Googles & Scarf

by Matt Merrill

Saying goodbye to TSP

by | May 20, 2024 | Uncategorized

Given how high TSP rates have risen and how limited their services are, I have reluctantly made the choice to transfer my retirement funds to another custodian

For years I participated in and recommended the Thrift Savings Plan (TSP) to those who were eligible to invest. The TSP had the lowest fees around and that went a long way to making up for the lack of investment choices, clunky website, slow customer service, and combat zone contributions being trapped and unreachable.

Now, the “new and improved” TSP has much higher fees and might have lost your beneficiary information (over 250,000 people were affected).

Is TSP still worth the downsides?

As recently as a decade ago TSP fees were only 0.028%. Currently, TSP fees have topped 0.067%. That’s a 140% increase of fees in less than 10 years. Is the TSP providing you twice as much services, or is it just taking more money from you?

***Graph showing fees

I was able to transfer my retirement funds without penalty, taxes, or fees AND I was able to withdraw my combat zone tax-exempt contributions in the process!

The transfer is simply a rollover exchange. These happen thousands of times every day when people become dissatisfied with their old custodian.

I am leaving $200 in the TSP to keep my account open in the hopes they can turn themselves around. Hopefully, some time in the future they will return to their glory days at which point I can move the money back in. Until then, my retirement funds will make more money elsewhere.

Personal note: the TSP people I spoke with the last few months have been incredibly helpful. They sound just as frustrated as I am about how high TSP fees have risen and how limited the service is. I thank them for their help and wish them well.

Need help transferring your TSP funds to another custodian?

Contact me for assistance at mattmerrill@brightroadwealth.com.

Matt Merrill

Matt is a Financial Advisor with Bright Road Wealth Management, a long-time investor, licensed Texas realtor, and former United States Marine Corps F-18 pilot. His focus is helping military families with investing and financial planning.
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