NSurf9 Account Talk

[nsurf9]

This self-directed IRA avoids most all the of pitsfall of a traditional IRA, a mutual fund and the TSP main fund - prohibitions, restrictions and additional fees to reduce systematic costs and investment pool dilution.

In contrast to all of the above, a true self-directed IRA has very few limits as to investment class and can enjoy the same low cost of buying stock thru bargan brokers. Think of buying DWCPF ETF on your own thru AmeriTrade, only with tax deferred money. The fact is, I would prefer that my TSP investment was in an unrestrained self-directed IRA - but I would have to seperate from the Government. At least this way, I wouldn't have to leave the Government and roll my retirement into one to get what we all want.

Requiring some some kind of restaint, however, may be necessary for its TSP rulemaking passage. Make no mistake, it doesn't have to be limited to TSP ETFs.

Investment Options for Self Directed IRAs

am I missing something here?
does anybody else understand this could be the holy grail, and we don't even have to fight for in court?

 

[nasa1974]

am I missing something here?
does anybody else understand this could be the holy grail, and we don't even have to fight for in court?

nsurf9, you are doing a great job. I think the problem is nobody understands what a self-directed IRA is. I know I don't, but plan on checking some of this out. I have been a little busy lately but some free time has just become available. Again, thanks for all your hard work.

 

[nsurf9]

IF YOU UNDERSTAND THIS AND THINK ITS AS GOOD AS I DO - "LIKE" IT SO I CAN GET SOME FEEDBACK!

NASA, check the link above on options for a self-directed IRAs.

The trick is going to be to get a rule making change to effect it. The beauty is Congress provided the window in the original Act; the main players are already in favor and voted for the window thru, with some dissenting vote killing the mutual fund option. I don't like the mutual fund option either, it gets us less that we already have and would cost us more - TSP already is the best pooled tax-deferred vehicle out there. A self-directed IRA, on the other hand, doesn't have the restrictions or exessively high costs associated with TSP or traditional mutual funds, because its's not a pooled - - and you can invest in a wide range of assets and equities on your, own under a tax deferred umbrella. Moreover, the self-directed IRA very effectively removes what the descenting votes were complaining about; and if limited to specific ETFs, would remove large risk in participants putting all of their retirement funds in, say Solindra.

While the self-directed IRA is not a "mutual fund" that Congress implemented in the original Act, or what the negotiated rule making voting was specifically about - is it, similarly, a tax-deferred retirement investment vehicle. Additionally, with some modest restrictions to investing in ETFs, TSP participants would be using the same tracked funds that TSP is mandated by Congress to track for the TSP program. Participants would still need a balance in their fund to reasonably cover brokeage costs, but a $10k balance would probably get them there (someone with only $2k would be likely be better off in the main TSP funds and program).

NASA, everone, I believe this is the IT! This can solve all our grips with the restrictions and even improve the TSP Program before the 2008 TSP rule restrictions.

(NASA, I'm goint to PM you on this - its that important.

 

[CrabClaw]

So you may want to post all of this in the other thread you have going for this discussion as some folks may be looking there.

One question is why do the ETF's that we could choose from be restricted, why not have the tracked funds plus others? Or am I misunderstanding that?

Thanks for all of your hard work on this.

 

[PessOptimist]

Thanks for all your efforts Nsurf9.

Your sudden euphoria today and the last few disjointed posts in the "My Money..." thread confuse me.

As a member of the great unwashed TSP investor herd, please explains this simply.

Have you changed the goal? Are you saying we need and are authorized yet another fund. Who willl manage it? FRTIB? ETAC? Black Rock? For no fee? The two government entities will oversee money we as investors invest with a company such as Ameritrade?

I may be wrong but companies such as Ameritrade may all ready offer traditional (tax deferred) IRA acounts.

We have four investment funds. F, C, S and I.

From TSP.gov:

"The Federal Retirement Thrift Investment Board currently contracts BlackRock Institutional Trust Company, N.A. (BlackRock) to manage the F, C, S, and I Fund assets."

"BlackRock Funds
Although the BlackRock funds operate in a manner similar to mutual funds, they are not, in fact, mutual funds and are not open to individual investors. Furthermore, they are trust funds that are regulated by the Comptroller of the Currency, not by the Securities and Exchange Commission, and therefore do not have ticker symbols."

OK great. Most of us understand this. So you propose another investment vehicle of some kind.

I invite you to step back, take a few breaths, drink nothing you are offered by anyone and explain in simple terms your new goal.

I see no "holy grail".

PO

 

[nsurf9]

The below link is only one of many brokerage types that offers traditional self-direct IRAs - there's lots more, including USAA. I picked it because its pretty clear as to what you can invest in. In my opinion, its probably the best way to invest, tax deferred, - nowithstanding metal bullion that some can, effectively, make tax free.

Investment Options for Self Directed IRAs

The options for such a fund don't have to be limited and the fact is the span of tax deferred investments just about unlimited. I'm close to rolling my own TSP funds in one, myself, even if this doesn't get thru. Its just that one of the tenants of TSP is to protect us from ourselves and the ETFs of large groups of stocks does this and would be more pass-able in a rule making effort.

 

[nsurf9]

Thanks for all your efforts Nsurf9.

Your sudden euphoria today and the last few disjointed posts in the "My Money..." thread confuse me.

As a member of the great unwashed TSP investor herd, please explains this simply.

Have you changed the goal? Are you saying we need and are authorized yet another fund. Who willl manage it? FRTIB? ETAC? Black Rock? For no fee? The two government entities will oversee money we as investors invest with a company such as Ameritrade?

I may be wrong but companies such as Ameritrade may all ready offer traditional (tax deferred) IRA acounts.

We have four investment funds. F, C, S and I.

From TSP.gov:

"The Federal Retirement Thrift Investment Board currently contracts BlackRock Institutional Trust Company, N.A. (BlackRock) to manage the F, C, S, and I Fund assets."

"BlackRock Funds
Although the BlackRock funds operate in a manner similar to mutual funds, they are not, in fact, mutual funds and are not open to individual investors. Furthermore, they are trust funds that are regulated by the Comptroller of the Currency, not by the Securities and Exchange Commission, and therefore do not have ticker symbols."

OK great. Most of us understand this. So you propose another investment vehicle of some kind.

I invite you to step back, take a few breaths, drink nothing you are offered by anyone and explain in simple terms your new goal.

I see no "holy grail".

PO

i have never suggest another fund - I have suggest what Congress, the TSP Executive Director and the Chairperson for the ETAC have already voted for and are in favor of - a window thru TSP. Yes a company like Ameritrade, or other arms' length person or entity, would have to invest the fund for you under the self-directed IRA rules. The difference from what they have considered in the past, a window to a mutal fund, is that the self-directed IRA can fix all the negatives. If you read my other posts on this, hopefully I have made clear that a U.S. District court battle with TSP will not only be a costly, arduous, probablly years long battle - we are not likely to win, because it was the product a concensus based, legislative rulemaking act of TSP.

The marked difference of a self-directed IRA and a traditional IRA is under a "true" self-directed IRA, you control (hence self,) your investment selections, but they are still tax deferred and similar to the mutual fund.

 

[PessOptimist]

OK, dawn may be starting to break over Marblehead. Or not.

My thought was if you can all ready open a self directed IRA with any of several companies, why involve FRTIB or ETAC at all?

In my case, I can contribute $6000 to a traditional IRA tax deferred. I can contribute $22,500 to TSP tax deferred. Am I on the right track here?

The marked difference of a self-directed IRA and a traditional IRA is under a "true" self-directed IRA, you control (hence self,) your investment selections, but they are still tax deferred and similar to the mutual fund.

I am still a little confused by that statement as many of the companies you have mentioned offer a "self directed" traditional IRA. As you state below.

The below link is only one of many brokerage types that offers traditional self-direct IRAs - there's lots more, including USAA. I picked it because its pretty clear as to what you can invest in. In my opinion, its probably the best way to invest, tax deferred, - nowithstanding metal bullion that some can, effectively, make tax free.

Investment Options for Self Directed IRAs

The options for such a fund don't have to be limited and the fact is the span of tax deferred investments just about unlimited. I'm close to rolling my own TSP funds in one, myself, even if this doesn't get thru. Its just that one of the tenants of TSP is to protect us from ourselves and the ETFs of large groups of stocks does this and would be more pass-able in a rule making effort.

I am going to sleep on it.

PO

 

[nasa1974]

PO, if I am reading what NSurf is saying and understanding it correctly the "self-directed IRA" would be another option we would have to take our contributions and matching funds, for those that get it, just like the ROTH IRA that will be starting up soon. We all have the option to take any money we have left over from our paychecks to invest in anything we want. This would be a government option for our retirement. It appears that the avenue we are trying to persue to force the FRTIB to increase our IFT's and extend the cutoff time to closer to 4pm EST would be a costly endever and something we would probably not win. If the FRTIB would offer a "self-directed IRA" it would give those members that want unlimited control over their retirement account that opportunity to do so vs. the current TSP restrictions.

 

[nsurf9]

NASA, that's pretty close, you could only use your tax deferred monies. They would have been moved thru the window and probably track of by TSP. But for example Monday morning, not only would be able to buy the equivalent of the S fund in the EAFE or Russel 2000, anytime or number of times during the day, but you could, according to the self-directed IRA rule and the particular broker, invest in the below funds. Yes it would would incur brokerage fee, but it could be something like $4.95, or the like. TSP may not sit well with everything that is available, but here are just some self-directed IRA investing opportunities open to you:
•Precious metals

•Limited Liability Companies

•Private Limited Partnerships

•Secured and Unsecured Notes (Mortgages and Deeds of Trust)
•Real Estate – apartments, single family homes, commercial property and undeveloped land

•Partnerships and Joint Ventures
•Private Stock
•Publicly traded stocks, bonds and mutual funds
•Other investments
◦Judgments/Structured Settlements
◦Tax Sale Certificates
◦Car Paper
◦Factoring
◦Accounts Receivable
◦Commercial Paper
◦Equipment Leasing

 

[Khotso]

nsurf9, you are doing a great job. I think the problem is nobody understands what a self-directed IRA is. I know I don't, but plan on checking some of this out. I have been a little busy lately but some free time has just become available. Again, thanks for all your hard work.

Ditto Nasa nsurf6. You are doing and have done a great job and service for all of us -- and I really appreciate that -- don't know where you get the tenacity for it, but it's great.

What I don't understand is how this would get accomplished. If the TSP doesn't offer it (a self-directed IRA option) now, how would we go about getting them to create one?

 

[nsurf9]

Great question. This option, perhaps even in a Rothe form as well, would take the same path at the attempted passage of the traditional mutal fund option that TSP has failed at passing. The big difference is that this option removes the na-sayer ETAC union and agency representatives opposition of novice TSPers generating excessive costs associated with making transfers in the mutal funds. And, it has none of the restrictions, prohibitions associated with pooled funds like in TSP or a regular window thru TSP mutal fund.

The beauty is TSP Exec Director, Long and ETAC Chairperson, Dailing (the main players) are already in favor and have, as a matter of record, voted for the window thru TSP option. I just recently discovered this.

All we have to do it is move them to put this on the TSP meeting agenda (in theory they're already in favor of it) and move it thru the negotiated rulemaking path one more time - it should pass if it has some risk mitigating, or other reasonable, modification or limits to the self-directed option.

I'm tell you - I have seen the light to our frustration with the TSP 2008 IFT Rule restrictions and it has the potential make our TSP platform a whole lot better than even before the 2008 restrictions - - and this is it.

This would all allow any TSP participant to not only be proative, but have a sense that their money is still theirs.

Right now the S herd stampeed up, and up its probably over and the market is likely headed for some significant sideways chop, or worse. Further, its early in the month and Friday afternoon you probably went thru the analysis of should I pick-up on the significant Friday drop, at the noon IFT deadline, or save the IFT because you don't want to have to dodge the potential falling knife Monday morning and loose your one round trip and be forced to sit in the no-return G fund; or even worse needlessly suck up the loss and hope for a pop when their may not be one before you suffer gut-wrenching losses before you recover.

I'm not sure if I'll get to use it, but at least 4.5 million federal government employees will not needlessly suffer the ridiculous fustriation of loosing 10 of thousands dollars because they don't have any IFTs left, or are so chilled by that restriction, that they afraid to move either in to equities, or out of them, or loose their natual instincts for something that should have cost -------$4.95.

 

[nsurf9]

I determine to light up this board with "LIKES"!

Ok, so what's a self-directed IRA and why do I think its so good and why do I think the TSP Board, the ETAC Representatives, and Unions will buy it.

According to Wikipedia, the definition of a self-directed IRA is:

A Self-Directed Individual Retirement Arrangement is an IRA that requires the account owner to make investment decisions and investments on behalf of the retirement plan. IRS regulations require that either a qualified trustee, or custodian hold the IRA assets on behalf of the IRA owner. Generally the trustee/custodian [sort-a-like what the TSP Board used to be] will maintain the assets and all transaction and other records pertaining to them, file required IRS reports, issue client statements, assist in helping clients understand the rules and regulations pertaining to certain prohibited transactions, and perform other administrative duties on behalf of the Self-directed IRA owner for the life of the IRA account. The custodian usually offers a selection of standard asset types that the account owner can select to invest in, such as stocks, bonds, and mutual funds. In addition, most custodians will also permit the account owner to make other types of investments. The range of permissible investments is broad, however, the IRS does place limits on the types of assets that may be invested in and on the types of transactions that may be carried out.

Self-Directed IRA - Wikipedia, the free encyclopedia

Besides the TSP main players - Gregory Long, the Executive Director of TSP; and, Clifford Dailing, Chairperson for ETAC (the head TSP representative voice) - already voting "YES" to the window thru-option. A modified, self-directed IRA, in lieu of the mutual fund window, would effectively remove every pitfall associated with a traditional IRA, a mutual fund, and the TSP main fund's prohibitions, restrictions and additional fees that increase TSP systematic costs and reduce TSP fund specfic, investment pool dilution.

And, if invested in ETFs that approximate TSP funds, would not subject TSP participants to any more risks than what was associated with the F, C, S, and funds before 2008. Only, it removes all the risk and frustration associated with the lack of mobility, now imposed by the TSP 2008 IFT restrictions. Additionally, it would allow FRTIB / TSP to make changes in investments available to TSP members, without the costly computer programming changes TSP (us) pays to add or subtract any new funds.

 

[nsurf9]

I'm not seeing more "likes." For those TSP Talk donkeys out there, let me knock it straight out the park and into permanent orbit for you.

Consider this example of what you can do in a self-directed IRA.

Say a relative, a child or grand-child, needs help with their school loans, for example. Under your TSP modified, self-directed IRA, you could really “loan” them the money to pay off their ready to double the interest rate, school loan, at a reasonable 1.5% interest rate; and it would be repaid right back into your self-directed IRA.

See the quoted testimonial from the Entrust Group:
Investment Options for Self Directed IRAs

And if that doesn’t open your eyes to the possibilities, there are a lot more.

 

[CrabClaw]

Nsurf9,

You seem to be really excited about this possibility which is great. I can also tell you have worked very hard on this on behalf of yourself and all feds who would like more freedom in managing OUR money. I am concerned that the entity who stonewalled what congress approved and put in place the IFT limits to begin with wont hesitate to squash a grassroots effort like this one. Like Khotso pointed out below why don't we have this window already if congress approved it? Is there some unknown that will stop your effort in it's tracks? I sure hope not but it is hard to get revved up when, at the end of the day, you realize that it is the big brother gubmint we are talking about.

I know you have put forth a great deal of time researching this stuff and your knowledge on the subject is most likely greater than the rest of us. I also know that most proactive people on this site probably feel let down by the FRTIB and the lack of success with past efforts of this kind. That might explain the lack of enthusiasm thus far; however if what you have discovered is for real then I think sooner rather then later you will get your flood of support.

A self directed IRA through TSP would be wonderful as long as any BS that went with it was kept to an absolute minimum.

Thank you for your hard work.

 

[tsptalk]

I'm not seeing more "likes." For those TSP Talk donkeys out there, let me knock it straight out the park and into permanent orbit for you.

Great stuff, nsurf9! As I mentioned before, putting this info in your Account Talk thread will probably not generate the attention you want for this message. Even the other thread you started, "My money, out TSP Fund..." doesn't convey what you are trying to say.

I would suggest that the title of the thread needs to be short and direct to get attention. Something like: "TSP IFT Limits Update"

 

[nsurf9]

I would suggest that the title of the thread needs to be short and direct to get attention. Something like: "TSP IFT Limits Update"

Will do. I'm consolidating the info into a better read and will post it on both forums.

The fact of the matter is Long and Dailing have already voted yes on a similar mutual fund window-thru option for TSP. (I wouldn't have vote for it because TSP is already better than all of them). Their positive vote, however, seems to very clearly indicator their favor of the window. There could be other negatives I've considered - you'ld have to get the broker providers to participate in the modified offering - something like the health offerings, for example. Its just that a modified self-directed IRA removes the critism voiced by those that voted against it on the last go-around.

I'll probably give Dailing another call and soundboard this with him and see if he might like to make a success of his and Long's last vote on the window-thru - this time with a modified-type self-directed IRA.

 

[SkyPilot]

And just like FaceBook, we also want a DISLIKE button as well! Then, we will be ready to take TSPTalk to an IPO! Now, how to get my shares ahead of time?

 

[nsurf9]

Nsurf9,

I am concerned that the entity who stonewalled what congress approved and put in place the IFT limits to begin with wont hesitate to squash a grassroots effort like this one. Like Khotso pointed out below why don't we have this window already if congress approved it? Is there some unknown that will stop your effort in it's tracks? I sure hope not but it is hard to get revved up when, at the end of the day, you realize that it is the big brother gubmint we are talking about.

I just read the minutes last Thurday. The report from the August 2011 minutes is what made do a 180 degree on the judicial challenge - is occurred to me that might just understand our plight, and the law suit, even if we could succeed, is the wrong course. I believe we can give them something that not only makes TSP the best, lowest cost mutual type fund in the country, but even better - the best retirement plan in the country. The plan is to give them something so good for TSP participants and the TSP Board, itself, they will not be able to vote down - and "like" up their Board, too.

I will post all other limit change related post in "My, our fund, and the TSP IFT restrictions."

http://www.frtib.gov/pdf/minutes/2011Aug.pdf

Mr. Trabucco also reported to the Board that Mr. Long testified at a hearing before the House Subcommittee on Federal Workforce, U.S. Postal Service, and Labor Policy on July 2. Mr. Trabucco said there were two notable topics of discussion during the hearing. First, Congressman Lynch expressed to Mr. Long that he remains interested in seeing the TSP offer a mutual fund window, as authorized by the Thrift Savings Plan Enhancement Act of 2009. Mr. Trabucco reminded the Board that the vote was 2 to 2 (with one Board member absent) the last time the Board considered a mutual fund window and that ETAC members were similarly divergent in their opinions. Mr. Long added that Clifford Dailing, who represents the National Rural Letter Carriers Association, indicated that he might like to see ETAC and the Board revisit discussions about a TSP mutual fund window. TSP Executive Director Greg Long defended the mutual fund window option as a way to meet the demands of a small group of participants without changing the overall nature of the TSP. He noted that he had no plans to implement it until the ETAC and FRTIB agreed to the plan.

 

[nsurf9]

TSP Executive Director Greg Long defended the mutual fund window option as a way to meet the demands of a small group of participants without changing the overall nature of the TSP. He noted that he had no plans to implement it until the ETAC and FRTIB agreed to the plan.

Sorry, this is the last post on the IFT limits. I had to clairfy this last line. I seem to have mix the two Board minutes together. The above line comes from the November 4, 2009 (PLANSPONSOR.com).

Reading this complete article, you also should notice it that delineates the concerns of the dissenting TSP voting members, and again, how a modified, self-directed IRA not only answers how TSP would not have to add an endless line of requests for different funds offerings, but also eliminates the nay-sayers risk and high cost concerns associated with a mutal fund.

Additionally, how it would remove every pitfall associated with a traditional IRA, a mutual fund, and the TSP main fund's prohibitions, restrictions and additional fees that increase TSP systematic costs and reduce TSP fund specfic, investment pool dilution.

And lastly, if brokerage providers were screen by TSP and met certain standards, would also shield individual TSP participants from a barage of questionable and numerous brokerage offerings - - and we get no limit to IFTs, more types of offerings, no time limits - I think that's enough for one weekend. Good night.

PLANSPONSOR.com - Lawmakers, Unions Say Mutual Fund Window too Risky for TSP