I found out that I have the option to withdraw my TSP when I get out of the military and I'm going to college when I get out where the money would ensure I wouldn't have to worry about bills.
What is the better choice:
Leave it in my TSP for retirement
Withdraw it for college with approx 22% taxation
Withdraw it (with 22% taxes) and reinvest it in a roth IRA
2007-08-28 18:50:25 · 4 answers · asked by Jon 4 in Politics & Government ➔ Military
Ms. jvb is right, use your GI Bill monies. If you don't mind being a weekend warrior , do the NG and get state plus federal aid for school. When you graduate you can continue to add money in your TSP for retirement or reinvest it in your IRA if you take a job in the private sector.
2007-08-29 01:48:58 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Since it doesn't sound like you're not going to be working for the government when you get out, so my recommendation is to take it out and reinvest it.
If you leave it in and are not working for the gov't, you can't add to it. With an alternate investment, you can add to it and increase your retirement funding. Since you don't mention what you have your TSP currently invested in, you have to look at the interest rate TSP is giving you against the interest rate you can achieve with a Roth IRA or CDs.
Since you have, at least, the GI Bill for your college, and will qualify for additional grants/loans, I would NOT use the money for college unless it is absolutely necessary.
2007-08-29 01:36:54 · answer #2 · answered by My world 6 · 0⤊ 0⤋
why pull TSP monies when you have the GI Bill?
Why lose 22% just to put it right back into an IRA?
Leave it where it is. you can always rearrange where the money is invested to get a higher rate of return.
You've gone this far without the money, let it continue to earn interest for you for later on in life.
2007-08-29 01:40:46 · answer #3 · answered by Mrsjvb 7 · 2⤊ 0⤋
You seemed to answer your question yourself by putting Leave it my TSP for retirement choice first. 22% taxation is exorborent. Plus the money will always be there if you need it at a later time. I just don't believe in giving money away, and taking a 22% taxation is doing just that. Remember the rich don't get richer by giving money away. But.....remember this is your choice and you should make the final decision. Good luck!!!
2007-08-28 19:30:01 · answer #4 · answered by Anonymous · 2⤊ 0⤋