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JIMANDTHOM as easy as that fund is to begin to start it is limited. You will be able to transfer it to another manager like TD/Ameritrade or Charles Schwabb or Fidelity. It gives you the needed balance to pass the required minimum deposits. I do not think you will be able to open more than two. One for each of you and as soon as you reach that 15k level in each you will be required to move it.
Newbiehere I am not sure I follow the reason you say for umbrella insurance. It seems a waste to do something seperate in addition to home owners or property owners insurance and car insurance. Many of us kind of already do that bundling with insurances already.
If your retirement fund stays in a retirement fund the only entity that can attach it is the government. If you don't make mortgage payments the bank can lien on your house. If you don't make your car payments the bank can tow your car away.
Yep, unfortunately the allowable balances are rather small and you have to have earnings. I guess what I like about it is the ease of transactions and the 2% rate is very favorable. We are going to be using it as a place to park money that will go into our checking account sometime in a couple years. It will be refilled mostly from my part-time income and a few misc sources up to allowable limits.
We are 1 retired and 1 going semi in 2016 but we opened a ROTH for both of us thru Myra.com. We are using it as a stash spot for misc. expenses in the next 3ish years.
The positives are it functions like any other online savings account.
The biggie is that it invests in the "G" fund security as found in the TSP for federal employees. The G fund is paying 2.13% at this time and there is no market risk or rate risk.
Only negative I can see for our needs is the 15K max. balance for each.
That isn't a negative, you just turn the myra into a roth ira.
Newbiehere I am not sure I follow the reason you say for umbrella insurance. It seems a waste to do something seperate in addition to home owners or property owners insurance and car insurance. Many of us kind of already do that bundling with insurances .
My comment is in response to more protection of leaving money in 401k, my husband's 401k is low expense but the rules are so strict and cumbersome. My preference is to move it to IRA and manage it myself. So many I wouldn't mind having an umbrella insurance for that purpose.
I guess, I don't consider insurance to be a waste of money, I pay for all kind of insurance. They are the cost of doing business.
My comment is in response to more protection of leaving money in 401k, my husband's 401k is low expense but the rules are so strict and cumbersome. My preference is to move it to IRA and manage it myself. So many I wouldn't mind having an umbrella insurance for that purpose.
I guess, I don't consider insurance to be a waste of money, I pay for all kind of insurance. They are the cost of doing business.
Understood and can relate. The rules for TSP are somewhat restictive until you understand them. I don't know your DH is like this but in TSP you have few options. One convert all or part to an annuity. Two take total or partial payment with partial then payed out over time. Three take payments over time.
The first option once in place no turning back or changing the annuity.
Second option taking total pay out might be good if there is a small balance that would not make much sense to keep. Or if there is a reason to like a small mortgage remaining that a lump sum might cover quickly. Issue here is that lump sum is taxable and could trigger a larger than necessary tax bite.
The third option is less restrictive in that you can adjust the payments. Once a year you can adjust the upcoming year's monthly payments. This gives you the chance to take more or less depending on your needs for the upcoming year. Maybe you plan a long trip and you might need more income during that. It could be something to make that a bit easier. Once started though you can never stop. You can go down to a monthly payment of $25.00. So that is something to consider.
Now the above information is for TSP and your husband's 401k might be like that but might not. Some folks told me that TSP was too restrictive so they were going to take their money out. After doing my research I found that I could work with those and keep my low expense funds intact.
The third option is less restrictive in that you can adjust the payments. Once a year you can adjust the upcoming year's monthly payments. This gives you the chance to take more or less depending on your needs for the upcoming year. Maybe you plan a long trip and you might need more income during that. It could be something to make that a bit easier. Once started though you can never stop. You can go down to a monthly payment of $25.00. So that is something to consider.
Now the above information is for TSP and your husband's 401k might be like that but might not. Some folks told me that TSP was too restrictive so they were going to take their money out. After doing my research I found that I could work with those and keep my low expense funds intact.
My husband was thinking of the third option. But he doesn't like to manage money, I do it for him. A few things that bother me is the tax withholding, you can not pay zero tax, at least that is my understanding right now, the other is if something happens to him, the money goes to me, but if I go quickly after that and the he money is still in TSP or any 401k, before we get a chance to turn it into an IRA, then our kids have to pay big money on the whole withdrawal amount and not be able to have the option of inherited IRA, i.e, they have to pay more tax. Another thing is the withdrawal is strictly a slice of your portfolio, you cannot take them from the G fund account only.
A few things to drive one crazy, I prefer to take care of them when I'm younger. But I also want to leave the option that I can transfer his money back, like leave a small amount, about $250 in his TSP.
My husband was thinking of the third option. But he doesn't like to manage money, I do it for him. A few things that bother me is the tax withholding, you can not pay zero tax, at least that is my understanding right now, the other is if something happens to him, the money goes to me, but if I go quickly after that and the he money is still in TSP or any 401k, before we get a chance to turn it into an IRA, then our kids have to pay big money on the whole withdrawal amount and not be able to have the option of inherited IRA, i.e, they have to pay more tax. Another thing is the withdrawal is strictly a slice of your portfolio, you cannot take them from the G fund account only.
A few things to drive one crazy, I prefer to take care of them when I'm younger. But I also want to leave the option that I can transfer his money back, like leave a small amount, about $250 in his TSP.
Let's see if I can assist since it is TSP that we are considering.
1. No you cannot go without paying tax but if you roll that into a Roth you have to pay the tax before it can roll. But if your income is not high then the tax will be marginal if you are taking it in smaller increments.
2. In your kids they have 5 years after to take the entire amount. This is also split in proportion to what you leave to each as your beneficiaries. It means they taking the amount over time so the bite isn't quite that bad either.
3. It is true that you cannot take the money from just the C or G funds. Your withdrawals are from all funds but this is a good thing because you can adjust as often as you want by doing interfund transfers. My plan is to keep G with a percentage balance of 40% which means that I have 60% in equities or C and S.
The idea I have and it should work nicely is as I get into December I look at the remaining balance and how the funds are balanced at. If the equity funds drop my balance will increase them to the proportion I want. If my equity funds rise and are more than what I have proportionally in G rebalancing them back will capture gains.
Lots of discussion is going to arise from this. It is going to depend on your combined retirement income. Combined in two ways. Spouse and you and all 401k, and IRA's that you are withdrawing from. Are you planning on taking lump sum? Will you continue to work? Will your spouse? What do you plan for the income? Just asking if a Roth is for you with almost no other information will not give you any good answers.
Here is my take. I have been back and forth on whether or not to convert my 401k to Roth. I have at this point figured it is not worth it. First I would be changing from an account that I think has done very well and the fees are very low to something unknown. Two I would still have to pay taxes on that income as it comes out so if I have any extra that I do not think I will use I will gift it to my daughter in the form of a retirement account for her. I will use that savings to enjoy my remaining years. I want to buy a boat and do some travel. But all of that is me. I have retirement income above and beyond all my savings. In fact my income will allow DW and I to travel to visit family in Korea any number of times at any time we want. Or we can visit golf courses around the world. No not in 5 star luxury but neither do we need to rent a canoe to go across the Atlantic.
Golfingduo,
I am sure it is a hard question. Here are the answers to your questions.
No, no taking lump sums (due to taxes).
I will continue to work (I hope), my wife will not.
Income = SSB + withdrawals from IRAs.
It seems we shall have about 0.5 million in our IRAs and 401Ks.
I hope this is enough to answer my question.
Thank you.
Golfingduo,
I am sure it is a hard question. Here are the answers to your questions.
No, no taking lump sums (due to taxes).
I will continue to work (I hope), my wife will not.
Income = SSB + withdrawals from IRAs.
It seems we shall have about 0.5 million in our IRAs and 401Ks.
I hope this is enough to answer my question.
Thank you.
Then my short answer is this. I would not. Yes it makes sense in someways to do this. If you find yourself with an abundance of cash and want to leave a legacy then gift it to your children in the form of a Roth preferably in a trust but only a lawyer can help there. But you are correct that a Roth would have been best started in the very beginning. That being said they are not that old so those who started them once they began are not yet ready to retire. They will help people that are in their early 40s now because they hit the workforce as those were introduced.
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