jbolden1517 wrote: ↑
Sat Aug 12, 2017 4:09 pm
Allan Roth wrote: ↑
Sat Aug 12, 2017 11:07 am
The TSP is great but they do something similar by having the C and S fund when they could just have a total US stock fund. And the I could also include EM to be broader.
I know a lot of people who hold more S than C. Certainly not 70% C, 30% S. They don't want to hold the market at market weights. Certainly the TSP could further restrict choice. Which was my point above to Victoria, the reason people are unhappy with TSP is that it is forcing a very specific investing theory on them and not offering choice to design a plan that meets their goals. The fact that you may happen to agree with that investing theory doesn't change the coercive nature of only offering it.
The TSP is by far the best 401(k) type program that I've ever been involved with (2x employers, 4 plan providers, 5 sets of fund choices over time).
I love the TSP. They are able to deliver quality funds cheap because of volume, restricted fund choices, and restricted transactions. I would like to see the two fund changes that Allan discussed, but no others. Any changes other than combining C & S funds, would cause higher expenses. We have about 25% of our investable assets (and growing because of contributions) in the TSP. The frequent transaction restriction, the limited fund choices, and withdrawal restrictions in retirement not only lower costs but also address specific behaviorial finance issues. The idea is not to cater to a few sophisticated investors but to provide the best plan for the bulk of employees.
My only real complaint, other than the lack of EM in the I Fund, is that the LifeCycle Funds are too conservative for my taste, but that is easily addressed by investing roundin up to the next decade fund and adding decades until you get the glide path close to what you want.
Since we're guessing about future returns, distribution of return among asset classes, and sequence of returns, while a few point difference in the asset allocation will make a difference, none of us can be sure whether it will help or hurt.