Q: The main — and probably only — reason I need to transfer my money from TSP to a regular IRA is that I’ll be able to make withdrawals as I wish or as needed. You always advise your readers to consult someone trustworthy to advise us before we do this. My question is, how do we determine who’s trustworthy? I’ve been approached by my bank, credit union, some investment companies, etc., but I just don’t know what questions to ask or what to look for, other than their fees.
A: Unfortunately, it’s not easy. But, you can start by finding someone who works for flat fee only — no commissions or asset based fees to create conflict of interest. I generally prefer to see my clients stick with the TSP if possible — even if it means taking monthly withdrawals that will at least meet their needs and investing any excess in a taxable discount brokerage account. If you just can’t live with that, then roll over your TSP money to a discount brokerage account and use low cost exchange traded index funds. The substitutions are as follow: C Fund = S&P 500 index fund; S Fund = Russell 2000 index fund; I Fund = MSCI EAFE index fund; F Fund = Barclay’s Aggregate Bond index fund. Unfortunately, you can’t replicate the G Fund, which is a big reason to try to stick with the TSP. The closest you’ll be able come will be CD’s or a guaranteed income contract.