The Foreign Service Journal, December 2003

elects to pay the taxes from the amount converted. It can be difficult to determine whether converting a Traditional IRA to a Roth IRA will be beneficial. But there are resources available over the Internet to help with the calculations and analysis. You may also wish to consult with a professional financial adviser to help you make this impor- tant decision. Can I roll over my TSP into an IRA? Employees who leave the Foreign Service on retirement or after resigna- tion may elect to roll their Thrift Savings Plan retirement account into a Traditional IRA. A rollover can enhance access to retirement funds, provides a very wide range of invest- ment possibilities, and enables savings to continue to grow tax-deferred. In addition, once you reach 70 1 / 2 , a rollover may give you greater control over the way in which you are required to take funds out of your account. Many regulations govern rollovers, so employees should contact their financial and tax advisors regarding potential penalties and withholding requirements. Choose to act rather than react Managing your retirement plan assets wisely is one of the most impor- tant financial challenges you may face. For many Americans, a qualified retirement plan represents the single largest asset in their portfolio, worth even more than their home. Many personal, tax and estate planning deci- sions must be considered before rein- vesting and reallocating retirement plan assets, because the wrong deci- sion can quickly open a large portion of your retirement assets to taxes and penalties. Thus, an IRA can be an important consideration in the process of retire- ment planning, but should be evaluat- ed carefully beforehand in consultation with your financial and tax advisors. Moreover, retirement planning should be an integral component of an overall investment plan for any person. ■ Retired FSO Stephen H. Thompson is a financial advisor at Legg Mason WoodWalker, Inc., a diversified securi- ties brokerage and financial services firm that is a member of the New York Stock Exchange, Inc., and of the Securities Investor Protection Corp- oration (SIPC). He has been an AFSA member for more than 25 years. The views expressed herein are the author’s own. 22 F O R E I G N S E R V I C E J O U R N A L / D E C E M B E R 2 0 0 3 F S F I N A N C E S The Embassy Plan Overseas Insurance Personal Auto & Contents Coverage Experience that helps you avoid the pitfalls of a highly complex business. Repeat business that results from providing what’s best for the customer not the agent nor the insurance company. Since 1969, Harry M. Jannette International has provided dependable coverage with U.S. carriers with a financial rating of A+ or higher to thousands of Foreign Service Personnel worldwide. Thus you gain the broadest U.S. terms and conditions and flexible value limits often not available from other insurance carriers. MAJOR CREDIT CARDS ACCEPTED: SEE OUR WEBSITE APPLICATIONS Harry M. Jannette International, L.L.C. 8111 LBJ Freeway, Suite 585 Dallas, Texas 75251-1334 Toll Free (800) 256-5141 (972) 783-4915 Fax (972) 783-0545 E-mail: h mjintl@jannetteintl.com w ww.jannetteintl.com • WORLDWIDE COVERAGE Fire, theft, comprehensive and collision protection are available at foreign posts. • U.S. AUTO LIABILITY Available for short term on home leave, change of assignment, and new auto purchase prior to foreign departure. This coverage must be issued in combination with an “Embassy Plan” policy. • FOREIGN LIABILITY Contact your post for compliance with local laws, Excess liability limits are available over local liability coverage. • PERSONAL COVERAGE Household goods and transit, valuable articles, personal liability, life insurance . • EMPLOYEE ASSOCIATION INSURANCE Employee association insurance Including directors and officers. Your Reliable Choice