TSP stability?

[Anonymous]

Anonymous wrote:

Anonymous wrote:TSP is managed by BlackRock.

TSP is managed by an independent board. The staff reporting to that board operate back office / accounting systems and the TSP web site. They also contract operation of the various funds to other firms. Over time they might change which firm operates which fund, but such changes are invisible to TSP participants.

Arguing for the sake of arguing. Most of TSP funds are contracted out to BlackRock to manage. Is that better?

[Anonymous]

Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

[Anonymous]

Anonymous wrote:

Anonymous wrote:My concern with the TSP is that Congress will one day decide that it can only be invested in the G fund or some crazy government approved stock/bond fund.

There is no reason to think this is even remotely likely. Why would it be proposed, let alone adopted? Plenty of non-federal gov't investors choose to invest in U.S. treasury securities, so there is no need or incentive to compel additional investment by federal government employees.

Undermining the TSP would just be another way to punish feds. Or maybe Trump gets pissed at Nvidia, Apple and Microsoft so decides the c fund cannot have those stocks anymore. Or maybe he, or all of congress, just wants to manipulate the market for personal benefit.

[Anonymous]

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My concern with the TSP is that Congress will one day decide that it can only be invested in the G fund or some crazy government approved stock/bond fund.

There is no reason to think this is even remotely likely. Why would it be proposed, let alone adopted? Plenty of non-federal gov't investors choose to invest in U.S. treasury securities, so there is no need or incentive to compel additional investment by federal government employees.

Undermining the TSP would just be another way to punish feds. Or maybe Trump gets pissed at Nvidia, Apple and Microsoft so decides the c fund cannot have those stocks anymore. Or maybe he, or all of congress, just wants to manipulate the market for personal benefit.

Or, a giant asteroid could impact the planet, ending all life here. Paranoia is no substitute for rational planning.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

I just tried searching this but I don’t think that’s right. I think you have to wait until 65.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

Wrong. You will pay taxes on withdrawals at your ordinary income rate but penalties disappear at 59 1/2 if working outside the Federal government.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

Wrong. You will pay taxes on withdrawals at your ordinary income rate but penalties disappear at 59 1/2 if working outside the Federal government.

Wouldn’t they pay taxes on a regular 401k if they pulled at 59.5, as well? I personally would leave it in TSP but I like to leave it in lifecycle and forget about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

This is wrong.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

Wrong. You will pay taxes on withdrawals at your ordinary income rate but penalties disappear at 59 1/2 if working outside the Federal government.

Wouldn’t they pay taxes on a regular 401k if they pulled at 59.5, as well? I personally would leave it in TSP but I like to leave it in lifecycle and forget about it.

Yes. Taxes treat TSP withdrawals same as ordinary 401(k), 403(b), or similar.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

As others mentioned, you're absolutely wrong.

If you leave federal service at 55 or older, you can withdrawal money from the TSP without the 10% penalty. Feel free to search "rule of 55".

If you leave federal service before 55 then you can take money out at 59.5 without a penalty. There's nothing anywhere about 62.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My concern with the TSP is that Congress will one day decide that it can only be invested in the G fund or some crazy government approved stock/bond fund.

There is no reason to think this is even remotely likely. Why would it be proposed, let alone adopted? Plenty of non-federal gov't investors choose to invest in U.S. treasury securities, so there is no need or incentive to compel additional investment by federal government employees.

Undermining the TSP would just be another way to punish feds. Or maybe Trump gets pissed at Nvidia, Apple and Microsoft so decides the c fund cannot have those stocks anymore. Or maybe he, or all of congress, just wants to manipulate the market for personal benefit.

Or, a giant asteroid could impact the planet, ending all life here. Paranoia is no substitute for rational planning.

The "Trump accounts" for children only allow investments in US based stock indices and they have specifically and intentionally disallowed investing in international stock funds. It does not seem like a giant asteroid stretch similar constraints could be added to TSP accounts. The tax savings from investing in a TSP outweigh this risk by miles, but the OP asked about rolling money from an existing 401k into the TSP which has pretty limited benefits. It does not seem irrational to warn someone against moving money into an account that is controlled by whims of one person.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there a different age that you’d be able to pull from TSP vs other 401k? Since you’d be retired from government, but still working in private sector can you make withdrawals at 59.5 penalty free?

If you no longer work for the government, you can’t pull TSP until 62 penalty free.

As others mentioned, you're absolutely wrong.

If you leave federal service at 55 or older, you can withdrawal money from the TSP without the 10% penalty. Feel free to search "rule of 55".

If you leave federal service before 55 then you can take money out at 59.5 without a penalty. There's nothing anywhere about 62.

the important thing to keep in mind is that the "rule of 55" only applies to the retirement account affiliated with the employer parted from at 55. this means that if one say, switches employers at 52, it's important to at least roll over enough funds to the new employers plan to sustain expenses between 55 and 59.5 in the event one should leave/be laid off after 55, because you can only pull from that specific account penalty-free.

some states do not tax TSP disbursements, so depending on where you live there could be a tax advantage to leaving some funds in TSP even if one leaves the government.

as always, your mileage may vary, please consult a tax or financial advisor in your locale for advice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My concern with the TSP is that Congress will one day decide that it can only be invested in the G fund or some crazy government approved stock/bond fund.

There is no reason to think this is even remotely likely. Why would it be proposed, let alone adopted? Plenty of non-federal gov't investors choose to invest in U.S. treasury securities, so there is no need or incentive to compel additional investment by federal government employees.

Undermining the TSP would just be another way to punish feds. Or maybe Trump gets pissed at Nvidia, Apple and Microsoft so decides the c fund cannot have those stocks anymore. Or maybe he, or all of congress, just wants to manipulate the market for personal benefit.

OP here and this is more along the lines of what I fear could happen. TSP is a loooootttt of money, isn't it by far the biggest fund in existence? I don't trust that it wouldn't be manipulated in some way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My concern with the TSP is that Congress will one day decide that it can only be invested in the G fund or some crazy government approved stock/bond fund.

There is no reason to think this is even remotely likely. Why would it be proposed, let alone adopted? Plenty of non-federal gov't investors choose to invest in U.S. treasury securities, so there is no need or incentive to compel additional investment by federal government employees.

Undermining the TSP would just be another way to punish feds. Or maybe Trump gets pissed at Nvidia, Apple and Microsoft so decides the c fund cannot have those stocks anymore. Or maybe he, or all of congress, just wants to manipulate the market for personal benefit.

Or, a giant asteroid could impact the planet, ending all life here. Paranoia is no substitute for rational planning.

The "Trump accounts" for children only allow investments in US based stock indices and they have specifically and intentionally disallowed investing in international stock funds. It does not seem like a giant asteroid stretch similar constraints could be added to TSP accounts. The tax savings from investing in a TSP outweigh this risk by miles, but the OP asked about rolling money from an existing 401k into the TSP which has pretty limited benefits. It does not seem irrational to warn someone against moving money into an account that is controlled by whims of one person.

It is irrational unless you also posit that changes to investment options will include a separate inability to withdraw or move your money elsewhere, which seems so improbable as to not be worth contemplating.