Why move IRA to TSP?


Q. In a May 6 column, you recommended moving my traditional IRA to my Thrift Savings Plan. Why? I am getting good performance from my traditional IRA portfolio. I am planning to retire between the end of this calendar year and the end of 2013. Tax rates are likely to increase next year. What will be my tax consequences of making this move this year versus next year? What are the consequences of waiting until after I retire to make this move?

A. The cost of investing is lower in the TSP, so the expected rates of return are higher than elsewhere, and the presence of the G Fund allows you to configure portfolios that produce risk/return characteristics that are superior to those available anywhere else. In short, if you use it right, the TSP is likely to produce better results than your IRA. There is no tax consequence to moving your IRA money into the TSP.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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