Get Your TSP Professionally Managed for $10/Month with Blooom

by | 21Jun2018 | Financial Planning, Retirement, Thrift Savings Plan | 0 comments

We’ve tried to show you how to manage your Thrift Savings Plan (TSP), but if you just don’t want to do it yourself you can have Blooom do it for $10/month. At a minimum, they’ll give you a free checkup on how you’re doing with no strings attached. Let’s talk about the service they offer and take a look at what their free check-up looks like…

 

What They Offer

For $10/month they will:

  • Fix your TSP (or other employer sponsored retirement plans like a 401k, 403b, etc.) by optimizing your fund choices and minimizing hidden fees.
  • Manage and monitor your account, keeping you on track for retirement.
  • Allow you to cancel at any time.

Let’s dig a little deeper and see what they had to say about my TSP account.

 

My Free TSP Analysis

Here is what it looks like when you get a free analysis from Blooom. First, you go to their website and request their free analysis, which takes you here:

 

I clicked next and went here, giving them my name, birthday, and the year I’d like to retire. Although 65 is the default value, I put in age 55, which is when I plan on retiring from the Navy after a 30 year career:

 

That took me here to create an account with them:

 

After that was done, I went here and entered “Thrift Savings Plan” in the box at the bottom:

 

Then I went here and entered my login info for my TSP account:

 

The Free Analysis

After I did all of this, the analysis was complete in a few seconds. Here is what it said about my TSP account:

 

I was more than a little skeptical that I needed to change anything, but here’s what they said:

 

Okay, so not really much of a change, which is what I expected. All the TSP investments pretty much have the same 0.03-0.04% expense ratio so there really isn’t much they are going to improve on when it comes to fees. When I clicked the “Tell Me More…” box this is what showed up:

 

They prioritize low cost funds, which is certainly good for anyone using their services. Again, it is not an issue in the TSP but certainly is in other retirement accounts.

Next they assessed my risk. At the age of 42 with only 13 years left until retirement, they recommend a 70% stock and 30% bond portfolio, which is certainly reasonable. My current 100% stock allocation in the TSP is because it is only a small percentage of my total net worth. They are obviously only looking at my TSP and not seeing the whole picture, which would be a downside to anyone with multiple retirement accounts:

 

Of course I wanted them to “Tell Me More…” and it showed this:

 

Again, this sounds reasonable. They just don’t realize I have a pension and how valuable that is – like a massive pile of bonds. Next…

 

What do I think of this? I think it is again very reasonable. They are recommending that I go 70% stocks and 30% bonds. In the bonds they are recommending intermediate term, which is a pretty standard recommendation.

When it comes to the stocks, they are recommending a 34% international allocation, which is again within the 20-50% realm of reasonable international stock allocations. I go with 40%, which is what Vanguard does with their target date retirement funds.

As for the division among US stocks between large and mid-cap, I’m am at about 70% large and 30% mid to small-cap. They want me at 61% large and 39% small to mid. Again, we’re in the same ballpark.

Blooom, Tell Me More…

 

And finally we see the last step of their free analysis, which totals up all the ways they think they can improve my TSP:

 

Whoa, those are some pretty big numbers! I must be screwing up my TSP big time.

Wait, let’s click on the little “i” next to each of those dollar amounts and see what they reveal:

 

What do I think of all this? As discussed above, they really can’t reduce my fees.

Can they save me $217,396? Will it really cost me $49/day if I don’t hire them? Reading the fine print, these savings are based on this paper from Vanguard and the assumption that I’ll demonstrate poor investor behavior.

You know, they might be right. While I don’t think I’ll behave badly as an investor, that is probably what everyone thinks. Most of us probably behave pretty damn badly when the market tanks.

I’m not sure they’d save me that much, but who knows. They might be right.

 

The Blooom Bottom Line

I’m not going to hire Blooom because I do my own financial planning, but I think their service is low cost and provides sound advice. Anyone who wants to use a financial advisor could probably pay way more than $10/month for advice.

While I think you could get the same effect by reading this post right here, checking out Blooom is worthwhile. At a minimum, I’d take advantage of their free analysis to get a 2nd opinion on how you’re doing with your TSP account or other retirement accounts.

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