I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

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theclumsymagician
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I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by theclumsymagician »

I'm a federal employee and in my TSP I have my contributions to 70% in the C fund and 30% in the S fund. I am trying to find the equivalent mutual fund with Vanguard that will mirror the C and/or S fund. I've read that VTSAX mutual fund is a combination of the C an S fund. Is this correct?

I do not have a Vanguard account but my goal is to open a Vanguard Roth IRA soon, and I am wanting to find mutual funds that will mirror the C and S fund. Would like it to be the same as my current TSP allocations, so roughly 70% C and 30% S.

Thanks in advance.
Mordoch
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Mordoch »

theclumsymagician wrote: Sat Oct 17, 2020 8:11 pm I'm a federal employee and in my TSP I have my contributions to 70% in the C fund and 30% in the S fund. I am trying to find the equivalent mutual fund with Vanguard that will mirror the C and/or S fund. I've read that VTSAX mutual fund is a combination of the C an S fund. Is this correct?

I do not have a Vanguard account but my goal is to open a Vanguard Roth IRA soon, and I am wanting to find mutual funds that will mirror the C and S fund. Would like it to be the same as my current TSP allocations, so roughly 70% C and 30% S.

Thanks in advance.
VTSAX is essentially a combination of the two funds. The C fund is the equivalent of S&P 500 index (VFINX) while the S fund is at least basically the equivalent of Vanguard's Extended Market index (VEXMX).
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Jerry55
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Jerry55 »

I'm Retired CSRS (2012), just turned 65 and am situated similarly, but 80 C / 10 S / 10 International.

I've been disappointed with the I fund for over 2 years now, and will, in the near future 3-5 years make a similar move.
In the meantime, I'll be watching this post for further observations.

Good Luck !
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
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Watty
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Watty »

Jerry55 wrote: Sun Oct 18, 2020 12:27 am I'm Retired CSRS (2012), just turned 65 and am situated similarly, but 80 C / 10 S / 10 International.
Be sure to understand the differences in the TSP inheritance laws. Here is what I have posted on that before.
Be sure that you understand that the TSP inheritance laws are different than IRA inheritance laws and they are sometimes worse. There is a wiki on this;

https://www.bogleheads.org/wiki/TSP_estate_planning

There was a post awhile back where where someone had run into this situation;

1) Dad had a large TSP, he died and left it to his wife.
2) Wife left the money in the TSP as a beneficiary participant, that worked OK for her.
3) A few years later the wife died and left the TSP to their kid. 

The problem was because of the TSP inheritance rules that the kid could not roll the money out to an inherited IRA and they could also not leave the money in the beneficiary participant account so the kid had to withdraw the money and pay taxes on it. If either the Mom or Dad had rolled the money into an IRA then the kid could have avoided, or at least delayed, a six figure tax bill since they could have the money in an inherited IRA.

You might want to consider rolling the money out to an IRA.

When I have posted about this before there have occasionally been comments to the effect of "I will leave a note for my wife to roll the money out to an IRA if I die first." I would not want to count on an 80 year old recently widowed person actually doing that.
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theclumsymagician
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by theclumsymagician »

Jerry55 wrote: Sun Oct 18, 2020 12:27 am I'm Retired CSRS (2012), just turned 65 and am situated similarly, but 80 C / 10 S / 10 International.

I've been disappointed with the I fund for over 2 years now, and will, in the near future 3-5 years make a similar move.
In the meantime, I'll be watching this post for further observations.

Good Luck !
Congrats on your retirement and hope you've enjoyed things since then. I have about 25 more years until I get to retire.

I recently switched from L2050 to C and S and wish I would have made the change sooner. You mentioned in the near future you would be making a similar move, but why wait until then? Just curious about your strategy.

Thanks.
Outer Marker
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Outer Marker »

theclumsymagician wrote: Sat Oct 17, 2020 8:11 pm I am wanting to find mutual funds that will mirror the C and S fund. Would like it to be the same as my current TSP allocations, so roughly 70% C and 30%
If you want exactly the same ratio, it would be 70% Vanguard S&P 500 index and 30% Vanguard extended market index, VEXMX. That said, for simplicity, I would just hold the Vanguard Total Stock market index, VTSAX which holds the entire market at market weight, meaning slightly more large cap - on the order of 80/20.
Fishing50
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Fishing50 »

VTSAX would be a great option in Roth accounts.

To maximize the advantages of Roth IRA accounts your investing priority should be:
1. TSP to the match
2. Roth IRA contribution to the max
3. TSP to the max
4. taxable investing

Due to contribution limitations Roth IRA space is valuable. Contributions can be withdrawn for any reason, so you can put your emergency fund in a Roth IRA account. In future years, you can get that money invested once you have taxable savings. https://www.bogleheads.org/wiki/Roth_IR ... gency_fund
2yrs from military pension. 80 equites / 20 bonds for life, ZERO emergency fund, 100% taxable in equities (dividends in cash). | Gone Fishing At 52yrs old!
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Jerry55
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Jerry55 »

Watty wrote: Sun Oct 18, 2020 7:45 am
Jerry55 wrote: Sun Oct 18, 2020 12:27 am I'm Retired CSRS (2012), just turned 65 and am situated similarly, but 80 C / 10 S / 10 International.
Be sure to understand the differences in the TSP inheritance laws. Here is what I have posted on that before.
[/quote]


I've researched this for over 5 years, and indeed, there ARE time limitations involved with transferring "Non-spousal" TSP to one's children.
In particular, see TSP BK31.pdf, page 11- 13, which states, in part,

"Non-spouse Beneficiary. A beneficiary who is not a surviving spouse cannot retain a TSP account.
The death benefit payment will be made directly to the beneficiary or to an "inherited" IRA.
(See page 13 for more information.) "

Pg 13, states

" A non-spouse beneficiary can avoid this withholding
and defer the tax liability by requesting
that the TSP transfer all or part of the payment
directly to an “inherited” IRA. An inherited IRA is
established specifically for the pur pose of transferring
money inherited from a plan such as the TSP.
Inherited IRAs may provide significant tax benefits
because their required distributions can generally

Pg 14
be spread across the lifetime of the beneficiary.
However, the rules governing inherited IRAs are
complicated, and there are restrictions. So before
making a decision to transfer money from the TSP
into such an IRA, we strongly recommend that a
beneficiary discuss the details of the transfer with
a tax advisor or IRA provider. To transfer a death
benefit payment to an inherited IRA or to request
that it be deposited directly into a checking or savings
account, complete Form TSP-81, Death Benefit
Election for a Non-Spouse Beneficiary. A TSP death
benefit paid directly to a non-spouse beneficiary
may not be rolled over into an IRA or plan."

So, indeed, it Can be done, if it happens, however, I've informed my children, in my will, to set up "Inherited IRA's" as per instructions from Vanguard or Fidelity (must have my name attched to the name if memory serves me correctly) THEN send in the death certificate to TSP, fill out TSP form 81 and get the ball rolling, since the account data will already be available to send back to TSP.
Note....they already have accounts at Fido and Vanguard.
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
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Jerry55
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Jerry55 »

theclumsymagician wrote: Sun Oct 18, 2020 7:51 am
Jerry55 wrote: Sun Oct 18, 2020 12:27 am I'm Retired CSRS (2012), just turned 65 and am situated similarly, but 80 C / 10 S / 10 International.

I've been disappointed with the I fund for over 2 years now, and will, in the near future 3-5 years make a similar move.
In the meantime, I'll be watching this post for further observations.

Good Luck !
Congrats on your retirement and hope you've enjoyed things since then. I have about 25 more years until I get to retire.

I recently switched from L2050 to C and S and wish I would have made the change sooner. You mentioned in the near future you would be making a similar move, but why wait until then? Just curious about your strategy.

Thanks.

No strategy in particular. The International Fund has been a laggard for some time now, and most "Professional Investors" are saying they are going that route because "International Stocks are cheaper". We'll see. They've been wrong 2 years running....I'll give them another 2-3 or so.
:sharebeer
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
Bronko
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Re: I'm 70% C and 30% S in my Traditional TSP. What is the equivalent of the C and S Funds with Vanguard?

Post by Bronko »

Jerry55 wrote: Mon Oct 19, 2020 3:17 pm
Watty wrote: Sun Oct 18, 2020 7:45 am
Jerry55 wrote: Sun Oct 18, 2020 12:27 am I'm Retired CSRS (2012), just turned 65 and am situated similarly, but 80 C / 10 S / 10 International.
Be sure to understand the differences in the TSP inheritance laws. Here is what I have posted on that before.

I've researched this for over 5 years, and indeed, there ARE time limitations involved with transferring "Non-spousal" TSP to one's children.
In particular, see TSP BK31.pdf, page 11- 13, which states, in part,

"Non-spouse Beneficiary. A beneficiary who is not a surviving spouse cannot retain a TSP account.
The death benefit payment will be made directly to the beneficiary or to an "inherited" IRA.
(See page 13 for more information.) "

Pg 13, states

" A non-spouse beneficiary can avoid this withholding
and defer the tax liability by requesting
that the TSP transfer all or part of the payment
directly to an “inherited” IRA. An inherited IRA is
established specifically for the pur pose of transferring
money inherited from a plan such as the TSP.
Inherited IRAs may provide significant tax benefits
because their required distributions can generally

Pg 14
be spread across the lifetime of the beneficiary.
However, the rules governing inherited IRAs are
complicated, and there are restrictions. So before
making a decision to transfer money from the TSP
into such an IRA, we strongly recommend that a
beneficiary discuss the details of the transfer with
a tax advisor or IRA provider. To transfer a death
benefit payment to an inherited IRA or to request
that it be deposited directly into a checking or savings
account, complete Form TSP-81, Death Benefit
Election for a Non-Spouse Beneficiary. A TSP death
benefit paid directly to a non-spouse beneficiary
may not be rolled over into an IRA or plan."

So, indeed, it Can be done, if it happens, however, I've informed my children, in my will, to set up "Inherited IRA's" as per instructions from Vanguard or Fidelity (must have my name attched to the name if memory serves me correctly) THEN send in the death certificate to TSP, fill out TSP form 81 and get the ball rolling, since the account data will already be available to send back to TSP.
Note....they already have accounts at Fido and Vanguard.
[/quote]

Smart move. Thanks for sharing.
Never let a little bit of money get in the way of a real good time.
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