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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Category: TSP History

Sep


05

A Funny Thing Happened on the Way to Sequestration

A funny thing has taken place since February this year. As sequestration – and associated furloughs – became reality in the spring, the total number of TSP participants dropped by 5,000 participants through May.  And the number of participants remained stagnant again through June. At the end of December last year, there were just over 4.614 million participants.  That rose to 4,619,546 TSP participants at the end of February.  The number of participants then dropped to 4,614,553 in May, and … more

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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


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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Nov


06

Previous TSP Audits Discussed Security Related to Serco Services

In addition to its most recent audit on security, the advisory firm KPMG has completed at least seven audits of TSP-related topics in the past four years.  Two audits – both of which at least tangentially discussed Serco – stand out, given the issues related to the Serco information leak reported earlier this year and in light of the July 2012 audit.  And curiously, these two audits that touched upon Serco also appear to be incomplete—they are missing the Agency’s … more

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Oct


19

25th Anniversary of the Crash

October is a month of crashes. One of the biggest market crashes took place 25 years ago today.  After gradually increasing some 20% in 1987 through the end of September, the S&P 500 began to fall in early October, and then plunged on October 19th.  Black Monday. From a high of 336 in August, it dropped to 224 on this day.  That’s a fall of one-third from peak to bottom.  In one day, it fell 22%, from 282 on Friday, … more

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Sep


13

Deadbeat Dad? Malefactor Momma? Your TSP is in Jeopardy

For those not paying child support, beware!  Your TSP account is in jeopardy.  While TSP investments are safe from garnishment or most other legal process, unpaid child support is an exception. According to the Office of Child Support Enforcement (OCSE), an office of the Department of Health and Human Services, 86,000 federal employees owe child support. Nationwide according to the OCSE, there were 11.3 million child support cases that were in arrears, of which over 7 million had collections in FY … more

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Sep


04

The Power of $300 Billion in Assets

The TSP as of the end of May held over $305 billion in assets, according to official Federal Retirement Thrift Investment Board (FRTIB) figures.  About 44% of that amount, or approximately $132 billion, is invested in the stock funds.  This includes investments held directly by TSP participants in each of the stock funds (the C Fund, the S Fund, and the I Fund), and those held indirectly in the L Funds (the Income Fund, the 2020 Fund, etc).  The massive … more

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Aug


20

Government Pensions and the Thrift Savings Plan

While this site is devoted to the Thrift Savings Plan, the issue of government pensions and other compensation have received a lot of discussion of late. Pensions and TSP benefits go hand-in-hand, but debates have focused primarily on possible reforms of pension programs.  It is interesting, therefore, to briefly explore the history of government pensions to gain some perspective on where the programs stand now. Below is a short history of the federal government pensions, drawing first from a 1995 … more

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Aug


19

Military TSP Participation Inching Higher

The number of uniformed service personnel participating in the Thrift Savings Plan (TSP) this year recently reached a record-setting 727,786 as of the end of May.  This compares with approximately 712,000 participants at the beginning of the year. The number of activity-duty participants grew to over 587,000 personnel, representing a participation rate of 40.1%.  This is a new record, according to recent Federal Retirement Thrift Investment Board (FRTIB) figures. The number of contributing reservists reached 140,554 personnel, or 16.4% of … more

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Jul


15

TSP Annuity Rate Falls to a Record Low

As expected, annuity rates have fallen again, to a new rock-bottom 1.875%.  This continues a three-year continuous decline from almost 5% in early 2008 to under 2% this month.  And given the historically low rates on U.S. treasury bonds in general (annuity rates tend to track U.S. treasury bonds), there are no signs that rates will go back up again anytime soon. The latest low continues what has been a 20+ year trend in declines in the TSP annuity rates.  … more

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Apr


14

More on TSP Fund Returns

I’d like to take the opportunity to further highlight the underlying figures cited in my posting on TSP returns from 1988 to early 2012, the 25-year anniversary of the TSP. The total personal contributions by the hypothetical TSP investor in this posting was $42,393, which with the automatic government contribution brings her total investments over 25 years to $84,786.  Also, over half of her contributions – $23,601 – came in the last 10 years of this 25-year time span, because … more

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Apr


11

After the Roth TSP, a ‘Mutual Fund Window’?

While the Roth TSP has received the lion’s share of attention since the June 2009 enactment of the “Thrift Savings Plan Enhancement Act,” the legislation also empowered the Federal Retirement Thrift Investment Board (FRTIB) to allow a “mutual fund window” if “the Board determines that such addition would be in the best interests of participants.” A mutual fund window would allow TSP participants to invest some of their contributions in mutual funds outside the ten already offered in the TSP.  … more

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Apr


09

Who Contributes More to the TSP: Army, Air Force, Navy, or Marines?

The Thrift Savings Plan was opened to members of the uniformed services ten years ago.  Military personnel were allowed to participate in the TSP for the first time beginning in January 2002 with a 2001 amendment to the National Defense Authorization Act for Fiscal Year 2000. Ten years later, which service has the highest participation rate? As of the end of December 2011, the numbers broke out this way:  Among active duty personnel, the Navy had the highest participation rate, … more

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Apr


05

TSP Fund Returns, 1988-2012

The following charts show the approximate returns for the G, F, and C Funds since early 1988.  While the G Fund began taking contributions in April 1987, when the TSP first opened, the F and C Funds did not open until January the following year. The returns are based on an investor starting as a GS-07 in 1988, contributing 5% of her salary and receiving a 5% government matching contribution.  The investor enjoys periodic promotions, so that her pay rises … more

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Apr


02

Happy 25th Birthday, TSP!

On April 1, 1987, the Thrift Savings Plan became operational and approximately 600,000 individual accounts were opened for employees who began Federal Government service after January 1, 1984.  The TSP was created as part of “Federal Employee Retirement System Act” (FERS Act), signed by President Reagan on June 6, 1986 to reform the federal employee retirement benefit system.  While federal employees faced a reduced pension under this new system, they became eligible for Social Security and also received government matching … more

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