Thrift Savings Plan (TSP) is a retirement account offering participants access to five diverse funds that allow for investment options and professional asset allocation adjustments over time.
Many investors, such as Ray Dalio of Bridgewater Associates, advocate a 5 to 10% allocation in precious metals as an effective strategy for diversification. But how can you add gold to your TSP account?
Investing in Gold Through the TSP
Individuals interested in diversification and inflation protection will find that investing in gold mutual funds provides them with more options, while self-directed IRAs can transfer TSP funds directly into physical precious metals that have historically proven themselves an effective inflation hedge and diversifier.
Federal employees and military members who participate in the Thrift Savings Plan (TSP) can contribute money from their paychecks into an investment account for retirement savings. The TSP offers various investment options – five individual funds and five Lifecycle funds which adjust automatically based on an expected retirement date – in their retirement investment accounts.
G funds offer safest investments while F funds feature higher risk but higher return bond securities such as Treasury agency mortgage-backed, corporate, and foreign bond securities. Finally, those looking for additional exposure can invest in C fund which allows access to S&P 500 stock index.
Investing in Gold Through a Self-Directed IRA
Investment in gold through a self-directed IRA allows you to diversify and protect your retirement savings against inflation, but be sure to consider your risk tolerance, retirement income needs and time horizon before undertaking this type of investment.
You can open a new retirement account and move assets from an existing 401(k), 403(b), 457 or Thrift Savings Plan account into it; however, this process must be carried out correctly to avoid taxes and penalties.
Noble Gold offers another option for purchasing physical precious metals directly. They provide secure and responsive services, such as the option to sell back at market prices at any time you desire; their prices are competitive; fees significantly less than traditional broker-based IRAs due to markup, storage costs and insurance premiums; they charge only 2.9 basis points annually per $1000 held in your account at Noble Gold!
Investing in Gold Through a Direct Rollover
One of the easiest and best ways to invest in gold is with direct rollovers. This process enables you to transfer funds directly from your Thrift Savings Plan into an SDIRA; but before beginning it’s important to understand all the rules surrounding rollovers as failing to follow them could trigger tax events and costly penalties.
An SDIRA allows you to invest in various assets, including physical precious metals. These precious metals don’t carry the counterparty risk associated with stocks, bonds and real estate and have historically held their value throughout time.
Gold investments tend to be less correlated with traditional asset classes like stocks and the dollar than traditional assets like property or bonds, making them an effective diversifier in a portfolio. Keep in mind, though, that physical gold might not help you survive zombie or other catastrophic apocalypses as effectively. Therefore, invest in an ETF instead as this solution provides greater liquidity and easier access in case of collapse.
Investing in Gold Through a General Purpose Loan
Gold has long been seen as a reliable investment, valued by both sovereign states and individuals for its ability to withstand economic instability. Due to this fact, including some gold investments into your retirement account may prove advantageous.
Unfortunately, the Thrift Savings Plan (TSP) does not permit its participants to invest in physical precious metals or gold exchange-traded funds; however, there may be ways around this limitation.
One option available to you is performing a direct rollover from your TSP into an individual retirement account (IRA). This process enables you to transfer the funds directly from TSP into an IRA without receiving a check from TSP.
Please remember that direct rollover will produce taxable income and penalties, making the process time-consuming and complicated to navigate. Therefore, it’s often wise to seek professional guidance before attempting a direct rollover; that way you can ensure your taxes are handled appropriately while your investments remain protected.