Other investment companies


Q. I’ve been retired for a few years and I’ve put 100 percent of what I have in to the C Fund that was closest to my life expectancy. I know I can’t purchase any more shares and that the way I make money is for the value of the shares to rise.

I’ve been told that if I roll my Thrift Savings Plan account over to a company such as Fidelity, Schwab or Vanguard  my monthly dividends would buy more shares and not only would my funds increase but my shares would too.

A. I don’t see a question here, so I’ll ask one about what you’ve been told: “So what?” Can you, or anyone else, explain to me why using dividends to buy more shares is better? You’ll definitely lose the TSP’s low cost and access to the G Fund, which will hurt you. What’s the solid reason for making this sacrifice?

This is a sales pitch based on a fact that has no bearing on the decision. Don’t fall for it.


About Author

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.

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