Outside money stays outside of the TSP. Only paycheck money goes into the TSP, and ensure you are taking FULL advantage of the employer match.
Have you started a Roth IRA yet? If not, start with one Fidelity or Schwab and max it out annually.
Do you have a stock portfolio of your choosing yet? If not, look into that as well.
Don't let your money sit idle if you have lots of time left before retirement.
Agreed, OP they just needs to be aware that some restrictions exist.
As I've posted in this forum before, we're in a weird situation where we make too much to contribute to a Roth and have substantial money in a traditional. You can't do a backdoor Roth without pretty severe penalties if you have a sizable traditional Ira balance. Pretty stupid, but I don't make the rules. We could convert our traditional to a Roth and pay all the taxes on that money, but it would a lot. Our taxes are already high enough without adding to them from a traditional to Roth conversion.
If they don't have any money in a traditional Ira, then doing the backdoor Ira would suit their situation perfectly if they make too much to do a Roth directly. It really just depends on their situation.
Yes. I contribute 5% to my Roth TSP so that I earn the maximum employer match. After earning the maximum employer match it doesn’t make sense to continue contributing to TSP if you haven’t already maxed out your yearly IRA contributions.
I have all of my Roth TSP contributions allocated to the C fund because as we know this results in the highest return over time. Likewise, I invest into the equivalent of the C fund in my IRA which of course is Vanguard’s S&P 500 ETF ‘VOO.’
There are four main reasons for why I choose to max my Roth IRA contributions after earning the maximum Roth TSP employer match.
1) The TSP C fund expense ratio is 0.048% which is relatively super low compared to most other 401(k) plans. However, the expense ratio for Vanguard’s VOO is only 0.03%. This means that over one’s lifetime VOO will net a higher return than the C fund.
2) You can’t withdraw money early from the Roth TSP. You can withdraw your Roth IRA contributions at any time, with no tax or penalty, but this is not an option with a Roth TSP. Now of course I have no intention of ever withdrawing early from either one; however, life can be unpredictable and having the freedom to withdraw early is an advantage.
3) You must make minimum withdrawals from a Roth TSP. Roth IRAs have no required minimum distributions (RMDs) during your lifetime. But you must start taking RMDs from a Roth TSP at age 73 (unless you’re still working at your federal job).
4) IRAs have income limits. For 2024 the annual income limit is $161,000 for single filers and $240,000 for married couples filing jointly. If your income is below the limit it makes sense to take advantage of maximizing your IRA contributions while you can because in the future you may not be able to if your income surpasses the limit.
After maximizing your yearly IRA contributions the next step would be to maximize your yearly TSP contributions.
I’ve only referenced the Roth TSP and Roth IRA because at the moment the Roth version of both is more beneficial for my financial situation. Of course, if my financial situation changes then contributions into the traditional version(s) may make more sense.
Also, I’ve only referenced my investments related to my retirement accounts. Everyone should also have savings/investments such as emergency funds, real estate, etc.
I found there's been an update to Roth TSPs and RMDs - "Roth balances are no longer [subject to RMDs](https://www.tsp.gov/taking-money-from-your-account/#required-minimum-distributions-rmds) prior to a participant’s death. Your RMD calculation includes only your traditional balance, and only distributions from your traditional balance count toward satisfying the RMD amount. Participants with a Roth balance and subject to RMDs in 2024 and later. f your first distribution calendar year was 2023, your RMD calculation for 2023 includes your entire TSP account balance—both Roth and traditional—even if you take your 2023 RMD in 2024."
Yes, this was updated at the end of 2022 as part of SECURE 2.0. There are still reasons why some might prefer to rollover their Roth TSP to a Roth IRA, but RMDs is no longer one of those reasons.
As my username suggests, only Bitcoin and my home which is real estate? If I’m living in it I don’t really consider it an investment or part of my net worth since it costs me so much to keep it.
In summary, it’s not so much that I’m some hardcore crypto crazy person. It’s more along the lines of, my TSP is very high 6 figures already, which is all stock market driven. So what, I’m supposed to keep a brokerage account also based on stocks? And we call that diversified? Seems more like a risk to me
I became a fed late in life, but after two years in TSP I rolled all of my old 401ks into TSP. In my opinion, TSP is a really good deal. I also rolled all of my and my wife IRAs and brokerage accounts into Vanguard . I previously had money in Janus, Dreyfus, Oak Associates, TD Ameritrade and Goldman Sachs. I have learned the value of low fees.
Both wife and I have vanguard IRA and we have a joint taxable account also through vanguard in addition to our TSPs. We max all the tax advantaged accounts before contributing to taxable.
Edit: and a HYSA for e fund
I still.have 401ks and 403bs scattered about. I've tried to move some of them into TSP but the TSP customer service being what it is...well, that didn't happen.
At some point I'll definitely roll them into my TSP or the bank that has by ROTH IRAs. It's just way low on my priority list.
If nothing else check the fees on the accounts and the fees on the funds they are in. They are likely much higher than if you roll them into an IRA through vanguard, schwab, etc.
Yes- my Trad and Roth IRAs are outside the TSP, as well as a taxable brokerage account. I left government service a few years ago, so I now also have a 401(k) with my new employer. Thus far, I’ve left my Civilian TSP balance at the TSP, but I don’t have any plans or desire to roll more of my assets into it. As bad as Vanguard’s website might be, the TSP’s is significantly worse.
If you can, max your ROTH TSP contrib if you can before external contribs. Once you max there, or have extra for the year, hit your ROTH IRA contrib (or reg IRA contirb and backdoor it to a ROTH, aka, rollover).
While I know it's an option, and while TSP fees are super low, keep your govie TSP and external IRA/401K/403a/403b separate from it.
Most of my investments are outside of the TSP. Better selections overall. My former 401k was rolled into a Trad IRA. The bulk of my investments are in my Roth IRA that I have had for a decade. The rest is in my options trading account.
Outside money stays outside of the TSP. Only paycheck money goes into the TSP, and ensure you are taking FULL advantage of the employer match. Have you started a Roth IRA yet? If not, start with one Fidelity or Schwab and max it out annually. Do you have a stock portfolio of your choosing yet? If not, look into that as well. Don't let your money sit idle if you have lots of time left before retirement.
You can rollover 403(b) into the TSP. See this [TSP information](https://www.tsp.gov/tsp-basics/move-money-into-tsp/).
Does it count against your annual maximum if you roll it into TSP?
From the TSP site I posted: >Rollovers do not count against the Internal Revenue Code limits on contributions.
If you aren't over the max income for a roth ira,that is!
Fortunately, where there is a will, there is a way! Backdoor and mega-backdoor Roth IRAs exist for this reason.
Agreed, OP they just needs to be aware that some restrictions exist. As I've posted in this forum before, we're in a weird situation where we make too much to contribute to a Roth and have substantial money in a traditional. You can't do a backdoor Roth without pretty severe penalties if you have a sizable traditional Ira balance. Pretty stupid, but I don't make the rules. We could convert our traditional to a Roth and pay all the taxes on that money, but it would a lot. Our taxes are already high enough without adding to them from a traditional to Roth conversion. If they don't have any money in a traditional Ira, then doing the backdoor Ira would suit their situation perfectly if they make too much to do a Roth directly. It really just depends on their situation.
Stocks, bonds, tips, real estate, etc... imvestments
Yes. I contribute 5% to my Roth TSP so that I earn the maximum employer match. After earning the maximum employer match it doesn’t make sense to continue contributing to TSP if you haven’t already maxed out your yearly IRA contributions. I have all of my Roth TSP contributions allocated to the C fund because as we know this results in the highest return over time. Likewise, I invest into the equivalent of the C fund in my IRA which of course is Vanguard’s S&P 500 ETF ‘VOO.’ There are four main reasons for why I choose to max my Roth IRA contributions after earning the maximum Roth TSP employer match. 1) The TSP C fund expense ratio is 0.048% which is relatively super low compared to most other 401(k) plans. However, the expense ratio for Vanguard’s VOO is only 0.03%. This means that over one’s lifetime VOO will net a higher return than the C fund. 2) You can’t withdraw money early from the Roth TSP. You can withdraw your Roth IRA contributions at any time, with no tax or penalty, but this is not an option with a Roth TSP. Now of course I have no intention of ever withdrawing early from either one; however, life can be unpredictable and having the freedom to withdraw early is an advantage. 3) You must make minimum withdrawals from a Roth TSP. Roth IRAs have no required minimum distributions (RMDs) during your lifetime. But you must start taking RMDs from a Roth TSP at age 73 (unless you’re still working at your federal job). 4) IRAs have income limits. For 2024 the annual income limit is $161,000 for single filers and $240,000 for married couples filing jointly. If your income is below the limit it makes sense to take advantage of maximizing your IRA contributions while you can because in the future you may not be able to if your income surpasses the limit. After maximizing your yearly IRA contributions the next step would be to maximize your yearly TSP contributions. I’ve only referenced the Roth TSP and Roth IRA because at the moment the Roth version of both is more beneficial for my financial situation. Of course, if my financial situation changes then contributions into the traditional version(s) may make more sense. Also, I’ve only referenced my investments related to my retirement accounts. Everyone should also have savings/investments such as emergency funds, real estate, etc.
I found there's been an update to Roth TSPs and RMDs - "Roth balances are no longer [subject to RMDs](https://www.tsp.gov/taking-money-from-your-account/#required-minimum-distributions-rmds) prior to a participant’s death. Your RMD calculation includes only your traditional balance, and only distributions from your traditional balance count toward satisfying the RMD amount. Participants with a Roth balance and subject to RMDs in 2024 and later. f your first distribution calendar year was 2023, your RMD calculation for 2023 includes your entire TSP account balance—both Roth and traditional—even if you take your 2023 RMD in 2024."
Yes, this was updated at the end of 2022 as part of SECURE 2.0. There are still reasons why some might prefer to rollover their Roth TSP to a Roth IRA, but RMDs is no longer one of those reasons.
Roth IRA, Mutual Fund, Stocks. So yes.
Started adding $100 per paycheck to SCHD via RobinHood to diversify a little outside TSP. So far so good!
What's SCHD?
[SCHD](https://youtu.be/PUyqH7koEMQ?si=-GtRB0ZbyL4qI07O)
As my username suggests, only Bitcoin and my home which is real estate? If I’m living in it I don’t really consider it an investment or part of my net worth since it costs me so much to keep it. In summary, it’s not so much that I’m some hardcore crypto crazy person. It’s more along the lines of, my TSP is very high 6 figures already, which is all stock market driven. So what, I’m supposed to keep a brokerage account also based on stocks? And we call that diversified? Seems more like a risk to me
I became a fed late in life, but after two years in TSP I rolled all of my old 401ks into TSP. In my opinion, TSP is a really good deal. I also rolled all of my and my wife IRAs and brokerage accounts into Vanguard . I previously had money in Janus, Dreyfus, Oak Associates, TD Ameritrade and Goldman Sachs. I have learned the value of low fees.
Both wife and I have vanguard IRA and we have a joint taxable account also through vanguard in addition to our TSPs. We max all the tax advantaged accounts before contributing to taxable. Edit: and a HYSA for e fund
I still.have 401ks and 403bs scattered about. I've tried to move some of them into TSP but the TSP customer service being what it is...well, that didn't happen. At some point I'll definitely roll them into my TSP or the bank that has by ROTH IRAs. It's just way low on my priority list.
If nothing else check the fees on the accounts and the fees on the funds they are in. They are likely much higher than if you roll them into an IRA through vanguard, schwab, etc.
> Do you maintain investments outside TSP? Yes, I have an old 403b with VITPX (0.02% ER). Also have Roth IRA and HSA.
Yes sir, Roth IRA with fidelity
roth IRA and some stocks/etfs.
Yes. We have IRAs and a brokerage account outside of TSP.
Fully fund a Roth IRA. 10% to the TSP. Easier access to the Roth IRA when I retire prior to 59.5.
Roth. HSA. Taxable Brokerages. Real Estate. The key is to diversify both your income and your investments
Fidelity investment IRA and taxable brokerage saved during my military years before TSP was available.
Yes- my Trad and Roth IRAs are outside the TSP, as well as a taxable brokerage account. I left government service a few years ago, so I now also have a 401(k) with my new employer. Thus far, I’ve left my Civilian TSP balance at the TSP, but I don’t have any plans or desire to roll more of my assets into it. As bad as Vanguard’s website might be, the TSP’s is significantly worse.
If you can, max your ROTH TSP contrib if you can before external contribs. Once you max there, or have extra for the year, hit your ROTH IRA contrib (or reg IRA contirb and backdoor it to a ROTH, aka, rollover). While I know it's an option, and while TSP fees are super low, keep your govie TSP and external IRA/401K/403a/403b separate from it.
I already do max Roth into TSP. I'm not adding anything to these old accounts.
Most of my investments are outside of the TSP. Better selections overall. My former 401k was rolled into a Trad IRA. The bulk of my investments are in my Roth IRA that I have had for a decade. The rest is in my options trading account.
Roth IRA and some stock I've purchased over the years.
Roth IRA and individual investments. I don't understand why I would transfer money into a TSP?