'Bucket' strategy for TSP


Q. I am interested in seeing if the Thrift Savings Plan can be managed on a bucket type of withdrawal strategy. I realize it would take an act of Congress to get the rules changed. Can you identify the member of Congress whose pet project is the TSP?

A. No, but you can use a “bucket” strategy in the TSP now. Just allocate your account the way you’d like, take your withdrawal and then rebalance your account. The “bucket” strategy is just another way to look at an asset allocation strategy. Even if you use “buckets” for your money, there is always an underlying asset allocation being implemented.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

1 Comment

  1. http://www.sec.gov/news/press/2012/2012-177.htm

    You may wish to google Ray Lucia & the SEC. As per the SEC, Lucia fudged his numbers and skimped on his paperwork supporting his buckets formula. (You can do a “buckets” type scheme within the TSP but it requires you to rebalance your TSP account after every withdrawal. So once a month.)

    Frankly the “buckets” thing seems full of holes as your asset allocation can turn out of whack – you can become stock heavy and be in danger of a market drop. Consider a lower number L fund instead, say L2020.

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