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The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees and members of the uniformed services. It is similar to a 401(k) plan in the private sector. One of the benefits of the TSP is that you can transfer or roll over your account balance into another qualified retirement plan or take a cash distribution when you leave federal service.
However, when you trade in your TSP account for cash, you may not receive the price you were expecting. Here are answers to some common questions about the price you actually get when you trade in the TSP.
What is the TSP share price?
The TSP share price is the price at which the TSP mutual funds are valued. The price is calculated every business day and is based on the net asset value (NAV) per share of each fund. The NAV is the total value of the fund’s assets minus its liabilities divided by the total number of shares outstanding.
The TSP share price is important because it determines the value of your account balance and the price you will receive if you decide to trade in your TSP account.
How is the TSP share price calculated?
The TSP share price is calculated using a formula that takes into account the NAV of each individual fund in the TSP. The NAV is determined at the close of each business day and is based on the market value of the fund’s assets.
The formula for calculating the TSP share price is:
TSP Share Price = (Sum of the NAV of each individual fund x Number of shares outstanding) / Total shares outstanding
What is the bid-ask spread?
The bid-ask spread is the difference between the price at which buyers are willing to buy a security and the price at which sellers are willing to sell it. In the case of the TSP, the bid is the price at which the TSP will buy back shares from you, and the ask is the price at which the TSP will sell shares to you.
The bid-ask spread is important because it can affect the price you receive when you trade in your TSP account. The wider the bid-ask spread, the less you will receive when you sell your shares.
How does the bid-ask spread affect the price I receive?
When you trade in your TSP account, you will receive the bid price, which is the price at which the TSP is willing to buy your shares. The bid price is typically lower than the ask price, which is the price at which the TSP is willing to sell shares to you.
The difference between the bid and ask price is the bid-ask spread. The bid-ask spread can affect the price you receive because the wider the spread, the lower the bid price will be. This means you will receive less for your shares if the bid-ask spread is wide.
It is also important to note that the bid-ask spread can vary depending on the demand for the fund and the market conditions. In general, the bid-ask spread tends to be wider for less widely traded funds.
What can I do to maximize the price I receive?
To maximize the price you receive when you trade in your TSP account, it is important to understand the bid-ask spread and the market conditions for the fund you want to trade. You may consider trading during periods of low demand or for more widely traded funds.
It can also be helpful to consult with a financial advisor or research the price history of the fund you want to trade to identify any patterns or trends.
In conclusion, the price you receive when you trade in your TSP account is influenced by the TSP share price, the bid-ask spread, and the market conditions. By understanding these factors and doing your research, you can maximize the value of your TSP account when you decide to trade it in.
You are the only one I could find to explain the day's TSP price. With today's economic volatility, your advice is vital to military and Federal personnel's TSP.
Your clock ain't working.
Last comment about TSP loans that I Totally fell for: They say that "you pay yourself back, plus interest", which is not Un- True. BUT, what they don't tell you is, you will have SQUANDERED countless thousands (tens of thousands?) of dollars in market earnings meanwhile. Again: Do. Not. Take. TSP. Loans.
TSP loan person: 1st, listen to Dallon's advice. Second, my advice: Never take a TSP loan (I did; regret it regret it regret it). Not only does it linger for tax purposes, it dings your market returns. Basically, TSP loans take a baseball bat to the knees of your investing. Don't do it unless you are absolutely at death's door.
experienced this last week – intrafund transfer from C/S to F fund. Was a DJIA up day but the balance went down about $1k than I expected. Got the transfer in before 12 pm EST so I thought it would be up but it wasn't.
Hi, I'm a recent subscriber. During retirement, are the deductions for health insurance. Life insurance and survivor benefits before taxes?
Could you make a video on using your TSP for a ROBS account as business capital? Thank you.
The TSP is designed and works best for ‘Investing’ not ‘Trading’. If you want to day trade and dollar cost average the stock market then open up a Brokerage account and buy individual stocks. Would be a very bad idea to compromise your TSP account on a market speculation buy and then does not work out well; look at AMC.
If youre special provisions fers and retire before 50 you have to wait until 55 to access the tsp.
You need better audio!!!
You can only do two trades per month into the C, S, F and I funds. You can do any number into the G fund.
Great questions and informative answers. Regarding an outstanding loan, I believe you have 90 days to pay it back if you retire. Otherwise it's considered a distribution. So if you had an existing $20k loan, would there be any difference in paying it off and then taking $20k out again, or just letting the original $20k loan be declared a distribution?
Thanks
Really appreciative for all your info. Do you think you could address how working 72/80 (supposedly same as being full time) affects the FERS pension? I’ve looked all over the net and I can’t find anything about it.
Thank you!!!
Always so informative! I have shared your Channel with several coworkers who also agree.
You have no idea how much I appreciate your videos. They are far better and more informational than any retirement training I’ve attended in 25 years. Thank you! Retirement in Nov 2021!!