Should you roll over your Thrift Savings Plan to an Individual Retirement Account after leaving federal service?
While everybody’s personal financial situation is different and it is always advisable to consult a financial advisor about your unique circumstances, here is some general advice one financial advisor gave to a Postal Service employee nearing retirement who asked this question.
Personal finance expert Dave Ramsey suggested to this employee in a call on his radio show that he roll his TSP over after retiring. Ramsey explained his reasoning this way:
“I’d roll it to an IRA outside [of the TSP] – you can do better with open market mutual funds than the Thrift options give you. I recommend you spread your IRA and all long term investing that you have control over the options across four types of mutual funds: growth, aggressive growth, growth and income, and international; that’s what my personal IRAs and 401(k)s are in.
“The Thrift is not a bad plan, it’s just that when you are in the open market you’ve got more options, and more options usually mean that you can get a better rate of return if you do your research.”