Thrift Savings Plan Investors

[cnocmmz]

Good Day
DW and I both left the work force in early Dec Now looking at the market craziness and are thinking when things ever settle down and hopefully recoup market losses to leave the US Government TSP for some better choices with either Vanguard, Fidelity or some others investment platform and just go with ETF's.
Since we have pretty good pension incomes not too worried about needing that income in the near future although who the heck knows in this turbulent stock market environment. In any case, would like to hear some thoughts from those folks who have moved investments from that TSP platform to something different and has it been as cost effective and profitable?
Thanks.

 

[HawkOwl]

For the long term, buy and hold investor, I don’t believe that there is a better platform than TSP. Some may equal them, but none exceed their low expense ratios. Day traders may have difficulties with TSP, and if you and your spouse can’t agree you may have difficulty unilaterally getting at the money (if that is a negative) but beyond that? I have a TSP account and a vanguard account, and would not consider changing them.

 

[cnocmmz]

Thanks Hawk Owl.
So, you kept your tsp and just opened a trading account with Vanguard? And, have you started withdrawing your tsp funds as income?
Thx

 

[donheff]

I kept part of my TSP in the G Fund - there is nothing else like it. I moved a portion to Schwab where I can write checks to get QCDs.

 

[corn18]

When I retired in 2008, I left my TSP balance in my TSP. It was only $1700. I forgot all about it until 2016. It was up to $3200. I was going to pull it out and move it to Fidelity where all my other accounts are but left it because the good folks on the fora said the G fund is unique. Okee dokee. Did that.



I have all my fixed income in my 401k. I retired last year after I turned 55 and my 401k has a great stable value fund and great options for withdrawals. If I didn't have a great SVF, I might move it all into my TSP G fund. G fund might be great as interest rates rise and bond fund NAVs drop.



If I had a boatload in a TSP, I would look hard at the withdrawal restrictions. If those fit your needs, then just leave it there. If they don't or you want to do more than index, move it out but leave some in the G fund. Once you close out your TSP, you can't get back in.

 

[clifp]

For the long term, buy and hold investor, I don’t believe that there is a better platform than TSP. Some may equal them, but none exceed their low expense ratios. Day traders may have difficulties with TSP, and if you and your spouse can’t agree you may have difficulty unilaterally getting at the money (if that is a negative) but beyond that? I have a TSP account and a vanguard account, and would not consider changing them.

I don't have a TSP account but I wish I did. I think TSP, is really the model for how 401K, retirement plans should be in the US. Very low expenses, very easy to understand.

Now the TSP website needs work, as do almost all government website, but
plan is great. You certainly have more flexibility and Schwab, Fidelity, or Vanguard, but I see no reason to move money from the TSP.

 

[zinger1457]

If I had a boatload in a TSP, I would look hard at the withdrawal restrictions.

TSP made major changes in 2019? and a lot of it involved changes to the withdrawal options, they seemed like major improvements to me, at least a lot better than it used to be. What do you feel is restrictive in the current withdrawal options?

 

[corn18]

TSP made major changes in 2019? and a lot of it involved changes to the withdrawal options, they seemed like major improvements to me, at least a lot better than it used to be. What do you feel is restrictive in the current withdrawal options?

Dunno, didn't research it.

 

[grayv]

I would definitely leave enough in TSP to keep the account open.

it has the G fund, for fixed income purposes.

and there is talk of the TSP having a lot of mutual fund choices soon. https://www.myfederalretirement.com/tsp-mutual-funds-2022/

 

[W2R]

For the long term, buy and hold investor, I don’t believe that there is a better platform than TSP. Some may equal them, but none exceed their low expense ratios. Day traders may have difficulties with TSP, and if you and your spouse can’t agree you may have difficulty unilaterally getting at the money (if that is a negative) but beyond that? I have a TSP account and a vanguard account, and would not consider changing them.

+1

 

[Dreamer]

I left my money in the TSP. I have not taken any out of it yet.

I also have an account with Vanguard that was started prior to my retiring. I have not taken any out of it either.

 

[HawkOwl]

Thanks Hawk Owl.
So, you kept your tsp and just opened a trading account with Vanguard? And, have you started withdrawing your tsp funds as income?
Thx

Other way around. I had a retirement account (eventually transferred to vanguard) before I became eligible for tsp.

And my cashing out pattern is not as well organized as that. I live off my pension, and only dip into my retirement accounts for occasional episodic expenses.

 

[rwdflynavy]

I retired from Uncle Sugar's Navy in 2018 with about 1/3rd of our investments in TSP. I left it there because at the time the low fees could not be beat.

Moved my IRAs to Vanguard and I'm thinking I'll move my TSP investments to Vanguard as well. I'm an index guy and the low fees at Vanguard are as good/better than TSP at this point and accessing the money is much more flexible.

I'm just inherently lazy, so I'm intimidated about the required Kabuki dance to move the money out of TSP.

 

[Lawrencewendall]

2022 will my 3d tax year in retirement. I have monthly installments from TSP and once yearly conversions to Fido Roth. If I just wanted to have my installments with no change, I wouldn't have to do anything but I want conversions every year up to top of 12% bracket so it requires pages 1-3 (installment), be notarized even though there is no changes and page 4 to be completed by Fido saying they will accept the money. Kind of cumbersome to do every year.

EDIT: my TSP is 100% S Fund and my Roth is monthly/quarterly dividend payers.

 

[GTP2022]

https://www.barfieldfinancial.com/new-blog/barbell-strategy-what-to-do-with-my-tsp-again

This is a great website for TSP and FERS info. This article is informative as well.

 

[ExFlyBoy5]

Also have a TSP and have left it alone after retiring in 2014. I looked at rolling it over to a brokerage, but was too much of a pain. It's in the L2050 plan and is making good returns. And with an expense ratio of 0.049%...well, no real reason to touch it.

 

[RE2Boys]

I've kept my TSP account since retirement in 2001, twenty years. I rolled over a small 401k account INTO the TSP a few years ago to reduce number of accounts I need to track.

As many have said, the G Fund is unique among bond funds, as interest rates increase, the value of the fund never decreases like other bond funds. For an indexer, the TSP is hard to beat. My current money is split between G fund and Life Cycle Income Funds.

Have no idea what withdrawal problems others allude to since the major revamp about two years ago. I've started RMDs but mine were very simple: the entire RMD went for year end federal withholding in lieu of filing estimated taxes.

Since I have a basis in Traditional IRAs, it is a very bad idea to role my 401k anywhere.

 

[gattara]

My DH retired in 2014 and we kept our investments in TSP. I join in the chorus of others here singing the plan's praises. We have monthly withdrawals.

 

[JDARNELL]

I've started RMDs but mine were very simple: the entire RMD went for year end federal withholding in lieu of filing estimated taxes.

.

That’s a great idea.

 

[jazz4cash]

As many have said, the G Fund is unique among bond funds, as interest rates increase, the value of the fund never decreases like other bond funds. For an indexer, the TSP is hard to beat. My current money is split between G fund and Life Cycle Income Funds.

Have no idea what withdrawal problems others allude to since the major revamp about two years ago.

+1
Lifecycle Income is a gem. Of course it’s pretty easy to replicate the AA of the Lifecycle funds. Not sure if the ER is much different. Really glad to hear the revamped withdrawal options are beneficial to you. We’re not doing withdrawals.

 

[Paulz]

For the long term, buy and hold investor, I don’t believe that there is a better platform than TSP. Some may equal them, but none exceed their low expense ratios.

Actually, they stopped being the lowest expense cost years ago. Here is a great article talking about it back in 2018:

https://naps.org/files/galleries/TSP_No_Longer_Low_Expense_Leader.pdf

Another article on their increasing expenses- https://stwserve.com/expense-ratio-of-tsp-funds-are-increasing-by-30-in-2021-and-2022/

If you want to play with TSP's new mutual fund window, this article outlines those costs: https://www.fedsmith.com/2022/01/27/tsp-mutual-fund-window-more-options-risk-expenses/

 

[HawkOwl]

Actually, they stopped being the lowest expense cost years ago. Here is a great article talking about it back in 2018:

https://naps.org/files/galleries/TSP_No_Longer_Low_Expense_Leader.pdf

Another article on their increasing expenses- https://stwserve.com/expense-ratio-of-tsp-funds-are-increasing-by-30-in-2021-and-2022/

If you want to play with TSP's new mutual fund window, this article outlines those costs: https://www.fedsmith.com/2022/01/27/tsp-mutual-fund-window-more-options-risk-expenses/

I don’t understand the first article by Wald. He seems to imply that Fidelity is opening up “free” mutual funds, something very unlikely in a for-profit company.

Butt then he goes on to say: “Both Fidelity and Vanguard’s ETFs, while commission-free, are not free of expense fees, but provide a wide range of investment options at a low cost.” He does not list what their expenses actually are.

I believe that TSP is also commission free.

 

[corn18]

I don’t understand the first article by Wald. He seems to imply that Fidelity is opening up “free” mutual funds, something very unlikely in a for-profit company.

Butt then he goes on to say: “Both Fidelity and Vanguard’s ETFs, while commission-free, are not free of expense fees, but provide a wide range of investment options at a low cost.” He does not list what their expenses actually are.

I believe that TSP is also commission free.

Maybe he means the Fidelity Zero funds that have zero expense ratio?

 

[yakers]

There are other costs/efficiencies beyond the ER, of course zero ER is good, very good, but there are tracking and trading errors/adjustments, two low or zero cost S&P500 index funds will not necessarily have identical performance although they may be close enough to be insignificant. The TSP is just fine, don't justify dumping it because Fidelity or someone else offors a zero ER. I did move some $ from the TSP to Wells Fargo IRA to hold assets not covered by the TSP like foreign bonds, (don't ask how thst went) and REITs. And I like doing QCDs from my IRA but hanging on to the TSP G Fund as there is just no better place for cash right now.

 

[NomDeER]

I don’t understand the first article by Wald. He seems to imply that Fidelity is opening up “free” mutual funds, something very unlikely in a for-profit company.

Butt then he goes on to say: “Both Fidelity and Vanguard’s ETFs, while commission-free, are not free of expense fees, but provide a wide range of investment options at a low cost.” He does not list what their expenses actually are.

It looks the zero expense funds are traditional mutual funds and not ETFs. The ETFs do have expense fees. They are losing a little money on the ZERO funds. According to some of the articles, they are doing this as loss leaders to get people to move money to Fidelity and then they try to get them to move some of their money elsewhere within Fidelity. That strategy may work particularly well for young new investors.

For me, at this point, I don't think it's worth it to move my money over to Fidelity for the zero funds because the TSP fees are still so low and I don't know how long those Fidelity fees will stay at zero. And I do like the G Fund. But, TSP fees have been slowly increasing. There may be a tipping point for me at some time.

I want to see what changes TSP makes. My biggest frustration right now with TSP is the limit on interfund transfers. I would have liked to have made more transfers from my G Fund to other funds this month. Since I've just retired early and the market is so volatile, I would prefer not to be investing much of my cash reserves into the market outside of retirement accounts.

Of course, it's not all or nothing. I could just roll over some of my TSP to Fidelity or Vanguard. I already have investments at Vanguard and Fidelity in some capacity.