When a withdrawal from the TSP is made, the money is proportionally withdrawn from all funds. For example, if my TSP consisted of 50% G fund and 50% C fund and I make a $1K withdrawal, $500 will be removed from both funds. The TSP won’t allow me to take out the $1K from a single, specified fund.
This is a real headache if you want different pots of money earmarked for things like making withdrawals, or long-term growth. There are work-arounds to this issue, such as rebalancing funds at the time of withdrawal or doing a rollover into an IRA. But this moving of money around carries the risk of buying high/selling low because the markets may change between the time a withdrawal is made and when the rebalancing takes place.
Is there a rational reason why the TSP doesn’t allow you to target specific funds for making withdrawals? And, am I overthinking the rebalancing/rollover to IRA aspect?
This is a real headache if you want different pots of money earmarked for things like making withdrawals, or long-term growth. There are work-arounds to this issue, such as rebalancing funds at the time of withdrawal or doing a rollover into an IRA. But this moving of money around carries the risk of buying high/selling low because the markets may change between the time a withdrawal is made and when the rebalancing takes place.
Is there a rational reason why the TSP doesn’t allow you to target specific funds for making withdrawals? And, am I overthinking the rebalancing/rollover to IRA aspect?
Statistics: Posted by BHamTallMan — Wed May 15, 2024 11:22 am — Replies 5 — Views 275