Leave TSP funds in TSP or move to Edward Jones

[Awebb]

Hello
I have retired from fed gov. I have a TSP (Thrift Savings account). I also have an Edward Jones account. My financial advisor is trying to talk me into moving my TSP funds into Edward Jones. It would be nice to have everything in one place and I do not have financial knowledge so my TSP is just sitting there. I do know it is cheaper to leave my funds in TSP.
Any thoughts.
Thanks

 

[njhowie]

Roll everything over to Fidelity or Vanguard - both the TSP funds and what you currently have at Edward Jones.

 

[Awebb]

How are Fidelity or Vanguard different from Edward Jones?

 

[njhowie]

How are Fidelity or Vanguard different from Edward Jones?

Lower cost, "advisors" aren't working on commission of what they are paid to sell you. Both Fidelity and Vanguard have advisors who can help and work with you and don't have the conflicts of interest which Edward Jones does.

https://www.edwardjones.com/images/LGL-8944-A_Final.pdf

When we do business with you, the firm and our financial advisors benefit from fees, commissions and other payments from you and our investment providers. These financial incentives may create a conflict between Edward Jones’ interest, your financial advisor’s interest, and your own.

 

[target2019]

Hello
I have retired from fed gov. I have a TSP (Thrift Savings account). I also have an Edward Jones account. My financial advisor is trying to talk me into moving my TSP funds into Edward Jones. It would be nice to have everything in one place and I do not have financial knowledge so my TSP is just sitting there. I do know it is cheaper to leave my funds in TSP.
Any thoughts.
Thanks

If you're invested properly, it may be best that your TSP just sit there.

What most on this board will recommend is that you ditch Eddie Jones and save a bunch on fees during your retirement.

Schwab or Vanguard or Fidelity are good choices.

 

[donheff]

I have a TSP account and I rolled my external tax deferred accounts INTO the TSP. I recommend you do the same with any tax deferred funds at EJ. The TSP offers excellent index funds with rock bottom fees, including the excellent G Fund that is not available anywhere else. Their mission is to serve you, nobody else. Edward Jones is not your friend.

 

[Markola]

Avoiding fees is one of the most important factors in investing success and all firms are not created equal. Most firms, with Edward Jones being among the worst, are designed to separate unknowing clients from their money with outrageously high fees. A very few, like Fidelity and Schwab, aim to attract the clients who understand that fees lower clients’ investment returns. One, alone, Vanguard, is a cooperative owned by the clients themselves and, naturally, it has the consistently lowest fees in the industry. It also does not have the expensive offices the others have and everything is done over the phone.

Uniquely, your TSP has even lower fees than Vanguard, so putting everything in the Lifecycle Income Fund is just fine, as my own wife has. TSP will calculate the sustainable payment you’ll get each month and simply send it to you.

Your Edward Jones broker will likely insult your intelligence, stamp and holler and say he can outperform TSP, as he is trained to do, because he has a conflict of interest, he thrives on people’s ignorance and not using him denies him his huge fees. However, virtually everyone on this board of experienced investors will tell you that going with Edward Jones is a huge mistake you will regret.

I feel for you having to make a hugely important decision without enough knowledge. To keep it simple as you learn from this board and other reputable sources, leave your money in the TSP. In fact, ask the TSP folks to transfer your Edward Jones money to TSP. GOOD LUCK and start reading about Vanguard and their index funds.

 

[donheff]

As Markola says, your EJ advisor will give you all kinds of reasons why the TSP is a disaster and EJ is your best bet. The reality is the opposite. Some knowledgeable investors on this board, will move some or all TSP funds to locations like Vanguard with low fees and more options for investment, trading, and withdrawals than the TSP offers. But for a solid, cost effective platform the TSP is excellent. One of their biggest drawbacks was a lack of flexibility on how you take money out in retirement but they have relaxed their restrictions substantially and offer sufficient flexibility to meet "normal" peoples' needs. You will eventually have to take RMDs to cash out funds from the TSP (or any tax deferred account). If those draws exceed your needs you will need a brokerage account to invest those extra funds. Look to Vanguard, Schwab, or Fidelity for that rather than EJ.

Spend some time on this forum and you will quickly have enough information to feel comfortable with your choices. If you need hand holding in the short term, read some of the threads on choosing an advisor. You can;t rely on your EJ guy for unbiased advice.

 

[MRG]

NO!

Friends don't let others get fleeced by fast Eddie.

 

[OldShooter]

NO!

Friends don't let others get fleeced by fast Eddie.

This! +100

 

[Dash man]

It took me two years to get my sister-in-law away from EJ and now she’s happy I pestered her to do so. Don’t even talk to him if you think he’ll persuade you to stay by his slick sales pitches. Do as others have suggested and move the EJ money either to your TSP or to Schwab, Fidelity or Vanguard.

 

[OldShooter]

... Don’t even talk to him if you think he’ll persuade you to stay by his slick sales pitches. ...

You don't have to talk to anyone at EJ. Just fill out a form at Fido or Schwab and they will take care of gathering the assets.

That said, I discovered that a financially naive friend had been sold "four or five" annuities by his "friend" the EJ guy. When he tried to move his assets some were locked into EJ and the fees were locked into the crook at EJ. My Schwab guy, who is very sharp, tried to help/pry the assets loose but failed. So I hope you don't run into that.

 

[WyomingLife]

This is a great thread, thank you all.

DW has a chunk of money in the TSP -- largely C-fund.

She left federal service 20 years ago, and is eligible for SS next year. I didn't know if I should "suggest" she roll it all over into Vanguard, where effectively the rest of our investments reside. I gather from the above I should make no such suggestion, and we should just let it ride.

One question I have with the TSP: I can't "see" the dividends on tools like Personal Capital, so I can't determine what passive returns the C-fund is kicking off monthly, quarterly, whatever.

I also don't know -- but have never researched -- if the TSP allows the account holder to redirect such dividends to an external account, vice reinvestment.

The TSP seems like a black box to me.

 

[VanWinkle]

NO!

Friends don't let others get fleeced by fast Eddie.

This + 1000

 

[VanWinkle]

This is a great thread, thank you all.

DW has a chunk of money in the TSP -- largely C-fund.

She left federal service 20 years ago, and is eligible for SS next year. I didn't know if I should "suggest" she roll it all over into Vanguard, where effectively the rest of our investments reside. I gather from the above I should make no such suggestion, and we should just let it ride.

One question I have with the TSP: I can't "see" the dividends on tools like Personal Capital, so I can't determine what passive returns the C-fund is kicking off monthly, quarterly, whatever.

I also don't know -- but have never researched -- if the TSP allows the account holder to redirect such dividends to an external account, vice reinvestment.

The TSP seems like a black box to me.

Moving to Vanguard is not a mistake. It is just a matter of personal choice.
The expenses will be low at either provider. (Vanguard or TSP)

 

[MrsHaloFIRE]

Eddie Jones wants every penny you have under the mgmt so they can churn and few you into oblivion. Run, don't walk, away. Vanguard of schwab. Vanguard would be my preference if you truly don't want to manage your own


Editted. To add: no need to call Eddie to break the bad news. Call your new company and let them do it. Eddie will make promises he won't keep

 

[Lakedog]

One question I have with the TSP: I can't "see" the dividends on tools like Personal Capital, so I can't determine what passive returns the C-fund is kicking off monthly, quarterly, whatever.

I also don't know -- but have never researched -- if the TSP allows the account holder to redirect such dividends to an external account, vice reinvestment.

The TSP seems like a black box to me.

There are no dividends that you can see with TSP funds as they are automatically reinvested into the funds.

 

[goingtotravel]

If you do decide to roll any money to Fidelity or Vanguard or Schwab make sure to leave a balance in TSP. Once you close your TSP accounts as a retiree you cannot reopen them, ever. You will need to research what minimum balance is currently required to keep an active TSP account as a retiree. We will be using Vanguard and TSP for our portfolio in retirement but we never plan on completely eliminating our TSP accounts.

 

[donheff]

This is a great thread, thank you all.

DW has a chunk of money in the TSP -- largely C-fund.

She left federal service 20 years ago, and is eligible for SS next year. I didn't know if I should "suggest" she roll it all over into Vanguard, where effectively the rest of our investments reside. I gather from the above I should make no such suggestion, and we should just let it ride.

One question I have with the TSP: I can't "see" the dividends on tools like Personal Capital, so I can't determine what passive returns the C-fund is kicking off monthly, quarterly, whatever.

I also don't know -- but have never researched -- if the TSP allows the account holder to redirect such dividends to an external account, vice reinvestment.

The TSP seems like a black box to me.

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.

 

[WyomingLife]

There are no dividends that you can see with TSP funds as they are automatically reinvested into the funds.

Thank you! I never knew that.

 

[WyomingLife]

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]

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]

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!