Lets say, hypothetically, I have about 0,000 in a Thrift Saving Plan account I have from being in the Air Force for 20 years. I’m going to retire and I wanted to throw it all into an IRA account and start investing online with an online broker of some sort. Could I roll over the entire amount or is there a maximum allowed? What would be the better choice of IRA accounts with this kind of money? Roth? Traditional?
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Net Advisor 9:02 pm on February 18, 2010
I am not an expert in TPS plans. They seem to be similar to gov sponsored 401(k)s.
http://en.wikipedia.org/wiki/Thrift_Savings_Plan
It look to me like this is not a problem. if you roll it over you MUST do it in an "IRA Rollover."
If you roll it over to a Roth the ENTIRE account will be subject to ordinary income tax. if you are under 59 1/2, the IRS will tack on an additional 10% penalty of the gross.
I would be very cautious of putting your money in an on-line broker and start gambling with it in the market. You could wipe out your retirement and then what?
If you have lots of assets I would seek the advice of a professional advisor with 15+ years retirement planning and market experience.
Good Luck!
Common IRA Rollover Mistakes
http://www.investopedia.com/articles/retirement/06/rollovermistakes.asp
Judy 9:02 pm on February 18, 2010
Ask the question under the investing section. There seems to be a whole lot of experts over there.