Don’t Fix It If It Ain’t Broke But…

Mike Causey

Don’t Fix It If It Ain’t Broke But…

Remember the old KISS rule - as in keep-it-simple-stupid! Many readers tell Senior Correspondent Mike Causey the Thrift Savings Plan is that it\'s simple, and they...

Federal News Network Staff

August 22, 2008 6:35 am

3 min read

The federal Thrift Savings Plan is the biggest (and many believe best) 401(k) type plan in the nation. Depending on what the stock market does today, the TSP is the $225 billion optional retirement kitty for most active duty feds, a growing number of retirees and both active and retired members of the military.

It holds the money of Senators, Representatives, people who process Social Security claims, who sort and deliver the mail, who make and break codes and who go into outer space all the time. Also warfighters and medics, air traffic controllers, FBI agents and retired people who set up and ran multi-billion dollar federal programs.

TSP investors have a choice of five index funds (covering the U.S. and international stock markets), a bond index fund and the G-fund which is exclusive to the TSP. The G-fund is made up of guaranteed U.S. Treasury securities that are not available to folks outside the TSP.

When it was set up experts believed the TSP would provide about one-third of the post-retirement income of its active (and smart or lucky) investors. Now some TSP watchers say it could be half their retirement spending money.

Many financial experts believe the TSP is the best investment program of its kind. That was the subject of yesterday’s column.

We asked readers if you are happy with the TSP, or if you would like some more bells and whistles. Most who responded said leave-it-alone. But not everybody. Here are some cover-the-waterfront comments:

“I think the TSP could be even better. They are very strict on the withdrawal of your money from the fund. You have to decide if you want part of it in an annuity at the time you start withdrawals. They won’t let you get an annuity later on. You can’t change the amount of your monthly withdrawals {more than} once a year. They are not very flexible with the withdrawal options, is the only complaint I have. Other than that, it’s a great fund.” James of the USPS

“The TSP mix of investments is just fine as is. The folks who want to add other investment choices (and thereby drive up management fees) are probably the same 3,000 bozos who are whining because they can no longer adjust their accounts on an hourly basis.” Gary G. from CBP

“My compliments on your choices of guest writers…..particularly Stan! Please leave the TSP fund alone. Simple is easy and inexpensive (as complimented by the pros) …but only if it stays simple. I think the KISS method of doing things was invented for me. Thanks,” Dave @ IRS

“Mike – I’m very happy with the TSP, especially the low fees. Any investor who doesn’t like the TSP can take their funds and invest them elsewhere. Let’s keep it simpler and maintain the low fees. Let others chase whatever exotic funds there are out there!” Catherine

Finally, Happy Birthday FAA!

Reader Barbara H. wanted us to know that her agency, the Federal Aviation Administration, turned 50 this week. So happy birthday to some of the sharpest people in government. Those of us who fly, or who live in a flight path, appreciate your work.

Nearly Useless Factoid

Cruise control was invented by a blind man. According to MentalFloss, Ralph Teetor was inspired to do so when his lawyer’s “jerky driving” made him carsick.

To reach me: mcausey@federalnewsradio.com