Why You Should Roll Over a TSP sponsored by Aaron Steele

aaron steele
April 16, 2020

Why You Should Roll Over a TSP sponsored by Aaron Steele

As per Aaron Steele in the 13 years between 2000 and 2013, each year saw 40,000 or more federal employees enter retirement; in 2013 alone, this number was at 62,000. By 2023, it’s expected that 30% of the federal workplace will be eligible to retire. With this in mind, the TSP is already taking steps to encourage workers to keep their money invested even as retirement gets closer.

Aaron Steele said as you may have seen already, the board and body responsible for the TSP are claiming that keeping the balance invested provides freedom, simple choices, and easy transfers. In the interest of keeping things fair, we want to look into the other side of the argument and assess three reasons why you should roll over your TSP.

Lack of Financial Services

Unfortunately, one of the biggest downfalls of keeping funds in a TSP is the poor withdrawal options. In fact, Aaron Steele said this extends to several financial services including financial planning and investment management advice and guidance.

Last September, new withdrawal options were introduced, and this has provided some more flexibility. This being said, it still doesn’t compare to what can be found elsewhere. Within the distribution rules, it stated that both changes and withdrawals still needed a notarized signature or equivalent materials. If you have money elsewhere, all it would take to make adjustments is a call to your financial advisor.

With regards to financial services, withdrawals are one thing, but the lack of financial planning guidance is more important for many. Considering the many fantastic services away from a TSP, it’s hard to justify making big investment decisions alone. In truth, we can have gaps in our financial plan for months just because of this deficiency.

Lack of Investment Options

As far as employer-sponsored retirement plans go, the TSP has the lowest cost in the US, and we understand that this is a great advantage to have. On the other hand, it’s hard to overlook the lack of options. With only five to choose from, we can’t access emerging markets, medium-sized businesses, or alternative markets.

To stay affordable, the G fund is the only fund that isn’t indexed. While this definitely has advantages, there’s a danger to only having index funds in your portfolio. Especially with the lack of professional management, we’re blindly following a market index and hoping for the best. Without expert management, negative and unpredictable market environments can lead to increased market volatility for account holders.

Lack of Consolidation

As per Aaron Steele in recent years, it has become obvious that investment consolidation is the best way forward. With everything under one financial institution and fiduciary advisor, we enjoy the following benefits:

Simple estate planning admin
Simplified statements
Easy calculations for portfolio total returns

As you’ve probably guessed, we can only consolidate retirement assets with a TSP. For non-qualified investments, we work with another institution. For the best financial plan, we believe in consolidation with more than just retirement accounts. Without consolidation, there’s a risk to investment and estate planning as well as tax. Wouldn’t it be better to spend extra time with family and friends than have to manage various financial services?

We get that the TSP is a low-cost service, but this is reflected in the lack of services, investment options, and consolidation opportunities. To meet the goals of yourself and your family more closely, we highly recommend building a relationship with a finance professional. You’ll benefit from financial planning, tailored advice, more investment choices, and consolidation across your whole portfolio rather than just retirement assets.

Aaron Steele

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.