The Do-It-Yourself Thrift Savings Plan

OK, so maybe there are no matching contributions. And there's no retail-fund equivalent of the "G" fund, which yields more than cash but guarantees principal stability, either.

But investors who are attracted to the simplicity and low costs of the Thrift Savings Plan for U.S. government workers--but who don't happen to work for the U.S. government--can get pretty close to putting together a TSP-like plan on their own, whether in an IRA, taxable brokerage account, or via the brokerage window at their own company retirement plans. After all, the TSP funds are almost all index-based portfolios that are easily replicated in traditional mutual fund or exchange-traded fund format. While retail investors won't be able to match the TSP offerings' ultralow expense ratios of just 0.029%, competition among index-fund and ETF providers means they can get pretty close.

The missing link, alas, is the G fund, which has no analog for investors who are investing outside of the confines of a 401(k) or other retirement plan. While stable-value funds are the closest approximation, their risks, while small, are greater than the G fund, which guarantees principal stability. And stable-value funds can only be held inside of a company retirement plan--not inside an IRA or taxable brokerage account. While the G fund looks underwhelming on a near-term basis, its attractions are apt to be more apparent in a rising-interest-rate environment.

G fund aside, here are the key building blocks for a "build-your-own" TSP plan; TSP investors who would like to model out their portfolios' exposures using online portfolio tools like the ones found on Morningstar.com can also use the funds and ETFs listed below to stand in as proxies for their actual TSP holdings. To get as close to the TSP's skinny expense ratios as possible, I've highlighted some higher-minimum share classes, usually $10,000. Where appropriate, I've also included some worthwhile variations on the funds in the TSP lineup.

C Fund: U.S. Large-Cap Stocks What It Tracks: The S&P 500, consisting of 500 of the largest U.S. companies

Mutual Fund Analogs (Expense Ratios):

Exchange-Traded Fund Analogs (Expense Ratios):

Vanguard S&P 500 ETF VOO (0.05%)

Variations:

Holding an S&P 500 fund separately from a small-/mid-cap offering, as is the setup with the TSP, can make sense from a few vantage points. Employing the distinct small-/mid- and large-cap portfolios facilitates rebalancing; it also allows investors who are inclined to over- or underweight small- and mid-cap stocks, either strategically or tactically, to do so. But investors who are aiming for simplicity might instead use a total-market index fund to cover the total stock market;

S Fund: U.S. Small-/Mid-Cap Stocks What It Tracks: The Dow Jones U.S. Completion Total Stock Market Index, which holds virtually every liquid U.S. stock except those in the S&P 500

Mutual Fund Analog (Expense Ratio):

Fidelity Spartan Extended Market Index Advantage FSEVX (0.07%)

Exchange-Traded Fund Analog (Expense Ratio):

Variations: See above. Rather than employing separate funds for large caps and small-/mid-caps, investors who are aiming to simplify might consider a total-stock-market index fund to provide exposure to the entire U.S. market.

I Fund: Developed-Foreign-Markets Exposure What It Tracks: The MSCI EAFE Index, which provides exposure to large- and mid-cap stocks domiciled in developed Europe, Asia, and Australia

Mutual Fund Analogs (Expense Ratios):

Exchange-Traded Fund Analogs (Expense Ratios):

iShares Core MSCI EAFE IEFA (0.12%),

Variations:

As I noted in my earlier article about the TSP, emerging markets are possibly the most significant area omitted from the plan; developing-markets stocks take up about 9% of the total world stock market, currently. Investors who would like more-encompassing foreign-stock exposure should consider

F Fund: U.S. Bonds What It Tracks: The Barclays U.S. Aggregate Bond Index, which encompasses the total investment-grade, U.S. dollar-denominated, fixed-rate bond market.

Mutual Fund Analog (Expense Ratio):

Exchange-Traded Fund Analogs (Expense Ratios):

Variations: It's hard to argue with the very low costs of the Barclays U.S. Aggregate index trackers named above. However, investors who want more-encompassing U.S. market exposure might consider iShares Core Total USD Bond Market IUSB. As analyst Thomas Boccellari notes in this article, the fund includes the constituents of the Aggregate Index, as well as high-yield corporate bonds, eurodollar, U.S. dollar-denominated, and U.S.-listed emerging-markets bonds, among other bond types. The inclusion of those additional securities makes the ETF less government-bond-heavy than the Aggregate Index and, therefore, higher yielding; however, the two indexes' returns have been highly correlated over time.

G Fund: Higher-Yielding Cash Substitute What It Tracks: The G fund invests in a nonmarketable short-term Treasury security that is issued to the TSP. It guarantees principal stability, like cash, while historically providing a yield in line with intermediate-term Treasury bonds.

Mutual Fund Analog: There are no perfect mutual fund analogs for the G fund. Cash instruments ensure principal stability but with a lower yield than the G fund offers; bond funds may offer similar yields but no guarantee of principal stability.

Exchange-Traded Fund Analog: None. (See above.)

Variations: Stable-value funds are the closest approximation to the G fund. They invest in bonds and, therefore, pay out higher yields than cash, and they enter into insurance contracts to provide principal stability. However, they're not quite as safe as true cash instruments--or the G fund--for reasons outlined in this article. And in any case, stable-value funds are not available outside of retirement plans; you can't buy one for your IRA or taxable brokerage account, for example.