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Thanks TSP for joining the 1980s
- Thread starter snake020
- Start date
Can you say "financial services industry lobby" ?
Honestly, if it's an economist's "nudge" to say: "hey, these aren't a good option compared to what we offer already," I'm fine with it. Too many Sailors would have been lulled into poorly managed active funds with high expense ratios compared to now their Chief can say: "just go with C and S funds" or "just go with the L fund" in Boot Camp.
Stock pickers and market timers always lose. Always.
I can split this into another thread if @snake020 prefers, but I figured I'd piggy back here first...
I'm trying to figure out what to do with a 4-figure-ish 401K that isn't getting anything added to it, probably forever. I also have my TSP L-fund from the Navy and a much smaller Lifecycle 401K fund from my current employer.
Since usually, more money makes more money, I'm thinking of putting the dead account money into TSP, but I could also recharacterize it into my current employer fund. Anyone have an opinion on one over the other? Both funds are generally productive (the last few months notwithstanding), so it's more a matter of one being somewhat bigger than the other.
Or...am I missing something and can I even recharacterize a 401K into TSP? I thought I read you could, but I know many of you are smarter on this stuff than I am.
I'm trying to figure out what to do with a 4-figure-ish 401K that isn't getting anything added to it, probably forever. I also have my TSP L-fund from the Navy and a much smaller Lifecycle 401K fund from my current employer.
Since usually, more money makes more money, I'm thinking of putting the dead account money into TSP, but I could also recharacterize it into my current employer fund. Anyone have an opinion on one over the other? Both funds are generally productive (the last few months notwithstanding), so it's more a matter of one being somewhat bigger than the other.
Or...am I missing something and can I even recharacterize a 401K into TSP? I thought I read you could, but I know many of you are smarter on this stuff than I am.
I have consolidated money from several old 401ks from former civilian employers into my TSP. Unfortunately, I got "penalized" several years later during my divorce. But still, paying my ex off in pre-tax money that she can't collect for another 15 years was a small victory.
Just to offer another option, you could also roll it over into an IRA. This would open up much more investing options than a 401k or the TSP can offer. Info here. That said, if you're good with the L Fund or with your current employer's offerings, this probably doesn't help. But if you want more diversity in your retirement investments than those plans offer you, a rollover might be worth pursuing.
Outside of that, if it were me, I'd see how the two lifecycle funds compare to one another, with my biggest emphasis on expenses/fees, and a slightly smaller emphasis on how aggressive one is over the other, specifically which one is more suited to my risk tolerance. But I'd honestly probably prefer the IRA rollover option. The TSP's super-low fees aren't as competitive as they used to be. Vanguard and Fidelity are catching up, and the latter even offers some zero-fee products.
Here's info for moving a 401k into a TSP if you haven't already found it.
I have multiple IRAs with TRP already, so that's certainly an option. I guess I was hung up on the $5500/year limitation for contributions vs. rolling over. I also have a couple of life-cycle type IRAs, and TRP's fee vs performance has always been pretty solid. That may be the option.
Thanks.