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TSP Fund questions for those who've used them

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  • TSP Fund questions for those who've used them

    WCI has discussed the various TSP (Thrift Savings Plan) funds previously, most recently briefly in his lastest asset allocation blog post (  But I don't think I've seen the details of each fund ever discussed.

    My spouse is about to start active duty, which means we will be incorporating them into our portfolio for the first time.  We have an investment plan and asset allocation we follow already (primarily using VITSX, VFIAX, VTIAX, VSMAX and VBTLX), but are having trouble deciding how we're going to incorporate 1 or more of the TSP funds into that plan.  We like keeping the TSM and 500 index allocation largely in our taxable account given the ease of tax loss harvesting/crossover. The rest are in 403b, 457, Roths and HSAs.

    From what I can gather from the TSP website:

    C Fund= S&P 500 index

    S Fund= all the rest, but would have midcap tilt

    I Fund= international, but a developed markets tilt (tracks MSCI EAFE)

    G fund= government securities

    F fund= other bonds

    L funds= essentially like Lifecycle funds

    They all have the same lovely 0.038% expense ratio.

    Should we try to mix/match the S and I funds to match our asset allocation?  Seems like that math will get difficult.  Or just put in all in the C fund and adjust the rest of our accounts accordingly to maintain our plan?  Or maybe just assign our entire bond allocation going forward to this account and throw it all in the G fund (seems to have worked well for WCI).

    Those of you with a history of using these funds, any thoughts?


  • #2
    #1.  Thank her for her service and stay safe on that deployment wherever it may take her.

    You can KIS and use the Lifestyle fund that will rebalance between C/S/I/G.    I did C/S/I: 80/10/10 during my time there and maintained that for 10 years.  The last 4 years I did a L-2040 just to be lazy.  They all are broad funds so hard to split hairs on rebalance vs Lifecycle.

    I separated for four years ago but still keep our funds in the TSP with that low expense ratio.


    • #3
      OTOH -- My ultraconservative MIL who's USPS retired 2015-  has G/C: 80/20 long term  and she came out looking pretty good despite only 7 years out of the stock meltdown --- so all depends on tolerance and volatility.

      Savings is the key


      • #4
        TSP vs Vanguard 12 mo TR (this is a few weeks old)

        C (S&P 500) vs VFIAX: 17.92 vs 17.85% (+0.07%)
        S (DJ TSCM) vs VEXAX: 21.67% vs 21.61% (+0.06%)
        I (MSCI EAFE)vs VTIAX: 20.65% vs 20.05%* (+0.60%*)
        F (Barclay agg) vs VBTLX: -0.03% vs +0.04% (-0.07%)

        G stands alone...I guess the closest thing is maybe TIPS?

        L2050 (44% C, 15% S, 25% I, 12% G, 3% F) vs VFIFX (54% VTSAX, 36% VTIAX, 7% VBTLX, 3% int'l bond): 16.40% vs 16.99%
        L2040 (40/12/22/20/5) vs VFORX (52/35/9/4): 14.53% vs 16.49%

        (* = not direct comparison since I is just EAFE and VTIAX has emerging)

        So yes, they really are almost the exact same funds within a tenth of a percent for ones that follow the same indices.

        It's all one big portfolio, all your accounts together. Holding C and S (or VFIAX and VEXAX) in a 4:1 ratio will equal the makeup of VTSAX. Holding 5-6:1 I and an EAFE fund and VEMAX (emerging) will equal VTIAX (15% emerging).

        I don't like the Ls that much because they have way too much G/F imo.


        • #5
          The L fund allocations, if you were wondering.  This is from the TSP's official L funds paper.


          • #6
            The G fund is the ideal fixed income investment. You shouldn't own bonds in any of your other accounts, unless your tsp balance is too small to hit your target bond allocation using the G fund only.

            The other funds are very good, but they are mostly comparable to funds available through vanguard, fidelity, etc. The G fund is a unique opportunity only available to tsp participants.

            Research this, and you will (probably) come to the same conclusion.


            • #7
              Thanks. Very helpful.