[TSPStrategy] Mutual Fund Window - Upcoming TSP Changes

Here's the proposed rule to the upcoming TSP "mutual fund window" accounts:
https://www.federalregister.gov/documents/2022/01/26/2022-01312/mutual-fund-window

The comment period closes on March 28.

I know an article regarding this was shared recently. I thought I'd share the proposed rule and mention some of its main points.

Fees
- $95 annual maintenance fee
- $55 annual administrative fee
- $28.75 per trade fee
- Mutual fund expenses
- Any other potential fees (most load funds are 1-2%)
- That's alot of fees

Restrictions
- Minimum $10,000 must be transferred to open the account
- Maximum of 25% of TSP "Core Account" (current TSP plan/funds)
- Therefore, a TSP "Core" account should have at least $40,000 to start participation
- Transfers in any direction between "Mutual Fund Window" and "Core" accounts count towards the monthly limit for interfund transfers
- Withdrawals from the TSP must only be made from the "Core" account

General Process
- Must first invest in TSP "Core Account"
- Establish a "Mutual Fund Window" account
- Have a signed and filed form acknowledging potential risks
- Funds from "Core" to "Mutual Fund Window" go to a sweep mutual fund (like cash account)
- Select from funds available through "Mutual Fund Window"

I plan on submitting comments requesting clarification of (or specific) due dates for the fees, clarification on maintenance and trading fees (determination and any future fluctuations), and how the acknowledgment form should be submitted (electronic?).

At the point in my life, I don't think I'll participate in this. I also acknowledge that as the proposed rule points out, it'll need additional financial education. Also the list of fees is exhausting, but if this was available 20 years ago I likely would've checked and maybe considered some sector funds.

Anyhow, thought I'd share this.


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Ditulis oleh: Andriansyah -