TSP rollover
10-12-2017 | 08:02 AM
#11
Line Holder
Joined: Dec 2009
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Care to elaborate??? I'm familiar with after tax contributions to a traditional IRA then roll it to a Roth effectively making it a Roth contribution--the back door. What are we losing if we were to roll the TSP to a IRA?
10-12-2017 | 09:22 AM
#12
Trying to Train
Joined: Mar 2017
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10-12-2017 | 09:42 AM
#13
Banned
Joined: Dec 2009
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From: Narrow/Left Wide/Right
when you go to roll your after tax IRA contributions to a ROTH the IRS will require you to roll both tax deferred and after tax contributions which effectively forces you to pay tax on your former TSP rollover contributions. If you leave the tsp there or roll into your 401k you don't have that problem and can still backdoor roth without more taxes.
10-12-2017 | 01:38 PM
#14
Gets Weekends Off
Joined: Sep 2014
Posts: 5,152
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TSP Expense ratios for all funds are .038% and a couple are at .039%.
Our DPSP Offers an S&P 500 Index fund at .01% a Small & Mid Cap Index fund at .03% and a Bond Index at .02%.
Life cycles funds are .06% and actively managed funds have expense ratios anywhere between .29% to .93%
Our DPSP Offers an S&P 500 Index fund at .01% a Small & Mid Cap Index fund at .03% and a Bond Index at .02%.
Life cycles funds are .06% and actively managed funds have expense ratios anywhere between .29% to .93%
There will always be folks leaving non-vested funds behind when leaving federal service, and that money keeps TSP fees relatively low. I don't have a whole lot of faith that Fidelity won't try to take as much of my money as possible... any idea how long SP500 index fees have been held down to .01%?
10-12-2017 | 05:15 PM
#16
On Reserve
Joined: Feb 2007
Posts: 116
Likes: 2
I honestly had no idea those Fidelity index funds existed with such low fees. Very surprised the life cycle funds are also so low. Honestly seems too good to be true (investigation pending), but assuming they are accurate and they aren't teaser rates that will go up, there may be little reason to stay in TSP. My fear would be that the rates won't stay low and one would have no way to get back in to TSP.
There will always be folks leaving non-vested funds behind when leaving federal service, and that money keeps TSP fees relatively low. I don't have a whole lot of faith that Fidelity won't try to take as much of my money as possible... any idea how long SP500 index fees have been held down to .01%?
There will always be folks leaving non-vested funds behind when leaving federal service, and that money keeps TSP fees relatively low. I don't have a whole lot of faith that Fidelity won't try to take as much of my money as possible... any idea how long SP500 index fees have been held down to .01%?
10-12-2017 | 09:06 PM
#17
Line Holder
Joined: Feb 2011
Posts: 784
Likes: 7
There are ways out if they did raise those rates, but my opinion is that this is the new norm. We can thank vanguard for this. In fact if they are teaser rates you can do what I mentioned earlier, move the funds to the 401k brokerage link account and buy into a Vanguard ETF. When your funds are in a brokerage link account your options are virtually endless and you are only obligated to pay the sales commission of $4.95/trade and the $17 max annual custodian fee.
10-12-2017 | 09:10 PM
#18
Gets Weekends Off
Joined: Jun 2015
Posts: 3,380
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There are ways out if they did raise those rates, but my opinion is that this is the new norm. We can thank vanguard for this. In fact if they are teaser rates you can do what I mentioned earlier, move the funds to the 401k brokerage link account and buy into a Vanguard ETF. When your funds are in a brokerage link account your options are virtually endless and you are only obligated to pay the sales commission of $4.95/trade and the $17 max annual custodian fee.
10-12-2017 | 09:41 PM
#19
Line Holder
Joined: Feb 2011
Posts: 784
Likes: 7
Because TSP contributions are tax deferred (or tax exempt depending on war zone time) that you roll into an IRA.
when you go to roll your after tax IRA contributions to a ROTH the IRS will require you to roll both tax deferred and after tax contributions which effectively forces you to pay tax on your former TSP rollover contributions. If you leave the tsp there or roll into your 401k you don't have that problem and can still backdoor roth without more taxes.
when you go to roll your after tax IRA contributions to a ROTH the IRS will require you to roll both tax deferred and after tax contributions which effectively forces you to pay tax on your former TSP rollover contributions. If you leave the tsp there or roll into your 401k you don't have that problem and can still backdoor roth without more taxes.
10-13-2017 | 02:42 AM
#20
Line Holder
Joined: Feb 2011
Posts: 784
Likes: 7
This also got me thinking; if this is indeed true about the roll over, does that same rule apply to after tax 401a contributions into the DPSP that are then rolled into an outside Roth IRA. If one were to do that, would we then be limited in our ability to do a backdoor Roth IRA?
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