New guy & question on multi accounts

[Bimmerbill]

Hello all,
     I've posted a few times and thought I'd introduce myself.
     I am 39, wife 41, having our first child in 1 month.  Yeah I know we got started late!
     I've been working in the federal government for almost 10 years total, after a 2 year stint at a major telecom firm which ended in a layoff in 2002.
     As a result, I have 3 401K accounts and have been wondering if I should consolidate them. 
     As a federal employee I have an account in the TSP system, which has low costs but limited choices.  I also have an account at Fidelity (about $36K in Fidelity 2030 asset alloc funds), and around $18K in USAA funds (mix of S&P 500 index and cornerstone strat fund, USCRX and USSPX). 
     I am interested in everyone's opion of the TSP program and if the new lifecycle funds are worthwhile. 
     I've been in the army national guard for 21 years, so I am set up for a limited military retirement at age 60. 
     So, any TSP experts out there?  I was considering putting all my funds into the 2040 lifecycle account...

Thanks!
Bill
     

 

[brewer12345]

I cannot comment on the TSP, but have you thought about life insurance now that you are about to become a dad?

 

[ats5g]

Bill,

I believe that maddy is wrong. The ability to roll the 401(k) over into an IRA is usually governed by each plan's rules, but you generally can roll the 401(k) over anytime you please after you separate from service.

My wife has the TSP and we use it for International [I fund], mid/small [S fund], and bonds [G fund]. I love the low, low expenses, and indexing of course. We use my 401(k) and our IRA's for other asset classes [REITS, TIPS, value tilt]. There is certainly nothing wrong with the L 2040 fund. You could certainly use nothing but lifecycle funds in your TSP and IRAs [like Vanguard's Target Retirement funds]. That'd make it really, really simple.

Consolidation would probably make managing your investments much, much easier.

- Alec

 

[JPatrick]

You should be able to roll your old 401ks into a new rollover IRA at Fidelity(or elsewhere) with no problem.  You'll probably be glad you did.
Not a TSP expert, but I tell everyone with a S&P500 fund to consider switching to a total stock market fund.  That thought is based on the past of course, but I think that part of the past may well repeat.
You didn't mention any foreign funds in your holdings.  If that is the case I'd considering making them about 30% of your portfolio.
By the way, did you know you were kind of late with the kid thing?

 

[Bimmerbill]

Yeah, we figured we give the kid thing a try. I guess it worked!

The TSP lets me roll over other 401k plans into it. Most of my TSP money is in the S&P fund (C fund), but I've changed my current contributions to 20% international (I fund) and 20% S fund (wilshire 4500). I need to rebalance what is in there tho.

Yes, I've checked my life insurance. Between Servicemans Guarantee Life Insurance and the plan available thru my federal job I think I am all set. I do need to add some more for the wife.

How does everyone feel about the lifecycle funds in general? I am tempted to make the switch...

I know my asset allocation is off.

 

[Nords]

The TSP lets me roll over other 401k plans into it.  Most of my TSP money is in the S&P fund (C fund), but I've changed my current contributions to 20% international (I fund)

How does everyone feel about the lifecycle funds in general?  I am tempted to make the switch...

If you can put all your 401(k)s into the TSP and reap expense ratios of only 5-6 bp for the next 20 years, it really doesn't make much difference what funds you invest in.

But the lifecycle fund sounds fine.

Take a look at your projected retirement expenses and determine how much of that is covered by your pension(s). You may decide to regard pension income as the equivalent of a bond portfolio and you might also decide to boost your TSP stock allocation. You could even just split your TSP contributions between the S & I funds. In any case, try to max out the match and perhaps max out your contributions. We're putting every penny of spouse's Reserve income in the TSP this year.

 

[Bimmerbill]

I know this year they removed the 15% maximum on contributions to the TSP, but don't know if they removed the 10% max on the national guard side. I easily get the 6% matching on the federal side, but there are no matching on the national guard side.

Interesting thought about treating the pension income as a bond portfolio.

At the beginning of the year I increased my TSP from 15 to 16%.

 

[JPatrick]

About a year ago I took a long look at several lifecycle funds and found them to be to heavy in the bond allocation (for the persons age) which resulted in a somewhat subdued performance.  On the other hand,  if your are seeking something that comes close to "set it and forget it" this may be your answer.

 

[Nords]

I know this year they removed the 15% maximum on contributions to the TSP, but don't know if they removed the 10% max on the national guard side.

DFAS-CL just put out message DTG 301630Z Jan 06 "Reserve & Guard Pay Advisory 01/06" that says all uniformed services members (even NOAA & USPHS) "may elect to contribute 100% of their remaining base pay after deductions to TSP."

That seems to mean that after your SS & Medicare deductions, the entire remainder of your Guard paycheck-- up to $15K-- could go into the TSP. You could draw on taxable accounts for your living expenses and effectively move $15K to a tax-deferred account. There's probably additional complications for civilian federal employment, matching, catch-up contributions, & IRS limits on total contributions, but they claim it's all on the TSP website. Somewhere in there!

 

[yakers]

I have studied the TSP as much as an amatuer can and have a few bits of opinion to add but ultimately always a question. This issue is sometimes discussed on the Vanduard Diehards with some insight and ther is TSP TALK which is mostly junk .I have transferred  one traditional IRA and am in the process of transferring another to the TSP program. I believe it was "Mr AA" (Bernstien) who said all you actually need are three funds, total stock mkt, total foreign stock and a total bond. You have exactly that with the TSP and even one better as you have th G Fund. And L Funds too! IMy old IRA was with Oppenheimer (OPTFX) had it since about 1986, it did OK considerring the little knowledge I had of things financial. But ultimately even most successful managed large stock funds tend to be closet index funds over enough time, so why not own the index? There are reasons to keep some separate funds if you want to add  asset classes and have other flexibility, like later rolling a Traditional IRA into a Roth IRA. But you can get some flexibility by using a Roth or after tax fund as well. But don't under rate the TSP as the substantial core of retirement planning.
And then there is the question that always remains, just what is the G Fund? For me its about the only bond fund I like, it may be the only bond fund you need to own.
I now want to simplify my accounts and that is why I am consolidating my IRAs into the TSP. I had 40% G, 20% C, S & I (no F) before I started putting all new contributions into the L 2020 Fund, right now it is about 35% of my TSP, I didn't put everything into the L as I didn't want to hold too much of the F Fund (total bonds) I think the 2020 is about 8% F/bonds and this reduces the holding. I expect to retire in the next year or two and would probably just move everything into an L fund and began monthly withdrawals.
Thats my plan and I'm sticking to it. At least for now.

 

[Jeb-NY]

Ok I'm lost and as the keeper of the acronyms FAQ I'll ask the dumb question for all the rest of us slow learners.

What is a TSP?

What is a G, F, C, L Fund?

Jeb

 

[gindie]

TSP - Thrift Savings Plan (The 401K-like plan for the federal government  and the military)

The individual funds in the plan:

G - Government securities
I - International Index
C - Common Stock Index (S&P 500)
S - Small Capitalization Stock Index
F - Fixed Income Index
L - Lifecycle funds (2040, 2030, 2020, 2010, Income)

 

[yakers]

Here, let me staple that TSP (TPS?) Report with my red Swingline stapler......

 

[Bimmerbill]

Yeah, the lifecycle funds are always too heavy in bonds for me too, so I take a fund that is beyond my targeted retirement date. So, I'll go for 2040, instead of 2030 for instance.

I will have to bump up my army TSP contributions. Thanks for the info!

I've signed up for a class in Investment Management for the May semester as part of my MBA program (the national guard is paying for it). It should be interesting!

 

[Jeb-NY]

TSP - Thrift Savings Plan (The 401K-like plan for the federal government and the military)

The individual funds in the plan:

G - Government securities
I - International Index
C - Common Stock Index (S&P 500)
S - Small Capitalization Stock Index
F - Fixed Income Index
L - Lifecycle funds (2040, 2030, 2020, 2010, Income)

Thank you gindie. I quess accept for the TSP the rest were sort of a duh momement for me.

Jeb