In this episode, I discuss options for managing your TSP after leaving the military: keeping it in the TSP, rolling it over to an IRA or an employer-sponsored plan, or taking a distribution or purchasing an annuity. Keeping it in the TSP is easy and low-cost but offers limited investment options and multiple account management. Rolling it into an IRA provides more investment choices and easier management but can complicate backdoor Roth IRA contributions. Rolling into a new employer’s 401(k) consolidates accounts and preserves Roth IRA opportunities, though fees and options vary. Taking a distribution or buying an annuity offers different benefits and risks, including potential penalties and lower returns. The best choice depends on your personal circumstances and financial goals. Tune in to get a better idea of these options.

Key Takeaways:

• Keeping your TSP where it is can be a simple way to keep costs low and your financial life simple.

• Rolling your TSP into an IRA or 401(k) is a great way to broaden investment opportunities or consolidate accounts.

• Be cautious about taking a distribution from your TSP too soon, before 59 and a half, there can be penalties (though exceptions apply).

• Annuities are a transfer of risk to an insurance company, and can be considered, but the benefits really depend on your goals.

• To keep your TSP open, leave $200 in the account.

• The best decision depends on your situation and goals.

Key Timestamps:

(00:00) - Introduction: What to Do with Your TSP After Leaving the Military

(00:46) - Option 1: Keeping Your TSP in Place

(02:26) - Option 2: Rolling Your TSP to an IRA or Employer Plan

(04:51) - Option 3: Taking a Distribution or Purchasing an Annuity

(06:50) - Conclusion: Making the Best Decision for Your TSP

Key Topics Discussed:

Erik Baskin, Baskin Financial Planning, BLUF, Bottom Line Up Front, The BLUF Finance Podcast, Military Money Manual, veteran finances, TSP, Roth IRA, 401(k), employer sponsored retirement plans, retirement savings, low cost savings

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

www.baskinfp.com/post/50