Dollars and Cents: Should I Invest Into a TSP (Thrift Savings Plan) or a Roth IRA?

Being a Veteran, you are aware of many of the TSP options that exist for us current service members. I am currently enrolled in the Roth TSP and contributing consistently. While the TSP is great and easy to use, it doesn’t offer much in the way of detail. My question to you is – would it be beneficial to have someone manage a TSP Account much like a portfolio? Do you think I should do a Roth IRA instead? Thanks!

Resources:

With each Dollars and Cents video we want to provide some follow up links where you can get some additional information on the topic. If you are interested in learning more on how to open a Roth IRA, find a fee-only financial advisor, or look at your investments at a deeper level, here are some relevant reads:

  • National Association of Personal Financial Advisors – If you want a fee-only financial advisor that can review your portfolio and long-term plan for you, this is the place to look.
  • Best Places to Open a Roth IRA – I love the Roth IRA because you can pick out the specific investments. You have more control and there is more transparency. Plus, if you’re not happy you can always find a new broker. This list is the best places to get started with a Roth IRA.
  • Personal Capital Review – Nathan’s problem with his TSP is the investments are generic and he doesn’t really know what he’s investing in. If Nathan opens a Roth IRA with a great broker he can use Personal Capital as a way to help get better clarity into his portfolio. It’s a free tool that can combine all of your random accounts into one clear view of your overall portfolio.
  • Personal Capital Video Review and Walkthrough – I like Personal Capital so much I had Kevin do a walkthrough for you guys on it. Best part about this tool? It’s 100% free. Crazy!
  • 8 Warning Signs You Need to Fire Your Advisor – Be careful when selecting a financial advisor. If you see these problems, cut bait and find a new one.
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Comments | 2 Responses

  1. says

    One of the top five concerns of the modern investor is retirement plans, and another is finding a trusted advisor to help with those plans. As we put in our article here: http://www.healthwealthlove.com/modern-investors-financial-concerns/
    It is great you are providing a good guide to finding a fee-only financial advisor. I certainly like the idea of the Roth 401k, who knows what the future may bring but if you can afford to trade a tax break now, at least that is one less headache in your dotage.

  2. says

    As both a federal employee and a lover of Roth IRAs, I feel I have a duty to remind the individual that wrote you that they get a 5% match from their employer when they contribute to the TSP. This fact cannot be overlooked.

    I get that the TSP may have a lack of options, but you get a 100% Return on Investment on the first 5% you contribute. You will NOT get that ROI on your Roth.

    Almost sounds like you prompted him to go Roth first up to $5,500 max, then if he has leftover visit the TSP. That’s crazy. TSP up to match, then go to Roth if that’s what tickles your fancy.

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