When you leave government, should you keep your retirement nest egg in the federal Thrift Savings Plan, which has the lowest administrative fees in the business? Or should you give it to somebody who (for a fee) will “manage” it for you?

Next time the stock market takes a steep nosedive (and it will), should you yank everything from the C,S and I stock funds and park your money in the super-safe (also, super-dull) treasury securities G-fund? Or should you take a pill to prevent sea sickness and keep buying stocks in the hope/belief/certainty that what goes down also goes up?

A column last week about leaving the TSP and taking a 28 percent hit generated lots of comments, not from professed “experts,” but from been-there- done-that fed investors. Check the comments section of that column. Meantime, here are two others:

“When I retired almost 13 years ago, I had $27K in the TSP, allocated 80%, 10 and 10 in the C, G, and F funds respectively. Once you retire you are not allowed to put any more money in the TSP. However, you may reallocate your funds within the TSP, which I did shortly after retiring. The new allocation was 30%, 30, 30, 5 and 5 for the C, S, I, F and G funds. Since retiring, I have not added to, transferred, or withdrawn any money. The balance as of today, 5/28/2015 is $85K. I don’t know what the balance would be had I taken the money out and reinvested it in the stock market, but I have a feeling it would not have done as well.” RV

“I read your article about leaving the TSP and had to write to you to share my experience. I was one of the feds who retired and, based on advice I received during an agency sponsored retirement seminar, rolled my entire TSP over to an IRA.

Worst investment mistake I ever made!

Why? My investments cannot beat the TSP mostly due to fees. Secondly, TSP is the ONLY investment that offers the G fund, which is the only place you can park cash and earn nearly 2 percent.

My advice (oh, I wish I had heard it before I rolled over my TSP) is to keep your TSP open. If a retiree really thinks they can do better outside TSP, make the withdrawal a partial withdrawal. Keep $1,000 in the G fund. By keeping that balance in TSP, you can roll your IRA back to TSP if you realize you made a big mistake.

Based on my tracking, had I kept my TSP in L-2020, I would have earned $48,000 more in the 2 years I’ve been invested with a certified financial planner. That is no small amount.

I’m working on an article to share this experience but I thought by e-mailing you, perhaps you can share my story and help another fed to avoid my mistake.

Thanks so much for all of your support to feds.” A Long Time Fed

NEARLY USELESS FACTOID

By Emily Kopp

Pull out your pennies, nickels, dimes or quarters in honor of Flip a Coin Day. The heads-or-tails tradition dates back to Roman times. Legend has it that Julius Caesar would flip a coin to decide tough decisions. He had a preference, of course. The “heads” side bore his likeness.

Source: HolidayInsights.com

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