Government TSP - how to transfer/rollover into an IRA?

[ajk32]

Looking for some advice on what to do with my Thrift Savings Plan (401k for government people). I'm thankfully no longer subsisting on all of your hard earned taxes, but I'd love to get the money I stashed away in my TSP out before retirement age. I've tried to figure out the rules in the past, but it's driving me crazy trying to figure out what I'm allowed to do and when.

My goal is to get it out of the TSP program any way possible with the minimum of taxes and fees. I'd love to convert it into a low cost Vanguard IRA or something similar where I could manage it easier with my future earnings.

IF a lot of taxes do need to be paid to accomplish this, I'd love to do it now when I temporarily have a very low income.

[forummm]

You can leave it there as long as you want to. The fees and investment options are very good. If you want to actually take it out and spend it, roll the pre-tax TSP portion over into a traditional IRA at Vanguard and the Roth TSP portion over into a Roth IRA at Vanguard. And then follow the info in this thread:

http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/

[Drifterrider]

Looking for some advice on what to do with my Thrift Savings Plan (401k for government people). I'm thankfully no longer subsisting on all of your hard earned taxes, but I'd love to get the money I stashed away in my TSP out before retirement age. I've tried to figure out the rules in the past, but it's driving me crazy trying to figure out what I'm allowed to do and when.

My goal is to get it out of the TSP program any way possible with the minimum of taxes and fees. I'd love to convert it into a low cost Vanguard IRA or something similar where I could manage it easier with my future earnings.

IF a lot of taxes do need to be paid to accomplish this, I'd love to do it now when I temporarily have a very low income.

Reconsider your move.  Compare fees charged by the the TSP against others. Consider a lifecycle fund (do your reading and do the math).

[wenchsenior]

Just curious why you'd want to move it? TSP is one of the greatest investment vehicles going...every time I look at what they call 'fees' I am blown away.

[dude]

Here's an excellent article on the pros and cons of moving your TSP.  I would think very seriously before doing this. Not saying in the end you shouldn't, but there are many good reasons not to (one not mentioned in this article is the G Fund - you will not find another investment like it anywhere else; it's the only free lunch I know of).

http://www.fedsmith.com/2014/09/16/utilizing-the-tsp-after-retirement/

[forummm]

Here's an excellent article on the pros and cons of moving your TSP.  I would think very seriously before doing this. Not saying in the end you shouldn't, but there are many good reasons not to (one not mentioned in this article is the G Fund - you will not find another investment like it anywhere else; it's the only free lunch I know of).

http://www.fedsmith.com/2014/09/16/utilizing-the-tsp-after-retirement/

I wouldn't call the G fund a free lunch. If you already want to have a dedicated Treasuries holding, it's a nice cheap one. And you eliminate the interest rate risk. But on the flip side since the securities are nonmarketable, you can't benefit from price appreciation when the market crashes and people flee to safety. LT Treasuries usually skyrocket when the market tanks. So then you can rebalance out of the newly appreciated bonds and into the cheap stocks. With the G fund, you're just rebalancing out of cash equivalent into the cheap stocks.

[dude]

Free lunch as in zero risk.  You can't find that anywhere else.

[forummm]

Free lunch as in zero risk.  You can't find that anywhere else.

Except anything FDIC or NCUA insured.