Is an Individual Retirement Account better than the Thrift Saving Plan?
One of the toughest financial decisions a retired individual or an individual who is about to retire faces is to whether he or she should keep his or her retirement savings in the Thrift Savings Plan (TSP) or should he or she transfer it to the IRA. Many people prefer to move their money to Individual Retirement Plans (IRP’s) as soon as possible but many still cling to the Thrift Saving Plan. If you are confused about which of the options you should go in for then here are a few points that can help you make a better decision.
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Thrift Savings Plan (TSP) Vs Individual Retirement Account (IRA)
When comparing these two popular plans, the below-mentioned things play a crucial role.
- Costs– If cost or fee of a plan is a major factor for you then opting for TSP is the best option for you. IRP has a much higher fee than the TSP. In fact, TSP has one of the lowest fee structure where you can pay only 29$ as the annual fee when you invest 1000$.
- Control– Some people like to control every aspect of their finances and they don’t need financial experts’ advice or assistance. If you are the same then TSP is your best option as you don’t get any advice in this plan. It gives you total control over your investments.
- Investment Options– IRAs offers more options with regard to investment while a Thrift Savings Plan only has 5 investment options. If you are after more investment options to maximize your dollars, move your funds to IRP as soon as you are eligible for the same.
- Tracking Assistance– Keeping records of all the funds you have invested is a smart idea. IRAs can help you with that. It offers regular reviews and monitoring program reports to you from time to time. It also allows you to get personal advice from the experts that may help you get more value out of your funds.
On the whole, it can be said that neither Thrift Saving Plan nor Individual Retirement Account came out as the clear winner when they are compared. Your expectations from the plan matters the most when you are planning to select one. It is also advised that you must take the assistance of an expert to guide you on the option that suits you best as it will help make a better decision.
