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TSP and taxes

February 28th, 2012 at 08:27 am

I just changed my TSP to transfer 65% of my current savings (1300) to the 'c' fund (S&P index with expenses of 0.025) and routed all my current contributions to that fund. My other choices are tracking the Dow or International index. Or the 'lifestyle funds' which have a different percentage of the other funds. S&P index fund with low fees works fine for me.

I got an estimate on my taxes, the business lost $17,000 so I am getting $6000 back. I had a choice of putting $5000 in a ROTH or $2700 in a trad IRA (and getting more back). Decided to do the ROTH.

I started an automatic monthly withdrawal of $250 for taxes. I need to save more ($833.34 is full ROTH for k and I) but I also need to pay off k's card.

3 Responses to “TSP and taxes”

  1. creditcardfree Says:
    1330435987

    DH has 100% of his TSP in the 'S' fund, but that is because our Roth IRA's are primarily in the S&P. It has worked out as a nice balance.

  2. PurpleLight Says:
    1330442197

    I thought about the S fund, it tracks the Dow. (That was for anyone not in the know :}). I researched the difference, and from what I could tell companies in the Dow were selected by a newspaper board, while the S&P is selected by algorithm. I feel more comfortable with the algorithm selection, but that's not based on anything rational.
    Any other views of Dow vs S&P for index funds? the expenses are the same.

  3. creditcardfree Says:
    1330453489

    The S fund is tracking small cap stocks (smaller firms) and matches the Dow US Completion Total Stock Market Index specifically.

    Here's the
    Text is link and Link is https://www.tsp.gov/investmentfunds/fundsheets/fundPerformance_S.shtml
    link about that fund from the TSP website.

    I sure wasn't trying to sway you to another fund. The C fund is made up of larger US companies and is important segment to be invested in as well. For us it would be redunant since we already have the S&P 500 Index fund at Vanguard.

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