For the past 3 years, I have been maxing out my TSP. However, I have thought of the idea of leaving the military. That leaves me with a difficult choice. What am I supposed to do with my TSP after the military if I can't contribute to it? I have already made a significant contribution to it and it would suck having to start fresh with a new 401k .I know people will say to leave it alone, but I already have the ball rolling and it will take years with a new 401k to get to the point im at now.
Is there a point to continue contributing to my TSP?
byu/These-Enthusiasm-528 inMilitaryFinance
Posted by These-Enthusiasm-528
7 Comments
You can roll it over to your new 401k
Keep contributing. It wouldn’t be starting over because that money will continue to grow even if you are not contributing.
Your money doesn’t just disappear. It still grows forever.
You could have 1 account with 1,000 or 10 accounts with $100, invested in the same thing, you will have the exact same amount of money upon withdrawal.
You accidentally discovered the logic behind 401ks instead of pensions
Instead of being tied to an employer due to pension vesting periods making career swapping untenable, your retirement assets are under your control.
Just keep the TSP or roll it into a new employer plan if it has a good fund mix or similar expense fees.
$100k is a $100k regardless if in one pile or spread over 20. It grows the same way. Leave the TSP to grow and start another pile of money in the new 401k.
As others have said, you don’t lose the money in your tsp when you leave so there’s no reason not to continue to contribute. And if you’re contributing to regular tsp rather than Roth, then you’re also reducing your annual taxable income, which might be a big reason to continue to contribute.
You can just roll it to your future employer’s 401k or you can roll it to an IRA at your personal bank and start investing it again.