Originally Posted by NuGuy

Even without adding in state income tax, you're looking at a 40% haircut for DPSP cash. To just get BACK to zero, it takes a 67% return. Average S&P returns over the past 20 years is about 8.5%, slightly higher over 40 years (not inflation adjusted). Let's be wild and assume the S&P returns 10% a year, which, honestly, will be on the high side. To recover the money you lost day 1, to get the 67% return, you would need 6 years just to get back to zero. And that's completely ignoring 1) The returns you have have gotten on the full amount and 2) Any capital gains you would have suffered on your S&P strategy.

And this isn't a day one math exercise. Every single year you're taking a 40% loss on your DPSP cash, which means that recovery is always rolling out 6 years in front of you. Time it wrong, and it could be much longer. And if you are in a high tax state, it's even worse. Yes, it's a conservative investment, but I assume everyone has those to at least a small degree, and it would allow you to shift whatever percentage that's there to a more aggressive plan. PLUS it would be in place if there are any future, unforeseen tax increases.