More options coming for TSP investors

One of the complaints some Thrift Savings Plan investors have is what they consider a lack of investment options. Some of them want more funds, while others want higher risk/higher reward funds.

Some want to put money into socially-correct funds. Many would like the TSP to have an open window period when they could put some of the retirement nest egg money into outside sources.

Currently there are five funds which cover the U.S. stock market: C and S funds, and the I Fund which will be changed and broadened some time next year, plus the F-fund (bonds) and the very special G-fund guaranteed by the U.S. Treasury.

There are also a range of target-date funds which provide an age-appropriate mix of the five funds that get more conservative as the target date — 2020, 2030, etc. — approaches.

A lot of changes are on the way. Many of them are designed to meet the requests of investors and make it more attractive for them to leave their money in the TSP when they retire, or leave government for other jobs.

Kim Weaver, director of External Affairs for the Federal Thrift Investment Board, was my guest Wednesday on the Your Turn radio show. While she covered many of the pending changes, some questions we received were not answered on the show. Here is a three part-query from James M., at Wright-Patterson AFB, which is of general interest to many TSP investors:

  1. Q: Is there any plan for TSP to open a window for purchasing exchange trade stocks, mutual funds, or individual stocks?
    A: Yes, the Board does plan to include a mutual fund window. However, that will not occur before 2020 and the Board cannot provided a more definite schedule.
  2. Q: Is it possible to see a contract or prospectus for a TSP MetLife joint life annuity with a spouse before purchasing it?
    A: No, the TSP cannot show you a contract or prospectus for a joint life annuity. The TSP provides information in the withdrawal booklet about annuities which serves the same purposes as a prospectus. You also can go to the TSP calculator to estimate your benefit amount.
  3. Q: Is all of the money withdrawn from one’s TSP used to purchase the annuity or is part of it used for a commission payment to an insurance salesperson?
    A: All of the funds sent to MetLife are used to purchase an annuity; there is no commission to a salesperson. MetLife won the bid to serve as the TSP’s vendor and MetLife’s profit is built in to the bid/contract.

Nearly Useless Factoid

By Amelia Brust

Crayola crayons’ distinctive smell — ranked 18th in a list of the 20 most identifiable  smells in a 1982 Yale University study — is largely due to the stearic acid used to make the waxy consistency. Stearic acid is a derivative of beef fat.

Source: Mental Floss