I am employed by USPS and have money in TSP. My husband is retired and has his money in an IRA which he is paying 1 and half percent to his advisor. We were thinking of transferring that money into my TSP to avoid paying his fees. He is 61 and I am 62 and also was thinking of drawing our social security at 62 in order to let our savings grow. . . . and our thinking was we could make more in interest than our social security would grow from 62 to 66. Is this a bad move?

Terry Says:

First, the reason it is called an “individual” retirement account is that the money is his — and cannot be moved into your TSP.  However you are absolutely correct that it is nuts to pay an “advisor” 1-1/2 percent in annual management fees.  Call Fidelity at 1-800-FIDELITY and ask them about doing a direct rollover from his current IRA to one at Fidelity.  Chose a fund such as their Equity-Income or balanced fund, very conservative but with the possibility of growth.    Then he should keep contributing every year!

Don’t start taking your Social Security until Full Retirement Age — about 67 in your case.  Taking it earlier not only permanently lowers yhour payout, but all future cost-of-living increases will be based on this lower amount.  And yes, inflation will return during your retirement years.  Taking the money early is the equivalent of costing you about 7% a year.

The best thing you can do is guts it out and keep working until age 67.  Then your TSP, IRA, and Social Security will give you the maximum lifetime benefit.  Don’t quit just before you reach the finish line!

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