What Would I Do With TSP in Retirement?

hey guys Brad Bob here and I want to talk today about about tsp in retirement which I talked about a lot okay I've talked a lot about tsp how it works now how it works in retirement um but a question I that has been asked of being here a couple times recently is what would you do with TSP if you were in this situation so I'll go ahead and answer that so keep in mind it's not advice for you this is just me saying this is what I would do okay so if I was in the situation that I'm retiring um let's say I'm retiring at the age of 57. okay I'm gonna retire at 57 and what I'm going to start with is I'm going to figure out how much money I need per month in retirement okay so I'm gonna have my first annuity I'm gonna have social security and I'm going to have investment income and let's assume I have no Investments outside of tsp okay but maybe maybe a Roth IRA Ira but no taxable money outside of tsp so yeah figure out my income and might have a sneeze coming here no okay so I'm gonna figure out my income and what I'm gonna go with is I'm gonna say I need 24 000. per year for my investments or two thousand dollars a month all right and and again that's over and above my my first annuity my special retirement supplement um the guaranteed income that I'm getting so I need 24 000 a month and I have we're gonna say that I have nine hundred thousand dollars in tsp okay what I would do myself is I'm probably gonna take three years income plus just a little bit more and I'm gonna leave that in tsp all right um so twenty four thousand times three it's gonna give seventy two thousand so I'm probably gonna Round Up to eighty thousand dollars all right uh I'm gonna round up to 80 000 and then I'm gonna leave that money in tsp I'm gonna put that in the G fund okay then I'm gonna move the rest to an irf okay you say where did Ira be and it really doesn't matter any major custodian for me it's probably going to be TD Ameritrade or well what is now Schwab but that doesn't matter it could be Fidelity it could be purging um altruist is another one that's getting to be bigger uh it really doesn't matter okay so now reason and I've got multiple videos talking about why I would do this but I would do this for investment flexibility I would do that for withdrawal flexibility after I turn 59 and a half um now why would I leave three years of funds in the G fund um well for one if I retire at 57 I've got two and a half years until I reach 59 and a half therefore tsp is more accessible than an IRA okay that's the only time prior 59 and a half that tsp is more flexible than Ira uh so I want to make sure and leave enough funds there to give me the 59 and a half um but again as long as you don't deplete tsp and I believe the balance is 200 although I've heard a rumor that it's increased to 500 so as long as you leave at least 500 in it then you still have tsp open and you can move funds from an IRA back into tsp if you need to um but it three years 72 000 plus another 8 000 of um round up to 80. I I would think that I have enough enough money in tsp um to be able to ask me until I get 59 and a half now so there so that's one reason now um why would leave that much in tsp now why in the GE fund okay I would leave that money in the G fund because the G fund is guaranteed right government guarantee it is never going to decrease in value so what I the reason for that is it plus it makes some interest so having money in the G fund unguaranteed to be able to take care of my income for the next three years okay so regardless of what happens with my other Investments if my stock funds if they fluctuate if my bond funds if they fluctuate okay up or down I have three years of income right here in the G fund all right so this is a scenario if I'm age 57 all right what about if I am law enforcement a real traffic controller and I retire at the age of 50. and then I mean twenty four thousand dollars for income okay now I've got nine and a half years until I get to he's 59 and a half and an IRA is more flexible so if that's the case and you need income you need twenty four thousand dollars a year then you're gonna need to leave more in tsp if you're retiring at the age of 50. all right and then you need to decide how much you're gonna need you're going to have guaranteed okay so if you want to have three years guaranteed okay then you you know still then you're gonna have seventy two thousand dollars in the G fund and then the rest and some of the other funds there um or maybe you want to leave all of in the G fund you're more more conservative so which brings up my next question or Point let's say I retire at the age of 60. okay it and for me that this one's kind of a toss-up um maybe I would leave some money in tsp maybe not uh tsp is really frustrated me with all of their issues the past year or so with people trying to take withdrawals but let's say that I decided to leave some money in tsp anyway okay this is gonna and for me I would I would leave about three years and I leave those three years in the G fund to guarantee my income for the next three years uh and and again I I'm not very conservative okay I'm okay with taking risk in um in my investments in my IRAs and my retirement money okay I understand how it works I know it's going to fluctuate but my belief is that long term I'm gonna make more money if I have money in stocks um also I believe I'm gonna make more money and longer term corporate bonds than I am in something that's something like the G fund um but again the G fund is a great spot for short-term money okay so if you have if I was more conservative okay take a more conservative investor then I might want to have say five to eight uh on the high end maybe five to ten years of income if I retire to 60 maybe I would leave five to ten years of income in the tsp in the G fund okay and the reason for that so if it's 10 years I'm taking 240 000. um let's just follow 250 000 that I'm gonna leave in the G fund then I'm going to take the other 650 and move that to an IRA now what does that do for me okay that gives me 10 years of income guaranteed in the G fund that I know would come hell or high water that money is going to be there in the G fund okay then it is going to supply me with my income needs for the next 10 years okay so if the stock market takes us dim then I have time to recover okay I've got 10 years to recover all right and then each year you may need to adjust your funds in the ira a little bit um they cover the next 10 years but um just a scenario if I was more conservative maybe I would do something more like this if I retire to either 60 and I'm using 60 because if you retire at 60 then there's there aren't any restrictions in an IRA okay you have met that 59.5 age requirement to where you now have 100 Access those funds in your IRA the only limitations within the IRA would be limitations as far as if you invested in a product like an annuity that had a surrender chart or something like that or a limited partnership um so this is just just an example um again this is not advice for you to take everybody's situation is different okay I've just been asked the question multiple times hey what would you do with CSP if you're retired well here's an example of what I would do if I retire at 57 if I retire 15. if I retire at 60. okay so I hope that helps give you some information on how the TX tsp works and uh that's all I've got happy retirement planning thanks

Channel: Federal Retirement Planning

Views: 13,146

Keywords: fers retirement, federal retirement, tsp in retirement, thrift savings plan, thrift savings plan in retirement, tsp transfers, tsp withdrawals, thrift savings plan withdrawals, thrift savings plan distribtutions, thrift savings plan transfers, flat fee advisor, fee only advisor for federal employees, cfp for federal employees, cfp for federal government

Id: jQgrE3rE0zQ

Length: 9min 54sec (594 seconds)

Published: Wed Jun 28 2023