Q. I recently turned 59½. I want to do the following with my retirement account, which the Thrift Savings Plan does not allow:
I want to be able to withdraw small amounts of funds from time to time from my retirement account, generally limited to a portion of the gains earned by the account. TSP allows a one-time in-service withdrawal.
I want to have the ability to make transfers between funds. TSP limits transfers to two per month, but if the first is into equities and the second is into the G Fund, effectively that means only one transfer into equities a month.
I want to be able to make decisions about a fund transfer later than noon Eastern time, and have it take effect at the end of the day.
I understand people may disagree with my last two objectives, discouraging a market timing strategy in favor of long term investments.
Setting that discussion aside for the moment and returning to my first objective, it seems the only way to make occasional small withdrawals from the income generated by the TSP account is to roll over the account into another fund, such as a Fidelity or Vanguard IRA. Since I am limited to a one-time in-service withdrawal, I think I should roll over my entire TSP account because I will not have another opportunity to perform a rollover until after I retire. Do you suggest I take into account any concerns or considerations before making such a decision?
A. You should consider the increased cost of investing outside of TSP, the potential for diminished risk-adjusted returns, and the loss of access to the G Fund before you make your decision. Based on your statements, I doubt that you fully understand the importance of all of these factors in furthering your interests, though. If you did, you probably wouldn’t be considering leaving TSP.