Return to Article: Disappearing Dividends

By Karen Rutzick krutzick@govexec.com December 22, 2005
  • 14082

    This article is worthless. Every retirement fund reinvests dividends interest and gain taken into the investment medium. If the TSPer does not know that they should not be trying to make decisions concerning their funds and let the professionals do it. Hey guys, even in your IRAs the dividends and interest are usually reinvested or sit ideal because you do not know what to do with them.

    I do not want TSP spending my money to calculate and report every dividend, interest, capital gain or loss to report because they are just going to reinvest it anyway. The way you handle this is in the proportion you have in each fund -- rebalance your four funds when they get out of line with the proportions you have set. It is easy to do online and takes very little effort on your part!

    This article is a disservice to all and highlights TSP as if they were different. A better service this author could provide is to explain why TSP has the same administrative expense charged to the G fund where there is almost no thought or action by TSP is the same as for the C fund where TSP has to decide what to buy and sell, when and how much for each. Also, the cost of a loan is far too low and we are subsidizing the borrowers. Increase loan changes to at least $300 to cover the costs of setting up the loan and servicing the loan over its life!

    TSP participant Posted January 6, 2006 7:17 AM
  • 14006

    Thanks for an informative article on how the TSP treats dividends. I've always thought it was done this way, but now I know. It's interesting that the TSP adjusts the share value of its funds to account for dividends and interest, but mutual funds pay out dividend and capital gain distributions which create taxable events for shareholders unless the funds are in tax advantaged accounts. Maybe this type of accounting could be a solution for mutual funds so that shareholders don't get slapped with distributions. Or would this take some type of ruling by the IRS?

    Leonard Norberg Posted December 23, 2005 10:24 AM

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Disappearing Dividends
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