Expert advice needed ASAP

Cyberscum · July 2016

I ran into an investment I need to jump on immediately.

I am a gov employee and have a TSP account.

How can I withdrawal all of my TSP account while still in service without a hardship or life event? They will not allow any withdrawls in service unless those two requirements are met.

Can I roll the entire sum into a roth IRA or similar vehicle (401k) and withdrawal immediately?

I need some creative thinking ASAP.

....and yes I know the penalty, taxes, compounding interest blah blah blah.

This is a once in a lifetime opportunity and I am willing to take the hit.

Danielm7 · July 2016

I don't have financial advice, but good luck. Once in a lifetime opportunities that require you to liquidate investments immediately can become a really sad story in the future so hopefully it all works out for the best.

iBrokeIT · July 2016

Sounds like a terrible idea...

If you can't afford it without cashing out your retirement fund then it means you can't afford it. Not to mention trading a well diversified retirement fund for a single thing?

Why not get a loan from a bank or credit union? Probably be cheaper than the penalties and tax hit from cashing out your retirement?

Kyrak · July 2016

If you are trying to do it fast then it would be better to apply for a few 0% credit cards and do a balance transfer to yourself. Cashing out (what I assume is like a 401k) is a very expensive way to do anything with really bad tax ramifications. Not to mention that it would probably take 2 months to do all the rollovers and stock sales you would have to do. Or if it is as good an opportunity as you say, get someone to put up the money for you for a portion of the profits and make them payments.

thomas_ · July 2016

I really hope this isn't related to the other forum post that someone else started recently where they brag about their passive income and mentor especially if they are trying to sell you some training because they need to get you up to speed before you can invest with them.

You can come across "once in a lifetime" opportunities every week.

To answer your question, I believe with TSP you can do a general purpose loan up to half the value of your account or some maximum value figure that I can't remember. The loan repayments are then deducted from your paycheck. I believe you can also do withdrawals to purchase your home.

There is also the possibilty that you can transfer the money in your TSP account to another qualified administrator and set up a solo 401k, but you can only do this after you have left your federal employment and for the solo 401k I believe you would need to have an incorporated company set up. You could potentially do the roth ira thing after you left your current job, but you would get taxed since I believe the TSP is contributed to with pretax earnings, but the roth ira is setup for after tax earnings. If you had any tax-free contributions in your TSP once you did the transfer to another administrator those earnings wouldn't be able to transfer to the new plan and would be sent to you in the form of a check which would once again reduce the value of the account.

Finally, PLEASE do your due diligence for the person/company your trying to pursue this opportunity with. Start with googling their name and the name of their company to see if they have failed to honor any sort of contracts or commitments in the past and try to find out if anyone has sued them. There is something called PACER where you can sign up for account and do a search for their name and see what sort of civil litigation they have been involved in. I would also do a search of the court website for the state they primarily do business in to see if they have been sued. I would also go as fa as getting a credit report on them to see if they have had any past bankruptcies. If they are using an incorporated entity check your Secretary of State's website to see if the company does exist and is in good standing. If they can't keep up with the basics of keeping their company registered properly with the state, can you imagine how they would take care of your investment?

Also, please get everything in a written agreement and have it reviewed by a lawyer. Also, get some sort of collateral of equal worth to your investment in case they don't deliver on the deal. An unsecured promissory note is not collateral and practically worthless if they don't hold up their end of the deal. Sure you can sue them, but that takes time and money and also they might not have anything assets left for you to take. Then even if you do win a lawsuit you aren't guaranteed that you can collect on the judgement.

If they are promising astronomical returns please do yourself a favor and run without looking back. If it sounds too good to be true it probably is. Don't get caught up in the hype of how awesome it's going to be if it does succeed. Ground yourself in the reality of what will happen if things don't go as plan. Figure out how you are going to protect your initial investment. Be prepared to nail the person to the wall if they don't deliver on their contractual obligations.

networker050184 · July 2016

iBrokeIT wrote: »

Sounds like a terrible idea...

If you can't afford it without cashing out your retirement fund then it means you can't afford it. Not to mention trading a well diversified retirement fund for a single thing?

Why not get a loan from a bank or credit union? Probably be cheaper than the penalties and tax hit from cashing out your retirement?

Excellent advice in my opinion.

Expert advice needed ASAP

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