TSP With a Pay-To-Play Arrangement

A magazine reporter once questioned a PGA Tour golfer about their starting salary. Their response was that, for their first year, they actually lost money. Today’s economy makes establishing a career in this profession more expensive than a generation ago. Accommodation, food, and transit costs rapidly increase while traveling for weeks. Then there are the tournament fees, a fixed salary for the caddy (who also gets a percentage of winnings on a scale with more for top finishes and wins), coaches, trainers, dietitians, etc.

To succeed, you must break even. When the TSP investing window opens in June, it’s crucial to provide participants (within constraints) access to outside mutual funds. Investors have long grumbled about the TSP’s limited choices of broad, index-based products. Success costs them.

It will take some time before the TSP becomes a full-fledged pay-to-play organization. In response to a minority of investors treating their TSP funds more like passbook banking accounts than long-term retirement savings, the program decided to start charging $50 for customers who took out a loan. Loans were taken out for various reasons, such as paying a semester’s worth of college tuition and then repaying over some time via paycheck withholding. The TSP’s overhead increased due to each of those transactions, and the program determined that individuals who caused the expenditures should bear the burden.

So, it shouldn’t be surprising that the TSP has adopted the same investing strategy. The $28.75 trade fee is an additional charge. As a result, if a person decides to invest $10,000 outside of a mutual fund, they will be approximately 2% behind at the start of their new investment.

Are mutual funds focusing on specific market sectors, or even wide ones, capable of beating the TSP stock index fund in terms of performance? Sure. At the very least, it will have to perform at least as well to avoid a financial loss. And the losses will be more significant if it becomes worse. The TSP aims to “redetermine” such costs every three years, implying they will go up or down depending on market conditions. There will also be an additional $600 cost for processing alimony and child support orders as part of the more extensive set of changes to the TSP tied to the new record-keeping system.

To make the TSP more affordable for investors, the program’s general expenditures are divided out among all participants reasonably. On the other hand, certain services come at an additional cost, and individuals using them are expected to foot the bill. Even if individuals who must pay the fees feel slightly irritated, that’s how the TSP is going.

Contact Information:
Email: [email protected]
Phone: 6023128944

Bio:
Mike was born in Chicago, Illinois on August 13, 1946. He was brought up in the
suburb of Skokie on Chicago’s northwest side and graduated from Niles Township (
East ) high school In 1964. Two years later he joined the US Air Force in November of
1966. After 2 years of Intense training he volunteered for Viet Nam and was sent to
Bien Hoa Airbase, which was 25 miles from Saigon, the nation’s capital. He
volunteered for a number of especially dangerous missions on his days off, such as
flying as a door gunner on a US Army helicopter and as a technical assistant on a
psychological operation on an Air Force O-1E observation aircraft. Capping off his
impressive accomplishments was winning the coveted Base Airman of the Month for
March 1969, a feat which was featured in the Pacific Stars And Stripes newspaper
read by every service man stationed in the Pacific theater of operations. After his
Viet Nam tour of duty he was stationed at Luke Air Force Base in Glendale, Arizona
where he met and married his wife, Lequita.
He graduated from Arizona State University in May, 1973, and after a 30-plus year
career as a financial advisor he joined a number of service organizations including
Easter Seals and Valley Forward, sponsor of EarthFest. He was also involved with the
National Federation of Independent Business and became the longest-serving
chairman of the Leadership Committee ever. He spoke before the ( AZ ) House Ways
and Means & Senate Finance committees. He then joined Disabled American
Veterans ( DAV ) in September of 2015. He rose quickly through the ranks and
became Chapter 8 Commander in May of 2019 where he served with Distinction for 3
years before being “ termed out”. The next year, as Vice Commander, he won the
title of National Champion Recruiter!