Category Archives: FERS Retirement

The TSP’s Fatal Flaw

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DigitalPiggyBank

It’s a well-documented fact that I am a big fan of the Federal Thrift Savings Plan (TSP), which is Uncle Sam’s version of the 401(k).

It’s also well documented that I’m a critic of TSP for being a bit too Vanilla.  The Vanilla investment offerings in TSP are a likely cause for the $10 Billion in closed TSP accounts last year.  Due to the wonders of the G Fund, I’m no advocate of zeroing-out your entire TSP balance, but recently FedSmith.com put together a good argument pointing out the ‘other’ fatal flaw in TSP- The inflexibility of TSP withdrawals. Continue reading →

Idiot’s Guide to Day Trading the TSP

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TSP Hardship Withdrawal Costs

DigitalPiggyBank

Recently FedSmith’s John Grobe posted a list of ‘TSP Allocation Services’ offering advice (at a subscription fee) for  TSP participants.  This includes the TSP’s own L Funds plus 3rd party allocation service providers.  Among the most popular 3rd party advisers are:

  • TSPsafetynet
  • TSPPilot
  •  TSPInvesting
  • TSPFolio

I’ve been asked by some of the 3rd party TSP allocation advisers above if I would provide a link to their service- Here is my overview and rationale for not doing so below. Continue reading →

TSP (Finally) to offer Mutual Funds- Good Idea?

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Thrift Savings Plan Guidance for Federal Furlough

TSP’s Executive Director is having a change of heart.

Recently the Federal Retirement Thrift Investment Board (FRTIB – the group who runs the TSP) announced that it will finally (and they really mean it this time) consider adding a Mutual Fund Window option to the TSP.    FRTIB is commencing a study that will last through 2015 on how best to implement the Mutual Fund Window option.   Continue reading →

GAO Says There is Too Much Money in your TSP/401k/IRA

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TSP Hardship Witdrawal

TSP Hardship Withdrawal Costs

Recently the non-partisan (cough, cough) GAO conducted a study investigating large (> $5 Million) IRA balances.

According to WSJ, this study was prompted by the disclosures of Mitt Romney and Silicon Valley entrepreneur Max Levchin that they each have IRA balances worth tens on millions.

The GAO concluded in its preliminary study (GAO-14-878T):

In 2014, the federal government will forgo (emphasis mine) an estimated $17.5 billion in tax revenue from IRAs.

GAO will release a separate report with its final results on individual retirement accounts later this fall.

What prompted this study? Congress is reportedly upset about the super-sized IRA balances because (according to GAO) :

Congress limited annual contributions to IRAs to prevent the tax-favored accumulation of unduly large balances, but concerns have been raised that tax benefits accrue primarily for higher -income individuals.

Back to the cases of Mitt and Max… Continue reading →