Sizing Up Uncle Sam's 401(k)

The Thrift Savings Plan, offered to federal employees, contains features other workers would kill for. But it also has glaring weaknesses.

Government officials spend a lot of time telling private employers how they may and may not run their employee retirement-savings plans. Turnabout is fair play, so I decided to take a look at what Uncle Sam offers in the defined-contribution pension plan for federal employees.

The Thrift Savings Plan (TSP), as it’s known, has several strong elements. It’s the lowest-cost plan I know of. And its simplicity makes it easy for employees to use. If a private employer's plan doesn't offer simplicity and low prices, employees ought to complain -- unless they're afraid of retaliation. But the TSP also has some major failings.

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Steven Goldberg
Contributing Columnist,
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or