Welcome to TSP Strategies

Welcome to TSPstrategies.com! This Web site is dedicated to exploring the benefits of saving and investing in the Thrift Savings Plan.

The companion book, TSP Investing Strategies: Building Wealth While Working for Uncle Sam, lays out a simple set of strategies for long-term, buy-and-hold investors to consider while investing in the TSP. This Web site and accompanying blog will build on those concepts, while focusing on new investing options and developments related to the TSP.

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Jul


23

C Fund Millionaires

The C Fund has recently produced a lot of millionaire TSP participants. Those TSP participants who started investing in the C Fund at its inception in 1988 have become or are close to becoming millionaires this year. Those who contributed enough from pay that, together with the government match, was the equivalent of the maximum deferral limit each year are now millionaires: In 1988, the deferral limit was just over $7,300, and by 2000 that limit had grown to  $10,500. … more

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Jul


15

Say-on-Pay and the TSP

What do you get paid?  Are you paid fairly for the work you do?  How much do you think you should get paid? How about the leadership in your agency or command?  Are they paid fairly? I’ve heard the debate many times over the years.  We don’t get paid enough.  We’re over-paid.  We could make more in the private sector.  We already do.   Etc. etc. Now, what does the leadership of the TSP deserve to be paid, managing as they … more

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Jun


30

Owe Taxes? You Might Soon Pay Out of Your TSP Account

TSP administrators two years ago established a process to deduct funds from TSP accounts of participants who were declared by a court to be late in paying child support. Now administrators are proposing to do the same for TSP participants who owe back taxes. According to statistics in mid-2013, 3.3% of federal employees owed back taxes for a total of $3.3 billion. While that’s an eye-popping number, the IRS noted that this is less than half the general population, with … more

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Jun


29

Making Strides in Security

There’s been a lot of work going on behind the scenes.   The TSP has been quietly beefing up security. As long-time readers of this forum know, in addition the security breach reported in 2012, the TSP has had a number of open issues related to past security audits. To work these and other issues related to security, the TSP established and filled the position of the Chief Information Security Officer this spring in addition to the Chief Technology Officer.  It … more

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Jun


24

The Unintended Consequence of Higher FERS-FRAE Payments

Did you experience a 3.6% pay cut this year? Those who just began their civilian federal government service this year did, probably without even knowing it. You’ll recall that lawmakers mandated an increase in contribution rates from new employees’ salaries to pay into the FERS retirement system. The new revised retirement system – “FERS-FRAE” or “FERS Further Revised Annuity Employee” – now requires a payment of 4.4% of new employees’ salaries into the system.  The 3.6% figure represents the difference … more

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Jun


22

New Asset Classes Being Explored

I’ve been prepping a book for publication these past two months – it should be out by the end of July – so I haven’t been paying attention to developments related to the TSP recently. A few things caught my eye as I was reviewing background events of the past few months, however. In a very interesting development, the FRTIB earlier this year reviewed an analysis of hypothetical returns on the L Funds that included different types of asset classes. … more

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Apr


16

‘You’ve Got (TSP) Mail’…

Soon TSP administrators will be communicating directly with participants via email, phone, and possibly text messages as well. Administrators recently proposed plans to add participants’ email addresses and phone numbers to their master records system called FRTIB-1.  TSP is now taking comments on this proposal, and assuming there are no negative comments that convince administrators otherwise, the records system will be updated to accept email and phone contact information as of May 15. The announcement also proposes changing the FRTIB-1 … more

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Apr


11

TSP Site Unaffected by ‘Heartbleed’

According to a brief – if not terse – statement on the TSP website, the site itself was unaffected by ‘heartbleed’: TSP Safe from “Heartbleed” Bug — (April 10, 2014) We have reviewed our systems. TSP.gov is not affected by the Heartbleed vulnerability. While tsp.gov is not included, here is a list of major sites that were and were not affected by ‘heartbleed.’

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Mar


26

The TSP Tweaks the L Funds

The L Funds are about to be tweaked. According to an announcement posted on TSP.gov: Updated Lifecycle fund allocations — (March 26, 2014) As a result of changes in long-term capital market assumptions and a review of the Lifecycle fund asset allocations, the TSP has revised the target asset allocations of the Lifecycle funds. The announcement then directs users to the L Fund page to see the “current asset allocations” for each of the funds. When I checked the fund … more

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Mar


03

TSP Diversification the Warren Buffett Way, and Alternatives

Warren Buffett, of course, is known for his investments in and purchases of individual companies.  His Berkshire Hathaway holding company owns over 80 businesses outright and has substantial investments in the stocks of over 100 others.  As the company’s largest shareholder, he is also ranked fourth on Forbes’ list of billionaires.  He didn’t build his wealth by investing in index funds, but amazingly enough, he suggests that you and I should consider doing so. His Berkshire Hathaway annual letter to … more

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Feb


24

TSP Disallows Links to Website?

I came across a curious policy on TSP.gov, one that I had not seen on an openly available, U.S. government website before. It reads in part: Unless you are a .mil or .gov site, you must have a written agreement in effect with the Federal Retirement Thrift Investment Board (FRTIB) in order to link to the TSP website from another website…Once a written agreement is in effect, hypertext links to the TSP website are permitted only if: – The link … more

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Feb


11

‘Accrue’ Can Be A Funny Word…

We reached the debt ceiling again last Friday, February 7. Treasury had notified Congress two weeks earlier that it “would be forced to use extraordinary measures to continue to finance the government on a temporary basis.”   One of these measures is to suspend interest payments to the TSP’s G Fund. Treasury did this as of February 10, according to the Treasury Secretary’s letter to Congress and to a TSP announcement posted today*: “G Fund & the debt limit — (February … more

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Feb


06

Double-Digit Budget Increases and the Future of the TSP

Every government program should be reviewed and evaluated from time to time to revalidate a central question: does the government need to be providing this particular service in this particular manner?  Just because the government can provide a specific service, is it best placed to do so? Now might be an opportune time to examine whether the government should be managing the TSP, as running the TSP is getting more expensive each year – and with recent unforeseeable demographic changes … more

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Jan


30

MyRA, Roths and the TSP

The president today signed a Presidential Memorandum directing the Secretary of the Treasury to develop “a new retirement savings security that can be made available through employers to their employees” and that offers “a low minimum opening amount…while earning interest at a rate based on yields on outstanding Treasury securities.” While not stated explicitly in the memorandum, the new “savings security” will have the same return as and function similarly to the G Fund.  The program has been termed “myRA,” … more

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Jan


29

Will BlackRock Continue to Manage the S Fund?

TSP administrators floated a request for proposals to manage the Small Cap Stock Index Investment Fund — the S Fund — earlier this month. This is the third major RFP to manage individual TSP funds in the past 18 months. BlackRock was re-awarded the contract to run the I Fund early last fall, three months after the RFP was first released in June last year.  The contract award was made in half the time originally anticipated, with the final award expected … more

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