Reply to TSP -should I move $ or let it ride

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Put 4 or 5 years of expenses in G and let the rest ride.  You will have sequence of return risk covered and not have to worry.  [b]Start looking at Roth conversions if it makes sense of if you are planning on passing money down to future generations.[/b]  [/quote]

I'm OP and obviously not savvy about this stuff. What do you mean by this? I know what a roth is but I don't know about conversion?[/quote]

the "problem" is that if you don't take anything out of the TSP before you get to age 75, by the time you turn 75 your account could be 5mil or more. your required minimum distributions (RMDs) might start out at $200,000 per year and go up from there. add to that your pension and social security and your husbands RMDs, social security and any pension and you may be in the 35% tax bracket or higher.

if you convert the TSP to roth you will owe taxes NOW on those converted funds (and have to pay that tax from outside cash) but they and all growth from those funds will be tax-free when you or your heirs pull from the account later.

the actual problem is that if you do that, you are paying real money today to potentially avoid an unknown amount of taxes later.  tax rules can always change, your account may not grow as expected, you may need to draw down enough starting when you hit 59.5 that your RMDs at 75 are less than you need to pull anyway.  no way to know your personal situation and future cash needs.[/quote]

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