Any help is appreciated. I have seen other threads with info on what order they should max their accounts. However, I am high 3 and do not receive the TSP match, after I max my Roth IRA, should I then work towards maxing my TSP, or should I start pouring into my brokerage account? I am eligible to retire in 10 years and am unsure if I will stay longer. Since I won't be able to contribute to my TSP after retirement, wouldn't it make more sense to start pouring funds into my brokerage account? Thank you in advance for any insight.
Sequence help! Max roth IRA>TSP>then brokerage account? (high 3)
byu/g_pataki inMilitaryFinance
Posted by g_pataki
4 Comments
10% of a 5k and a 5k account(500 & 500 gain) is the same as a single 10k account (1000 gain) . You will get taxed twice(deposit and withdrawal) if you throw it into a brokerage compared to TSP though.
You could throw it into the brokerage if you want to be able to use those funds earlier than 59.5.
After you retire, you can roll your TSP into your IRA if you want.
If you need access to your invested funds after your retirement to bridge the gap between retirement and 59.5 (age you can withdraw from TSP). If you don’t, TSP is going to be much more advantageous tax-wise than brokerage
There are also ways to access your retirement funds early through 72t or Roth conversion ladder as well. This is a good guide for that.
https://www.madfientist.com/how-to-access-retirement-funds-early/
BL: maxing TSP is probably going to be better than brokerage
No, it does not make sense to skip the TSP. You’re giving up $23k in tax advantaged space.
Max all tax advantaged accounts first, then taxable. Unless you have a specific savings need such as a house or need to build emergency funds.v