TSP consolidation

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Q. I came to federal service late in my career. I am approaching my five-year anniversary and am a term employee subject to a July 1, 2015, departure. I have several small investments in IRA Variable annuities and a college annuity with TIAA-CREF. None of these other funds have much in them, but between the TSP and these other funds, there is approximately $150,000 in assets. My reading in your columns and others leads me to the conclusion that I should consolidate into my TSP to the extent possible, even though my time is short. My costs with my IRAs outside of TIAA-CREF is approximately 1.4 percent to almost 2 percent. Is there a benefit to consolidation at this late date? What are my options when I take retirement?

A. You should consolidate since you may retain your TSP account, and its advantages over other retirement accounts, for the rest of your life. The benefit, if you use the TSP to your full advantage, will be higher expected rates of return for the risk you take than you’ll find anywhere else. Total investment costs, which include sales commissions, management fees and expenses, advisory fees and trading costs, should never be more than 1 percent of your portfolio’s value.

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