08-02-2005, 03:10 PM
The TSP did a great thing by creating the L Fund. I am in the ARMY almost every soldier I know invests only in the G fund. When on a year to 18 month deployment

You don’t have time or access to a computer and other resources to invest your money

Wisely, and when on a computer you are talking to Family not searching TSP.GOV.

I now have the opportunity to increase my returns even if only by a few percent, and share in some of the up’s that the other funds are having. I have learned many things form this web site and it’s Members on how to take control of your money and Retirement I see the L Fund as just another tool in helping me achieve my goals.

There are negative things being said on this Fund so here is a positive if looking for one.

“It’s not how much money you make it’s what you do with the money you made”

08-02-2005, 03:43 PM
I agree that the Lifecycle funds are the biggest improvement since the introduction ofthe S and I funds a few years ago. Themajority ofTSP investors should use these funds because they don't have the knowledge, time, or patience to managethe asset allocation changes. Thereward will be a biggerTSP accountin 10, 20, or 30 years. I have convinced two of my coworkers to invest in them. They like the feature of automatic asset reallocation. I plan on placing 50 percent of my TSP funds in L 2010. I will be retiring September 30, 2005 with 36 years federal service under the Civil Service Retirement System.

08-02-2005, 06:37 PM
Do you all think the computer that will be running your money has a bigger brain than you do? This is strictly coloring by the numbers - how do you feed it pizza when it's hungary - it has no gut. Well I guess it's just as good as fate - although fate may well be more reliable. Try it for 30 years and if you are not happy you can always change your mind and seek redemption from the real markets. JMHO.

08-02-2005, 11:55 PM
also. no one has mentioned that the expense ratios for the L funds are 10 times the expenses of the other funds (C S I).

60 basis points --->> L funds
6 basis points --->> (C S I) funs

over the long run, it makes a huge difference!!

08-03-2005, 03:06 AM
The claim that the L fund charges higher expenses is incorrect.

This is all taken directly from tsp.gov:

L Fund $0.60/$1000
G Fund $0.60/$1000
F Fund $0.50/$1000
C Fund $0.60/$1000
S Fund $0.60/$1000
I Fund $0.60/$1000

This amounts to an incredibly low 0.06% - which is lower than anything you can get on the outside (even my vanguard funds charge more).

08-03-2005, 05:07 AM
d.olverson wrote:
“It’s not how much money you make it’s what you do with the money you made”

Remindme not to let you be incharge of my money..........:shock:. TSP is all about the money.:^ Otherwise whats the point?

I think your quote should be:

Do you know what I'm going to do with $1.4 million.....Any damn thing I want!

08-03-2005, 05:48 AM
Reason for L funds was one more push for private accounts. ;)

Main problem the underlining funds are indexes. They have done nota in nearly seven years now. :shock::D

Would be good to add some shorting funds or some leveraged funds.

Frankly I do not even watch my TSP account anymore. To much B.S. Noon deadline, creative accounting and G fund pays when it wants to. Raising rates and the G fund is payout out less. :shock::D

08-03-2005, 09:29 AM
The most recent article from Scott Burns, a Dallas financial columnist, says
the L funds will cost 0.6% as the earlier post indicated -

Also, this is probably irrelevant since we'll all share the admin expenses, not
just those invested in L funds.

Lay off the army guy - he's right. For most investors L will be a better long
term plan than buy and hold in any one of GSFCI. Groups such as ours who
think they can beat b&h are in the minority; most of us will be wrong -

A government plan that others should emulate Federal retirement program has lower costs than big 401(k)s

08:46 PM CDT on Monday, August 1, 2005

How does the federal Thrift Savings Plan compare with industry plans?"
So asks F.C., a San Antonio reader.
Answer: It compares very, very well. Indeed, in The Coming Generational Storm (MIT Press, $17), professor Laurence J. Kotlikoff and I suggest that it could be the model for privatizing Social Security.
DallasNews.com/Extra (http://www.dallasnews.com/extra) Dept. of the Interior: TSPs (http://www.doiu.nbc.gov/orientation/tsp.html)
Failing that, virtually every 401(k) and 403(b) plan sponsor in the country should take a close look at the Thrift Savings Plan. Then they should ask a simple question.
Why isn't our plan more like the TSP?
Let's start with the basics. The Thrift Savings Plan is one of the elements in the retirement security of federal employees. The Thrift Savings Plan, like private-sector 401(k) plans, is a defined-contribution plan.
Federal employees are allowed to contribute up to $11,000 of their income, tax-deferred. They can select from a small menu of investment options. They also receive an employer contribution equal to 1 percent of annual pay.
The plan currently has five investment options: the Government Investment Fund, the Fixed Income Investment Fund, the Common Stock Investment Fund, the Small Capitalization Stock Fund and the International Stock Fund.
The options are based on major indexes and are managed by Barclays Global (the major force in exchange-traded funds). Currently, the investment options have annual expense ratios of 6 or 7 basis points.
Small expenses Yes, you read that right. Fund expenses are 6 or 7 one-hundredths of 1 percent.
This is about one-third the cost of Vanguard index funds. It's about one-tenth as expensive as the leading managed funds with the most assets.
Fidelity Magellan and American Funds Growth, the two largest 401(k) equity funds, have expense ratios of 0.62 percent and 0.7 percent, respectively. Pimco Total Return and American Funds Bond fund, the two largest 401(k) fixed-income funds, have expense ratios as low as 0.68 percent and 0.65 percent, respectively.
Most funds used in 401(k) accounts have costs about twice as high as the largest funds – about 1.2 percent. In the worst case, many 403(b) plans are burdened with annual expenses of more than 2 percent because they are based on insurance products. These plans are available to teachers and state employees.
In fairness to private companies, it should be recognized that the Thrift Savings Plan is gigantic, with $159 billion in assets and 3.4 million participants. It can achieve massive economies of scale compared with plans for relatively small organizations.
Starting Aug. 1, the TSP will begin to offer five new lifecycle funds with maturities ranging out to 2040. These funds will be built with different allocations of the five index funds but will have a materially higher expense ratio, 0.6 percent.
Test model To test the impact of fees over a working lifetime, I used an accumulation model that starts with a 25-year-old worker who saves 10 percent of gross income. (Remember, this is just an exercise!)
The worker enjoys a gross return of 9 percent and annual raises of 4 percent in an economy where inflation averages 3 percent. The worker also hopes to accumulate enough in savings to replace about 60 percent of earning power when retired. To do that, his nest egg will need to be 17 to 25 times his final target income.
A federal worker whose plan has negligible plan expenses would accumulate 17 years of needed final income by age 56. A worker in a typical 1.2 percent annual cost plan would accumulate only 13.8 years. And a worker in an expensive 2 percent cost plan would accumulate only 12.7 years.
Workers in high-cost plans would accumulate 26 percent less than workers in the Thrift Savings Plan.
The gap gets worse, not better, for those who work longer. By age 67 the worker in the high-cost plan is at a 40 percent disadvantage to the worker in the Thrift Savings Plan.
Some readers will say high-expense plans will compensate by delivering superior performance. The answer to that is simple: Check history.
Scott Burns answers questions of general interest in his Thursday columns. Write Scott Burns, The Dallas Morning News, P.O. Box 655237, Dallas, Texas 75265, or send an e-mail.
E-mail sburns@dallasnews.com

08-03-2005, 11:04 PM
Thefact sheet for the Lifecycle funds states the administrative costs forall L funds is the cost chargedfor the underlying funds they invest. There is no extrafee for the L funds according to all published literature from the Thrift Savings Investment board.This is fee amounted to $0.60 per $1000 invested in 2004.

Of course, the administrative costswill likelyincrease as they did in 2003 when wepaid extra for that failed AMScontract. There was an extra3 basis points assessed ($0.30 per $1000) that year for a total of 9 basis points. The company that administers theL funds doesnot work for free. Does anyone know what TSP pays for this service? Ipredict an extra fee will eventually be assessed to service the L funds. It should be born by those who invest in these Lifecycle funds. A couple extra basis points seem a reasonable charge for this service.