Recent Feedback
I am a retired federal employee with a substantal amount in my Thrift Savings Plan. I left the money in the TSP rather than roll it over to an IRA because I was told it was the best way to avoid high fees. Recently I was told that it would be better tax-wise for my heirs to take the money out of the TSP and put it in a Roth IRA . What do you recommend?
I would roll the money over to an IRA. You can invest in anything, so if fees are an issue, make sure that is clear up front. If taxes to your beneficiaries are a concern, make sure that they are named as either primary or contingent. It is common to have a spouse as a primary beneficiary and children as contingent. They can roll the funds to their own IRAs when you die, which defers the taxes.
Once the funds are rolled to an IRA, you can convert the IRA to a Roth by simply paying taxes on the balance. In 2010, you can split the tax burden over the next two years.
Experience: 7