I'll tell you why I did a partial withdrawal to an IRA and then left 2/3 in the TSP.
Fidelity is my discount broker, but others are fairly similar in fees. Fees in my IRA are typically double or more compared to the TSP, depending on the investments you chose. If you select their equivalent to the S fund and decide to redeem before 90 days, there is a .75% fee attached to that transaction. That restriction is much worse than the TSP's limit of two transactions per month. This specific fund's expense rate is .70 compared to the .27 TSP expense.
Most importantly, the Fidelity equivalent of the G Fund - Government Cash Reserves pays .01% a year - worse than even the banks.
I did a partial withdrawal so I have easy access to the money I might want in the next 8-10 years and the funds to pay for independent living at the local senior home, if I should want it. (I do have federal long-term care, but that doesn't cover independent living arrangements). I accept the higher fees for the flexibility. I expect that in the next few years, the TSP with change their rule about a single partial withdrawal. That feature is top on their list. If they don't, I'm okay with monthly withdrawals from the account.
Everyone's needs are different, but I personally am suspicious of the experts who so strongly recommend moving all of your money. There is a bias - they can only make money from you if your money is somewhere other than the TSP.
-- Cindy King
On Wed, May 4, 2016 at 5:44 AM, khp3655@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
IIt all factors in to the decision of keeping one's money in the TSP after retirement. Information like this and limited withdrawal options makes it seem less appealing than rolling it over to an IRA where one can access their funds without such restrictions or delays. In addition, one has so many more investment options. I actually don't understand why one would keep any money in the TSP after retirement, but maybe I am missing something?
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Posted by: Cindy King <cindy.kingde@gmail.com>
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Neither the TSP Strategy group, nor individual members, are licensed or authorized to provide investment advice. Any statements made herein merely reflect the personal opinions of the individual group member. Please make your own investment decisions based upon your personal circumstances.
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