5,000 new TSP options: Cheer, or choke?

What if the menu at your favorite/only eating place jumped, from 15 items to more than 5,000 new choices? Could you handle it? Would you welcome the option, or find it confusing? Maybe choke on your choices?

Prepare to find out:

Starting later this year the federal Thrift Savings Plan will expand — as in astronomically increase — the number of funds and options active and retired federal and military personnel will have as investment...

READ MORE

What if the menu at your favorite/only eating place jumped, from 15 items to more than 5,000 new choices? Could you handle it? Would you welcome the option, or find it confusing? Maybe choke on your choices?

Prepare to find out:

Starting later this year the federal Thrift Savings Plan will expand — as in astronomically increase — the number of funds and options active and retired federal and military personnel will have as investment choices. By later this year, TSP investors could have as many as 5,000 new investment options.

So what next?

The TSP is Uncle Sam’s in-house 401(k) plan equivalent. It currently is worth $770 billion. With a B! It’s one of the biggest investment vehicles in the world. And one private groups and firms have wanted a piece of since Congress set it up.

With its 5% match for most investors and tight oversight, it is considered the jewel in the crown of investment options. The TSP covers everyone from park rangers to astronauts to SEC lawyers, and includes ambassadors, members of Congress and the Supreme Court. Currently they are limited to five funds — three stock index funds plus a bond and treasury securities — plus 10 self-adjusting Life Cycle (target date) funds. In other words, Bernie Madoff, stay away!

Many of the new investment options will include funds that are environmental, social or so-called governance (ESG) options. That will please investors who, for decades, have demanded more ESG. Investors will be able to take up to 25% of their TSP balance and move it into one (or many) of the approved new funds. They will also pay more in administrative fees than those investors who stick with the five basic funds.

After all is said and done, the basic question is should you put some (or the maximum) of your retirement nest egg into new options that have a greater potential for growth. Or going in the tank! By some estimates the TSP will supply one third to one half the income more federal/military investors have in retirement. Assuming they invest wisely and well.

For feds who have been anxious to time the market, predicting high and low points then investing accordingly, the new options will be a blessing. If they excel at buying low and selling high, which is tougher in practice than in theory.

So what will the new features look like? What will they cost investors in added fees? Let’s start at the top: Today’s Your Turn radio show’s guest is Kim Weaver. She’s executive director of external affairs for the Federal Retirement Thrift Investment Board, which runs the TSP. She’ll explain how the new investment options will work, what they’ll cost and how you can take advantage of them. That’s 10 a.m. EDT here on federalnewsnetwork.com or at 1500 AM in the Washington-Baltimore area. If you miss the show, want to catch it later or refer it to a friend it will be archived here on our home page.

Nearly Useless Factoid

By David Thornton

In 1986, geological investigations in Romania uncovered Movile Cave, which had previously been sealed for 2.5 million years. More than 50 animal species evolved to thrive in its uniquely toxic atmosphere, 37 of which have never been encountered anywhere else.

Source: GESS Lab

Related Stories

    (Amelia Brust/Federal News Network)

    5,000 new TSP options: Is there an ESG fund for you?

    Read more
    Amelia Brust/Federal News Network

    TSP participants could save longer under Secure Act 2.0

    Read more
    Amelia Brust/Federal News Network

    What’s your TSP investment style: Roller coaster or merry-go-round?

    Read more

Your Turn with Mike Causey

WEDNESDAYS at 10 A.M.

Learn about everything from pay, benefits and retirement, to buyouts, COLAs and pay freezes. Dial 667-930-9385
to listen live from any phone. Follow Mike on Twitter and send him an email with your questions and comments. Subscribe on Apple Podcasts or Podcast One.

THRIFT SAVINGS PLAN TICKER

May 26, 2022 Close Change YTD*
L Income 22.7139 0.0976 -3.32%
L 2025 11.4906 0.0859 -6.04%
L 2030 39.6951 0.4221 -8.58%
L 2035 11.8294 0.1377 -9.48%
L 2040 44.4375 0.5623 -10.33%
L 2045 12.0885 0.1636 -11.10%
L 2050 26.3208 0.3788 -11.80%
L 2055 12.7499 0.2205 -13.56%
L 2060 12.7491 0.2205 -13.56%
L 2065 12.7482 0.2206 -13.57%
G Fund 16.8797 0.0013 0.65%
F Fund 19.1524 0.0124 -9.33%
C Fund 61.6252 1.2035 -12.91%
S Fund 65.3406 1.5929 -18.83%
I Fund 34.8302 0.399 -12.73%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.