Should You Roll Over Your TSP When You Reach Retirement?

Federal Employee Articles

Should You Roll Over Your TSP When You Reach Retirement?

Posted by Benchmark Financial Group, LLC
7 months ago | October 21, 2019

Thrift Savings Plans allow for a tax-friendly, flexible means to save for retirement during your service as a federal employee. For the most part, many retirees also enjoy their TSP options after retirement as well. But because some do choose to roll over those funds into another type of account, you might be wondering how that move could affect your situation. Here are the primary three reasons federal retirees sometimes make that choice.

Expanded investment options. The TSP is recognized as a terrific retirement fund due to its low fees. However, you might find yourself interested in investment options that are not offered through the TSP, such as emerging markets, alternative investments, or some medium-sized companies. In this case, some retirees choose to roll their TSPs into another type of investment account in order to access those options.

Financial consolidation. If you hold multiple investment accounts, you might find it easier to keep all of your money in one place. For one thing, it’s simply easier to keep track of everything. But because holding multiple accounts can open you up to tax, investment, or estate planning risks, consolidating can also be safer.

Expanded financial services. While the new TSP Modernization Act went into effect last month, and improved upon the fund’s offerings, you might still find yourself wanting services that are not provided through the TSP itself. For example, the TSP board does not provide financial planning advice, and you are responsible for making those decisions on your own. Access to funds also might still be limited beyond what you would prefer.

If you’re considering a rollover or any other important moves with your TSP, contact us to learn more. We can help you analyze strengths and weaknesses within your plan, and help you decide if a rollover or some other strategy might be beneficial for your situation.

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