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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Monthly Archives: January 2013

Jan


31

Happy 25th Birthday C Fund and F Fund!

The C Fund and F Fund turned 25 this month.  The funds first opened and began accepting investments in January 1988, and they have been growing ever since. While the Thrift Savings Plan turned 25 last April, it only had one investment option in the first year: the G Fund.  The C Fund and F Fund turned out to be slightly more complicated to implement than originally expected, thus accounting for the slight age difference. As of the end of … more

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Jan


30

TSP Senior Management Back To Normal

As a further update to a previous post, TSP management has confirmed that Mr. Long continues to serve as Executive Director.  Although the online December FRTIB meeting agenda mentioned an Acting Executive Director, TSP managers relayed that Mr. Long was in attendance at the December Board meeting as Executive Director, and this should be reflected in the December meeting minutes to be posted any day now.  TSP managers also noted that the January FRTIB meeting agenda – which again listed an “Acting Executive Director” at the January 28th board meeting – was … more

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Jan


29

Back To Basics

While it is easy to get excited about the positive performance of the TSP stock funds and lifecycle funds of late, other issues such as sequestration and the end of the current continuing budget resolution are just weeks away. Sequestration is due to take effect at the beginning of March.  On Sunday, the chairman of the House of Representatives Budget Committee said he thought “the sequester is going to happen.”  Readers of this forum know first-hand how agencies are scrambling … more

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Jan


24

Suspension? What Suspension?

As most TSP participants have heard, the Treasury Secretary announced in late December that one of the steps the Treasury Department “may” take as the country hit the debt ceiling was the suspension of interest payments to the TSP’s government securities G Fund: “Treasury may…suspend the daily reinvestment of the Treasury securities held by the Government Securities Investment Fund (G Fund),” he stated in his notification to Congress.  Payments are to be made whole after the debt ceiling has been … more

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Jan


22

Will You Convert Your Regular TSP Holdings to the Roth TSP?

This is purely a hypothetical question right now, but TSP administrators announced earlier this month that they will study the steps necessary to implement an option that would allow participants to convert their current regular TSP holdings into a Roth TSP account, after paying the required taxes to do so.  The announcement read: “The President approved the American Taxpayer Relief Act of 2012, on January 2, 2013. This law allows the TSP and other qualified plans to give participants the … more

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Jan


21

Some Records Updated, But Questions Remain

As an update to the previous post, some of the documents originally missing from the October 2012 Federal Retirement Thrift Investment Board (FRTIB) meeting minutes have been uploaded.  Well, one at least. For those who are interested in issues related to security, an audit report compiled by CliftonLarsonAllen discussed, among other things, “internal controls over financial reporting and general computer and application controls” – though auditors did not test the operating effectiveness of these controls or the changes made to … more

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Jan


10

Transparency and the TSP

TSP administrators began their New Year’s outreach efforts on Monday by addressing the federal debt limit and the G Fund and by talking with Federal News Radio.  Some of the topics included discussions of the Roth TSP, the G Fund, and how the end of the payroll tax reduction might cause some participants to reduce their contributions.  The Executive Director was involved in each of these efforts, apparently taking back over from the acting executive director after the holidays. In … more

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Jan


07

The Increasing Costs of Government Pensions

New federal employees joining government service from this pay period will receive a reduction in pay relative to their longer-serving peers.  Those who begin their government service this year will now pay 3.1% to their pensions.  This compares to current FERS employees, who pay 0.8% to their pensions. For someone making $50,000 a year, a 3.1% contribution totals $1,550 or about $130 a month.  This is an increase of $1,150, over the previous 0.8% contribution rate. New employees paying this … more

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Jan


04

Debt, Rating Agencies, and the TSP

The markets powered higher on the first trading day of the year after the limited agreement on taxes and the two-month postponement of sequestration. And the headlines for the TSP suggested the stock funds especially had a banner year in 2012.  Coming on a day when the TSP stock funds shot up 2.5%, it is tempting to think that as savers and investors, we’re out of the woods.  It just might be a good year afterall…. But recent past experience … more

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Jan


03

With Pay Reduced by Two Percent, Now What?

Given that the deal reached between Congress and the White House did not include an extension of the 2% reduction of the Social Security payroll tax – and with government wages frozen at least for now – we will see a 2% reduction in pay beginning this month. The Social Security tax rate was reduced by 2% to 4.2% for employees under the Middle Class Tax Relief and Job Creation Act of 2012 (employer contributions of an additional 6.2% rate … more

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