Any TSP users?

[DMFA]

From my inexperienced eye the TSP seems like a pretty solid vehicle for me.  ER 2.9 bp, funds for bonds, large-cap, small-to-med-cap, and international which match the indices quite well, and target date funds...if you're into that sort of thing. That, and it's the only fund I can put $18k a year into right now other than my wife's 403b.

My question is what proportions people like to use and how that would equate to a standard portfolio's makeup, for example, the Bogleheads' favorite Three Fund Portfolio (1/3 total stock, 1/3 int'l stock, 1/3 bond).

For outsiders, I'll break it down:

• G fund: basically like TIPS, usually a set 1.5-2.5% return


• F fund: tracks the Barclays Aggregate


• C fund: S&P 500, large/med cap


• S fund: Dow Jones U.S. Completion TSM Index (but not quite total stock; doesn't include the ones in C fund), med/small cap


• I fund: EAFE

So in trying to emulate the Three-Fund Portfolio (the examples are VTSAX, VTIAX, and VBTLX), it seems like I'd have to split the total stock between C and S, which would result in 17% C, 17% S, 33% I, 33% F.

Not saying that's exactly what I or anyone needs to do, but I wanted to pick some brains, esp WCI since he used the TSP (and still does, according to his Portfolios Better Than Yours) post.

[The White Coat Investor]

I'm a TSP user. I have about 60% in G and 40% in S right now. But that's because I have to balance it with three other 401(k)s.

There isn't a bad fund there. Your allocation looks fine. But you should really look at all of your and your wife's accounts earmarked for retirement as one big account.

[RadDoc6876]

I am a TSP user with both military accounts from prior years with the military and now a Civilian account as a VA physician.  I agree you can't go wrong with TSP investing due to low costs--no bad options, up to you whether to choose your own asset allocation or just use a lifecycle fund.  There is a Roth option btw.  FYI the TSP can be rolled into another IRA if you ever want to, and vice versa--if you have any 1099 income and set aside some in a SEP IRA, you can transfer this into the TSP (I have done this w/ no issues, just fill out some paperwork).  In fact you should do this prior to Dec 31 to enable a back-door Roth and avoid the pro-rata rule.  Have you given any thought to how you will use the TSP in retirement?  I know they have annuity options but confess I haven't researched it much.

[Traveldoc]

TSP is great as far as fees is concerned. We are in a similar position as WCI. For us TSP is now predominantly G fund as part of the total package of still active 403b, DBP, solo 401k (soon 2, thanks WCI) incl. mega Roth part/account, TIAA and 2 regular Roths.  I'll be glad when we can finally simplify   .

There is a small Roth part in the TSP. Sadly, you cannot choose fund distributions separately from the rest of your TSP, what you choose for regular will be similarly picked for Roth (hence TSP Roth is mostly G fund too for us   ). Similarly when you retire; if you do choose a monthly payout they will do so proportionally out of the regular and Roth part. So think hard before you decide to use the Roth TSP. In hindsight......  You will have to decide what works for you when you retire. Keep TSP and set-up a distribution plan, or roll it over and have more flexibility.

[The White Coat Investor]

Yes the distribution options for the TSP are probably limited. I will probably roll it out to an IRA just before I start distributions.

[ActiveDuty]

What's the WCI forum's opinion on the new blended (match reduced pension) retirement system?

[conniebird]

DMFA, timely post. My mom has a TSP and I might help her manage it. She has it all in the G fund- she's 66. She is not planning on using it and will be split 50/50 between me and my brother (she has a pension, SS, and spouse who is still working). So it might have another 20 yrs plus of growth in it. Trying to figure out how to allocate things for her. THis post was a nice summary of their funds, thanks.

[DMFA]

conniebird wrote:

DMFA, timely post. My mom has a TSP and I might help her manage it. She has it all in the G fund- she’s 66. She is not planning on using it and will be split 50/50 between me and my brother (she has a pension, SS, and spouse who is still working). So it might have another 20 yrs plus of growth in it. Trying to figure out how to allocate things for her. THis post was a nice summary of their funds, thanks.

Click to expand...

Yeah, the "G" definitely doesn't stand for "growth," that's for sure :-D well, at least not big growth.

G (government securities) is designed to beat inflation and just sort of chugs along at 1-3% in recent years - but, then again, in 2015, it was the highest earning fund (+2%; F was +1%, C was +1.5% while S and I both lost), so some folks like to occupy their designated "safe space" with some G instead of F to shield against those periods when bonds are down.

For returns, mostly C/S/I (tilted however you please between large, small/med, and int'l) forms the backbone, with a little bit of F +/- G if you want some bonds in there is how people tend to go.

I haven't yet decided if I want to keep things in there or roll it into another account when I separate in 8 years.  All my contributions to it are Roth for the time being.

If anyone else wants their official explanation: https://www.tsp.gov/InvestmentFunds/FundsOverview/comparisonMatrix.html

[Tom Kazansky]

Became interested in this recently - seems there is no way to rollover/transfer ONLY the Roth portion of an old TSP to Roth IRA?

Want to keep the TSP, but have about 20% in Roth.

[Hank]

Yep, TSP won’t accept inbound Roth rollovers.

[Tom Kazansky]

Thanks, Hank.

I'm actually interested in the opposite - moving the Roth portion of my old TSP out to my Roth IRA.

Sounds like you can't slice and dice?

[Hank]

If you're working for the federal government and under age 59 1/2, it looks like you can't pull the Roth portion of your TSP out and place it into a Roth IRA.  That still isn't a terrible thing, since you still can contribute to a Roth IRA in addition to your TSP each year.  Also, you have far stronger asset protection in the TSP than you have for an IRA in most states.  The relevant guidance states:

"It used to be that when you took a withdrawal, the money came from your traditional and Roth balances on a pro rata basis. For example, if 80% of your account was in your traditional balance and 20% was in Roth, any withdrawal you took was 80% traditional and 20% Roth. Under the current rules, you can still use this method, but you also have the option to take your withdrawal only from your Roth balance or only from your traditional balance. These options are available for all types of withdrawals."

[Tom Kazansky]

Thanks again, Hank.

So, with recent changes, it does seem possible now to extract only the Roth portion of TSP and rollover to Roth IRA  (I'm no longer working for Federal Govt).

Has anyone done this yet?

"If you have both traditional and Roth money in your
account, you can specify that your withdrawal should
come only from your traditional money or only from
your Roth money. This is optional. If you don’t specify,
then your withdrawal will be made from both types “pro
rata,” meaning it will have the same percentages of Roth
and traditional as are in your account."

"Single withdrawal. If you have only one type of balance
(traditional or Roth) in your single withdrawal, you can
direct all or part of it to only one IRA account or eligible
employer plan. If you have both traditional and Roth
balances in your withdrawal, you can direct all or part
of the traditional portion to one IRA or plan, and all or
part of the Roth portion of the payment to another IRA
or plan (assuming you meet the eligibility requirements
of the receiving plan(s))."

[kiter321]

I have a small portion of my TSP in a Roth money and might consider a transfer to a Roth IRA.  I’ll have to look into it.  Would have to say that the TSP customer service is pretty good, I have called many time and the wait time has never been that long.  You can probably get a straight answer with just a phone call.  I have transfer money into the TSP (one page form, Form 60) and transferring out might be just as easy.