Not affiliated with The United States Office of Personnel Management or any government agency

Not affiliated with The United States Office of Personnel Management or any government agency

Is Leaving Your Money in the TSP a Good Idea? Sponsored By:Aaron Steele

The thrift savings plan (TSP) is arguably the most extensive contribution plan available. It is the go-to plan for Americans who want a secure and dependable retirement plan. 

 

For many years, federal employees have trusted the TSP with their retirement savings for almost their entire professional life: enjoying the flexibility, low service fees, and convenience of using this savings plan.

 

However, upon retirement, these employees can transfer all the funds to an eligible employer plan or an individual retirement account (IRA). 

 

Nevertheless, many have chosen to keep their retirement savings in the Thrift Savings Plan because of the length of years and trust of using the TSP. 

 

However, the question to be answered remains: Is leaving your money in the TSP the best decision? Is there a guarantee that things would remain the same as it borders reliability and safety? This article gives answers to the above questions.

 

It is important to note that funds cannot remain indefinitely in the TSP account after retirement. Every April 1st, federal retirees at the age of 72 are required by law to take the Required Minimum Distribution (RMDs) from their TSP accounts. 

 

By extension, taking RMDs means federal retirees at the age of 72 will now be required to pay for deferred taxes over the years.

 

This new policy changes the question automatically from: “Should I leave my money in the TSP?” to “What Will My Tax Bill Look Like Upon Retirement?”

 

The answer to this question is uncertain; however, one thing is sure about future tax rates: they will not be constant. Hence, while the idea of leaving money in the thrift savings plan seems like a good idea, the thought of unpleasant future taxes is one that federal retirees must consider before going along with the TSP. 

 

Nevertheless, the beacon of hope is that federal retirees can reduce the risk of future tax by putting money in Roth TSP accounts, which allow taxes to

 be paid on money saved towards your retirement, to the end that all future withdrawals would be tax-free. 

 

Furthermore, the TSP has limited investment opportunities compared to other tax-favored retirement accounts. For instance, IRAs permit you to invest in various assets, including stocks, bonds, mutual funds, and REITs. However, TSP has only five core funds, four of which are indexed.

 

The Thrift Savings Plan (TSP) is one of the most prominent retirement accounts, with countless benefits and profound flexibility. Its unbeatable bonds and low-cost funds are a few of the numerous benefits that its users enjoy. 

 

However, it also has a few disadvantages, which may cause federal retirees to question their decision to leave their money in the TSP. 

 

Nevertheless, a clear assessment of your intended post-retirement lifestyle and some advice from a financial professional will help you answer the question: “Is Leaving Your Money In The TSP A Good Idea?”

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely withhelping them pursue the most comfortable financial life possible.Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.Aaron can help you and your family to create, preserve and protect your legacy.That’s making a difference.

Disclosure:
Disclosure:Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.

After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Disclosure: Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

Contact Aaron Steele

Search for Public Sector Retirement Expert.

Receive the Best advice.

PSR Experts can help you determine if Public Sector Retirement is right for you or if you should look for alternatives.

The Best Advice creates
the best results.

Recent Articles

More Articles by Aaron Steele

Navigating the Final 1-3 Years of the Fed Life Cycle Before Retirement

Let's share some advice for federal workers who intend to leave their jobs in the next five years. These latter...

Putting off Social Security until you’re 70? Why You Might Miss Out on Money

Delaying your first Social Security check until you're 70 is commonly thought to be wise, but this isn't always the...

4 Life Insurance Mistakes to Avoid

Buying life insurance or adding to the amount you already have is always a sound financial decision. Regardless of your...

Search For Public Sector Retirement Expert

Receive the Best advice.

PSR Experts can help you determine if
Public Sector Retirement is right for you or if you should
look for alternatives.

The Best Advice creates

the best results.

Subscribe to our Newsletter

"*" indicates required fields

Our Readers Deserve The Best PSHB and USPS Health Benefits Guidance

Licensed insurance agents who understand PSHB, Medicare, and USPS Health Benefits Plan are encouraged to apply for a free listing.

This field is for validation purposes and should be left unchanged.

Book Phone Consultation

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Get In Touch

Stay up to date on the latest information about Public Sector Retirement.

The Best Advice Creates The Best