the TSP program the entire time, all into the C Fund. Just prior to the presidential election, I moved all the money to the G Fund...duh! It's safe there, but it won't grow much.

I had a free consultation with an Edward Jones agent a couple of months ago about what to do with my TSP money, now. He said I should watch for the stock market to back down to ~19,200, and then move the TSP money into an L Fund (L 20, L30), because the market "is in a bubble". Well, the bubble(?) seems to be growing nicely, and I'm thinking I might have to reconsider the 19,200 marker. I have another appt with the ER guy, but I'd really appreciate any thoughts from the forum members on this, especially if they are familiar with the TSP fund options.

Having said this, I saw an older thread here regarding moving money from EJ to Vanguard low cost index funds. Yeah, I just read Buffets comments on this passive index funds strategy. Very interesting. I must admit I'm pretty wet behind the ears on all this, so bear with me, please. Thanks.

 

[Van-Guard23]

It's a bit difficult to provide any cogent advice regarding your TSP account when I am not familiar with your complete financial picture. What is your current Asset Allocation (i.e. ratio of stocks/equities to fixed income...is it 60 stocks/40 fixed income)....and what is your desired Asset Allocation? This should go a long way towards what you may need to do with your TSP account. Treat your assets as a whole (i.e. taxable accounts and tax-advantaged accounts should be considered for your AA) and be aware of tax efficiency of your investments.

By the way, I would hazard a guess most ER forum members consider themselves Bogleheads (see www.bogleheads.org) and prefer investing in low cost well diversified mutual funds/ETFs and would more than likely recommend severing ties with Edward Jones...hope you haven't invested your hard earned money with them.

 

[DrRoy]

Run, do not walk, from Edward Jones or other FA that will take a % of assets. Never try to market time again. Determine what AA you are good with and DCA into it over a period of months.

 

[target2019]

Once, I listened to the EJ shtick, and received a gift card. After a while I had to tell him there was no way I wanted to pay an ongoing fee. I was just taking the gift card. On the way out I recall him saying, "I know you'll be back in the future."

That guy still sends warning letters about bubbles and why I need him. There was a pre-election letter I should have saved for this post. Incredibly poor English, misspelled words, and bad advice.

 

[Philliefan33]

Why are you in a hurry to move out of the TSP?

 

[target2019]

Good point. I might move into TSP if available.

 

[jazz4cash]

In OP's position, I would gradually move into the L2020 fund (e.g. 10-15% per month). If the market dips, move bigger chunks. Direct new money to the L fund also. The TSP funds are consistent with Buffet and Boglehead advice.

I didn't see anyplace that OP wants to move out of TSP. Even the EJ guy told him to stick with TSP.

 

[donheff]

Like others it is hard to know what you should do without understanding your entire situation. From what you said it sounds like ERJ holds your taxable investments and the TSP holds your tax deferred. You should consider managing your holdings as a single portfolio. Move the ERJ funds to a low cost set of indexes (probably all equities unless it it far larger than TSP) at Vanguard, Fidelity or Schab. The adjust your TSP holdings to achieve your desired AA. DW and I have sufficient other accounts that I am able to keep my TSP entirely in G - that is the safest fund on the planet. I keep my entire taxable in equity indexes (low taxes) and pull expenses from there. If I have to pull expenses from those taxable equities during a downturn I plan to buy an equivalent amount of C funds in TSP on the same day to effectively convert the withdrawal to a cash liquidation. I will keep the TSP throughout retirement. Wouldn't dream of rolling it over.

 

[lp9999]

In OP's position, I would gradually move into the L2020 fund (e.g. 10-15% per month). If the market dips, move bigger chunks. Direct new money to the L fund also. The TSP funds are consistent with Buffet and Boglehead advice.

I didn't see anyplace that OP wants to move out of TSP. Even the EJ guy told him to stick with TSP.

Ll

 

[Roguejimmer]

Sorry I wasn't more clear. I don't think it would be wise a this point to move my money out of TSP. I'm asking about moving the money within TSP. EJ has not gotten any money out of me. I have another free talk with them if I want. He gave me some sort of expenses sheet to fill out. Doesn't seem like much they could do at this point with my money being in TSP. Glad I came here.

I didn't realize I could stay in TSP after retirement. That's how naïve I am. Thanks donheff! For what it's worth I have about $300K in the G Fund, which is the totality of my TSP savings.

A TSP link for those unfamiliar with it.
https://www.tsp.gov/InvestmentFunds/FundsOverview/index.html

 

[nun]

TSP is a great place to be. I would move into L2020 fund over the next year or so and sit back and enjoy your retirement.....IMHO the only better place to have your retirement obey than Vanguard is in TSP.


Sent from my iPhone using Early Retirement Forum

 

[zinger1457]

I didn't realize I could stay in TSP after retirement. That's how naïve I am. Thanks donheff! For what it's worth I have about $300K in the G Fund, which is the totality of my TSP savings.

The TSP is a very good place to keep your money but you'll also want to educate yourself on the TSP withdrawal options. It's definitely the weak point of the TSP plan and probably the number one reason people transfer their money out after retirement. The TSP seems to be making more of an effort to retain members and has proposed changes to the withdrawal options but change comes slowly.

 

[Roguejimmer]

The TSP is a very good place to keep your money but you'll also want to educate yourself on the TSP withdrawal options. It's definitely the weak point of the TSP plan and probably the number one reason people transfer their money out after retirement. The TSP seems to be making more of an effort to retain members and has proposed changes to the withdrawal options but change comes slowly.

Thanks to all the advice thus far. I will keep my eyes open for any TSP retirement seminars that come available through the USPS.

How are the TSP withdrawal options the weak point? Taxes?

 

[zinger1457]

Thanks to all the advice thus far. I will keep my eyes open for any TSP retirement seminars that come available through the USPS.

How are the TSP withdrawal options the weak point? Taxes?

No, the issue is the withdrawal limitations. You can take a one time partial withdrawal but after that if you want to take a withdrawal you have to do a full withdrawal (full, monthly or annuity). If you take the monthly withdrawal option you can only change the amount once a year, if you might need an additional $30K one year to buy a new car it's not possible, or if you want to stop withdrawals it's not possible. You don't have those withdrawal restrictions with an IRA.

 

[nun]

No, the issue is the withdrawal limitations. You can take a one time partial withdrawal but after that if you want to take a withdrawal you have to do a full withdrawal (full, monthly or annuity). If you take the monthly withdrawal option you can only change the amount once a year, if you might need an additional $30K one year to buy a new car it's not possible, or if you want to stop withdrawals it's not possible. You don't have those withdrawal restrictions with an IRA.

You could roll a portion of the TSP to an IRA for emergency spending and then do the systematic monthly withdrawals or an annuity.

 

[donheff]

Yeah, the TSP withdrawal options are currently a weak point. I plan to do monthly withdrawals calculated by them to meet RMD requirements starting at 70+. But I have lots of other funding sources. For someone depending solely on the TSP for spare cash, I can't remember whether TSP allows you to make a one time large withdrawal after you start monthlies. If so, you could consider waiting until/if you needed it and roll a chunk over to an IRA. If not, I would follow Nun's suggestion and roll a chunk over before I switched to monthly RMDs. Worth evaluating your tax circumstances since Nun's approach might be better in any event since after RMDs kick in you will be generating more taxable income which could bump up the rate a lump sum will be taxed at.

 

[kaudrey]

I agree with the others that a monthly transfer over the next year to one of the target date funds would likely work for you; however, I am assuming you don't have any other retirement accounts or funds invested elsewhere? You should look at your overall equity/bond allocation in total over all accounts.

 

[Roguejimmer]

Yes, getting into the L20/L30 funds over the next year is what I should do. I'm a little concerned the stock market will make a big correction about the time I make the move.