TSP tips and trivia
I read a number of personal-finance discussion boards, and one of the largest is Bogleheads.org. Their best feature is the user’s wiki, which has grown way beyond a basic FAQ page to become one of the Internet’s top unbiased online guides to investing and retirement.
Just over a year ago a poster started a thread on military investing topics which has been expanded and formatted as a new wiki page on military finances. And, yes, they even linked to “The Military Guide“.
Take a look at their wiki page on the Thrift Savings Plan. I knew that the TSP was one of the world’s biggest collections of index funds, but then I came across the Federal Retirement Thrift Investment Board website. That eventually led back to the biographies of the FRTIB directors at the TSP website, where the executive director’s bio says: “The TSP services 4.5 million current and former Federal employees and Uniformed Service members with over $289 billion in assets, making it the largest defined contribution plan in the world.” So now you know that servicemembers invest in the world’s largest 401(k)– and with the world’s lowest expenses, too.
One of the most comprehensive websites on using the TSP is Ryan Guina’s “Military Wallet” Thrift Savings Plan tab. He explains both the benefits of investing in the TSP and the drawbacks. One of the more popular posts explains how to handle TSP tax-exempt contributions and withdrawals , and he’s also following the Roth 401(k) plans for the TSP (still scheduled to start during 2Q12).
Most TSP investors (especially busy servicemembers) are happy to contribute their allotments to the funds and to occasionally tweak their asset allocation. That’s probably the best way to handle our TSP accounts. However many others would like to see more details on the TSP’s funds and compare them to products from major fund companies like Vanguard or USAA. The TSP funds still have the lowest expenses, but the TSP website doesn’t answer questions like: “How does the ‘C’ fund’s performance compare to the competition?” “How will the ‘I’ fund be affected by a foreign country’s debt default?”
One of the most frequent questions is: “What are the ticker symbols for the TSP funds so that I can track their performance on my investment software?”
The TSP managers don’t answer those questions because they don’t have a marketing staff. (They have “only” 80 people to manage the world’s largest funds and they’re considered to be one of the smaller federal agencies.) They don’t even want to pay for the expense of maintaining a TSP ticker system. To fill the information void, a host of unofficial TSP websites offer the data that you won’t get from the TSP itself.
One of these is TSP Center. It includes archives of TSP data and share prices as well as a wealth of analysis tools for choosing an asset allocation. It also has a blog, a discussion board, and a “FantasyTSP” analyzer. You can download your own data or use their tools. You can tinker with different asset allocations and see how your TSP assets interact with your IRA and taxable accounts. You can follow their updates on Facebook. If you have a question that the TSP website doesn’t answer, one of TSPCenter’s 4000 members can help you figure it out.
TSP Talk is another site full of tools and archives. Its “TSP AutoTracker” gives you an easy way to monitor your TSP fund’s performance with daily quotes and analysis. Its “Tools and Utilities” section offers member blogs, data charts, and e-mail alerts for TSP news releases. The site includes a forum with thousands of members who’ve probably answered every TSP question ever asked. Yep, they’re on Facebook and Twitter too.
These sites and tools cater to active TSP investors. Use them to educate yourself and to choose a TSP asset allocation that works well with the rest of your investments. Don’t turn into a trader– TSP investors don’t have to be involved in their fund’s daily twists and turns, let alone switching from one fund to another every month. For the vast majority of servicemembers the most important aspects of the TSP are making regular contributions, choosing an asset allocation you’re comfortable with, and rebalancing every year or two. (I only update our TSP fund data a few times a year and have never switched from one fund to another.) However the blogs and discussion boards are fantastic education tools and reference sources. If you’ve been all over the TSP website looking for an answer, you might find it on one of the other websites.
I’ll be checking these sites over the next few months to see how the upcoming Roth TSP option is doing. If there’s a question about the rules or the implementation, these guys will be all over the answers.
Saving base pay and promotion raises
Retiring on multiple streams of income
Asset allocation considerations for a military pension (three parts!)
TSP withdrawal options
TSP annuity options
Exploring the Bogleheads’ Wiki – Asset Allocation (by Mel Lindauer of the Bogleheads)
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