Leave TSP funds in TSP or move to Edward Jones

[WyomingLife]

Quote:

Originally Posted by donheff I haven't checked recently but the TSP long reinvested dividends in all cases. The TSP definitely offers less options for managing your funds than Schwab, Vanguard, et al. For many the additional flexibility available elsewhere is call enough to roll their TSP account out when they retire. It is pretty easy to match what the TSP offers through index funds offered by others. The one thing no one else offers is the G Fund. From the TSP site: " The G Fund is invested in short-term U.S. Treasury securities specially issued to the TSP. Payment of principal and interest is guaranteed by the U.S. government. Thus, there is no “credit risk.” ... The G Fund Yield Advantage—The G Fund rate calculation results in a long-term rate being earned on short-term securities." So the G Fund is like cash on steroids. My wife and I use my TSP account for a bond portion of our AA that also serves as a cash equivalent allocation. We keep our equities elsewhere.

This is simply glorious, thank you, thank you.

I am indebted to you all.

This will guide our AA/reallocation decisions going forward. It looks like DW is C Fund-heavy (focused on when she retired 20 years ago) when instead, looking across all of our investments and now 20 years later, we should have the bond portion of our entire AA across all investments in her G Fund, or at least a chunk of it.

Again, thank you.

I love this forum.

[Dreamer]

I left the federal government in 2006 and left my funds in the TSP. I currently have all of my funds in the G fund. My other funds are at Vanguard.

[WyomingLife]

Quote:

Originally Posted by Dreamer I left the federal government in 2006 and left my funds in the TSP. I currently have all of my funds in the G fund. My other funds are at Vanguard.

Thank you so much.

[donheff]

Quote:

Originally Posted by WyomingLife This is simply glorious, thank you, thank you. I am indebted to you all. This will guide our AA/reallocation decisions going forward. It looks like DW is C Fund-heavy (focused on when she retired 20 years ago) when instead, looking across all of our investments and now 20 years later, we should have the bond portion of our entire AA across all investments in her G Fund, or at least a chunk of it. Again, thank you. I love this forum.

To me that is a sensible use of the TSP G Fund. But you may not have thought through how to access that "cash" in a tax efficient manner. If we spiral into a massive recession in the next few years you might well figure on pulling "cash" from the G Fund. That will work, but since that cash is coming from a tax deferred source all of it will be taxed as ordinary income. That may or may not matter, depending on your other sources of income that year and whether you have to take RMDs anyway. If you are high income, have a lot of equities in a taxable account, and would rather have your "cash" withdrawal taxed at capital gains rates, you can sort of achieve that by selling enough taxable equities to generate the cash you need and simultaneously buying the same amount of equities through an exchange from G to C in the TSP on the same day. This leaves you with cash on hand and no net change in your equities.

[TeeRuh]

Full disclosure: When I left EJ I stopped getting Christmas cards!

[WyomingLife]

Quote:

Originally Posted by donheff To me that is a sensible use of the TSP G Fund. But you may not have thought through how to access that "cash" in a tax efficient manner. If we spiral into a massive recession in the next few years you might well figure on pulling "cash" from the G Fund. That will work, but since that cash is coming from a tax deferred source all of it will be taxed as ordinary income. That may or may not matter, depending on your other sources of income that year and whether you have to take RMDs anyway. If you are high income, have a lot of equities in a taxable account, and would rather have your "cash" withdrawal taxed at capital gains rates, you can sort of achieve that by selling enough taxable equities to generate the cash you need and simultaneously buying the same amount of equities through an exchange from G to C in the TSP on the same day. This leaves you with cash on hand and no net change in your equities.

I am indebted to you; again, thank you. Great stuff.

[ExFlyBoy5]

I have a decent friend that is an EJs advisor. They spend a lot of time looking for clients and he told me once that older folks are great "marks" and you can find these folks by seeing "fat squirrels and long cars" in some older, established neighborhoods. Yes...they still solicit business DOOR TO DOOR.

Also, this is a picture from his Facebook. Do you want to help pay for an EJs advisors sweet ride?

[OldShooter]

That's really funny. In my Adult-Ed investment class we talk about the myths that the industry pushes, including the myth that stock picking works. I then have a slide that says:"Why do the myths survive?"

One more mouse click reveals: "The myths put the Porsches in the garage."

[ExFlyBoy5]

Quote:

Originally Posted by OldShooter That's really funny. In my Adult-Ed investment class we talk about the myths that the industry pushes, including the myth that stock picking works. I then have a slide that says:"Why do the myths survive?" One more mouse click reveals: "The myths put the Porsches in the garage."

I like it! Don't get me wrong, I am all about financial success, even if that means being able to buy a pretty nice car. However, I would prefer to *not* contribute *my* stash for someone else's said pretty nice car.

I would also note that while he was a pretty good buddy of mine during our Air Force days, once he went to w*rk for EJs, his incessant nagging about "seeing what he could do for me" really eroded our relationship. It was worse than these people who are suckered into a MLM scheme and try and sign you up for the "best deal ever!!!"

[mickeyd]

I agree with comments regarding keeping EJ's hands off of your stash. Leave it @ TSP or send it to VG to open an account. Both are low cost.

[OldShooter]

Funny EJ video - Very NSFW:

https://www.youtube.com/watch?v=LDyD...ature=youtu.be

Much less NSFW, not specific to Fast Eddie, but good fun IMO:

https://www.youtube.com/watch?v=Vv4HQG2Hz0I

(This video was created by Nobel Prize winner and Stanford professor Dr. William Sharpe.)

[W2R]

Quote:

Originally Posted by Dreamer I left the federal government in 2006 and left my funds in the TSP. I currently have all of my funds in the G fund. My other funds are at Vanguard.

+1

Exactly the same here, except I retired from the federal government in 2009. It works wonderfully for me. My G Fund is part of my bond allocation, and also I am taking equal monthly payments from it that will continue until I reach age 95.

[RetMD21]

Quote:

Originally Posted by goingtotravel If you do decide to roll any money to Fidelity or Vanguard or Schwab make sure to leave a balance in TSP.

I wish I had kept access to TSP. I rolled over to Vanguard in '91 when I changed jobs.

[stephenson]

There is zero need to stay with a company like EJ.

[Markola]

Well, I guess we answered THAT one with unanimity, LOL. Maybe a record. I hope the OP hasn’t left the party and missed out on our brilliant advice.🧑🏽*[emoji310]

[travelover]

Quote:

Originally Posted by Markola Well, I guess we answered THAT one with unanimity, LOL. Maybe a record..........

Well, yea, but TeeRuh pointed out the biggest reason to stay.

Quote:

Originally Posted by TeeRuh Full disclosure: When I left EJ I stopped getting Christmas cards!

[deserat]

There is one disadvantage to leaving your funds in the TSP. They do not allow Roth conversions currently for your tax deferred portion of the portfolio. Therefore, if you want to do a any Roth conversion of your tax deferred portfolio, you will have to roll it out of the TSP and then do the conversion in another brokerage (VG/Schwab/Fidelity). If you are not concerned about Roth conversions, then TSP will assist you in making sure you take your RMDs (as well as pay the taxes on them).

[donheff]

Quote:

Originally Posted by deserat There is one disadvantage to leaving your funds in the TSP. They do not allow Roth conversions currently for your tax deferred portion of the portfolio. Therefore, if you want to do a any Roth conversion of your tax deferred portfolio, you will have to roll it out of the TSP and then do the conversion in another brokerage (VG/Schwab/Fidelity). If you are not concerned about Roth conversions, then TSP will assist you in making sure you take your RMDs (as well as pay the taxes on them).

Same thing if you want to take top of the line deductions for qualified charitable distributions by check. Now that most of us take the standard deduction, QCDs can be handy. I rolled out a portion of my TSP to Schwab so I could start writing QCD qualifying checks to my regular list of charities.

[ChrisC]

Quote:

Originally Posted by deserat There is one disadvantage to leaving your funds in the TSP. They do not allow Roth conversions currently for your tax deferred portion of the portfolio. Therefore, if you want to do a any Roth conversion of your tax deferred portfolio, you will have to roll it out of the TSP and then do the conversion in another brokerage (VG/Schwab/Fidelity). If you are not concerned about Roth conversions, then TSP will assist you in making sure you take your RMDs (as well as pay the taxes on them).

I'm not sure this is correct. My impression was that you could always transfer funds out of TSP (traditional tax deferred) to a Roth IRA and thus have a Roth conversion, under limited circumstances, prior to the most recent revisions to the withdrawal and transfer rules. The new rules make this easier and expand the frequency and levels of transfers, so that you have more flexibility in moving TSP account funds out of TSP for withdrawals, transfers or rollovers. Here is the literature on transfers and Roth conversions out of TSP: https://www.tsp.gov/publications/tsp-536.pdf

My plan is to transfer most of my 401k to TSP, beginning this year which is 6 years after I retired from Federal service, and begin Roth conversions out of TSP to my Roth IRA (with Wells Fargo Advisors) in 2021 until I reach 72 in 2025 (and perhaps go even beyond 2025 if tax circumstances dictate it). During the 6 years we've been retired, my wife will have completed conversting her entire tax deferred retirement accounts into a Roth IRA.

One major advantage we have in making conversions out of the TSP is that we pay no state income tax from these conversions in NC.

I don't think TSP permits conversions between TSP (tax deferred) and TSP Roth Accounts. If it did, I'd be looking at that as well.

[teejayevans]

Quote:

Originally Posted by OldShooter Funny EJ video - Very NSFW:

No humor, a real call to EJ in an attempt to transfer IRA $.

https://youtu.be/bBRZS4y9sZc