S Fund will continue to greatly outpace C Fund? Anyone in an L fund would have their allocations automatically re-balanced. I told those TSP police to trust me on this. Be sure to check out both youtube videos embedded into the article. Different approach, sure Ill take that but horrible, not at all. I reveal secrets here that nobody else knows. Its in about 50% treasuries and bonds. Sounds good to me. This strategy has worked very well for me I dont know, perhaps it was just good timing or I just got lucky but there is no doubt, the moves paid off. Its a very natural reaction with the fear of things dropping much further. States Government, The Federal Retirement Thrift Investment Board or the Thrift I do think theyre a fantastic investment for anyone whos not too actively involved in managing his/her TSP though. So this might not make any since what so ever, but this is what I did. If you were in that position, what would you do? With the current market, Id like to mix it up and maximize the little that I have. They ask, "What is the best TSP allocation"? Do I have a higher or lower risk tolerance than other investors in my age group? You just have to decide how much of your money you want invested in funds that will go up and down a lot (C, S, I), and how much you want in safer funds (G and F). Donald Trump That sometimes happens at companies like merrill lynch. Moving forward, I am putting 70% into the G fund and 15% each into the C and S fund as I would like to get some growth for the next two years while I am still working and after I leave the postal service I will change that probably to 90% in G and 5% each in C and S. For every $10,000 you have invested in the TSP, you will only pay $5 a year in management fees. Bonds and treasury bills are safe. You can also create your own portfolio with less G and I fund in it if you can handle more volatility. In other words keeping C/S account balances at a 50/50 mix. Because if it is, it will be very difficult to make sure your TSP lasts as long as you do. Great stuff Rich. This is actually an important consideration when equating this I fund with some of the TSP investment strategies I have listed later in this post. July is Best Month for TSP Performance Since Trump Administration: One Fund Up 10.32% TSP performance in July was a bright spot in a dismal year for TSP fund returns. Thats getting in the weeds for me. With all this chaos going on with the CVD-19 I see that I had a 10K loss over this past month. 2023 TSP Contribution Limits | The Thrift Savings Plan (TSP) If both increasing and decreasing interest rates can cause the F fund to lose value, what economic factors should someone be looking at to feel like this may be a time to increase or decrease their F fund allotment? It hasnt done well, thats true. Rich, thanks sharing these investment strategies. Im feeling another 2007/2008 market crash coming in the next couple of years. There are no TSP withdrawal fees. I made a huge mistake and got scared by the election and moved all my funds from C/S/I: 70-20-10 into G and I am regretting not sticking the course. Go into the mypay system (thats what its called in the Air Force) and update it. Rich, is there anyway to determine how dividends are distributed? Congratulations on having enough in your account! the personal rate of return is very nice (about 40%). Heres the advice you need. I made a separate video about this which is deep in the weeds, but I will explain it quickly right now. Rich Ill keep an eye out for those videos too. But I think there is a disconnect in what you may have taken out of my post. I dont understand the love for the I fundit and the S fund came in at the same time and the S fund has been vastly superior over that time. Also, next time there is a drop in the market, hell think hes good at predicting these, and sell again. Put the most money you can into TSP and IRA each month until you retire. July Is Best Month For TSP Performance Since Trump - FedSmith I certainly hope that investing-education is offered and encouraged among the rank and file (?). Only two things are required: Time and a good investment strategy. I think 10% is a small risk that I feel comfortable to invest. If one where to actually look close at it and break it down, my TSP invest heavily into C&S Both through the Life Cycle fund and the 25/25 C/S split. Currently I have 3 years of federal service, however I will plan to retire in 5 years at 62. Inflation? Over the long run, however, confident youll be ahead. Either way, is 100%S fund a bad idea at this point of my career? What was I right about? I am super new and want to maximize the future boom of the reinstating market. It is not the same as some international funds out there that have a sampling of small companies from countries all over the world. If you cant survive a downturn because you are going to need to withdraw soon, that is when you need to add in some bonds to soften the ride. I know you say stick to a plan and dont let world events influence our choices. Or bad? Its not exactly, but it gives you an idea. I hope the New Year is treating you well, Rich, and I look forward to many more engaging posts from your blog! There is enough international exposure between C and S IMHO. Inflation This article encouraged me to take a look at my account distribution. This is for someone with a long (6 years or longer time horizon). I bet itll turn out well. I re-balanced in Jan and now Im about 55/45 as of today 19 Mar, which is about double of what I like my swing to be. There is potential it could keep going down, maybe a lot more. What you can change in your TSP portfolio year to year is your exposure to risk. This fund follows the Bloomberg Barclays U.S. MSPB This is an awesome synopsis of the funds and how to mimic some of the Vanguard funds people love in the FIRE community at large. Sign up for our Free Newsletter to access the best investment information money can't buy. someone retiring in the next decade could go with the 2040 fund instead of the 2030. And while I will point out that the S&P had performed at 14.48% over the past 10 years, my account value would have suffered if I had just exclusively bought into it. 2024 Will Witness More Roth Account Activity in the Thrift Savings Plan . Look up the fees on everything you own at Merrill Lynch. And yes, most people should be more conservative in retirement but not near as conservative as you would think. The G Fund is now the biggest amongst the five core TSP funds. The L funds, which stands for Lifecycle funds, use professionally determined investment mixes. Management fees are one of my major concerns when investing and TSP used to be the gold standard. He also has a plan to throw bonds into the mix to smooth out the ride a little bit, which is a common investment strategy. He explains that most notably what is missing from the TSP funds is value funds, which is a key component of his strategy to boost typical index fund returns. The target funds are decent for this. An employer Roth 401K you can but not an IRA. Q3: When Retiring what is the Best way to Draw from TSP so you wont exhaust it before you Kill over? Appreciate a vector check, Im reading all I can to make sure I take advantage of my best advantage time.. Im not even max on contributionswill do that soon, coming out of a big hole, and I plan on doing catch up soon because Im over 50. I am not sure if you would charge me for a few questions. The F fund, and even the rational on TSP websites (see below) for the F fund, confuse me. My point: Over the long run, NOT timing the market is going to win out every time! I could be easily be wrong. This portfolio mix is a TSP investment strategy modeled loosely after the Vanguard Total World Stock Index Fund (VTWSX). My payroll contributions are allocated as follows: 60%/10%/30% to the C, F, and G funds, respectively. A 50 year old would be 120 minus 50, 70% invested in stocks. NEXT UPDATE: August 1st, 2023. Heres the problem. In 2019, returns for the fund were 31.45 percent. I currently invest in F,C, S and I funds. Like you, Im not invested in an L fund. I just wish I had done this many years ago. If you want to take a risk and try something different you can try my method for a few months to a year and the recheck to see where you want you highest percentage going. This is an awesome comparison of different strategies that is just the thing I was looking for as I attempt to invest more aggressively for the long term while stock prices are low. As of Q2 2023, there are over 88,000 TSP accounts with over a million-dollar account balance, and well over . You have successfully and amazingly aggregated a bunch of amazing information with really thoughtful and personal analysis by yourself. TSP Im going to cut and paste from another comment I just answered 1 minute ago. Rich, are there mutual funds that mimic the same share process the C & S funds? https://the-military-guide.com/gi-bill-terrible-thing-waste/. Ive never been smart enough to do that accurately, but neither is anyone else. Election I rolled everything from the L2030 into the L2040 at its inception price and effectively more than doubled my shares instantly. I am about four years from retirement and wondering what adjustments might be prudent. My current portfolio is $80k (53k TSP + 27k WA state PERS) soon and in 2021, my goal is to max my TSP contribution. Im not a financial advisor, so I cant give out specific advice to your situation. Rich, Hey Rich! Im not sure if youre familiar with Doug Nordman and the-military-guide, but its got some great articles for helping military members and vets. I am subject to a mandatory retirement in 35 months at age 57. I just really like buy-low-sell-high and cant think of a better way now that DCA is no longer an option for me with my TSP. I think you quickly disagreed before first understanding that the multiplying of shares through buying Lcycle funds at their inception price < that is the absolute key for my accounts overall performance and for the very large spikes in increased growth/value in short periods of time. I am curious why you like the 50/50 vs an 80/20 (that better reflects the total stock market). Yes, it does make sense to me. The S & P (C fund) dividends are 3 times those of the Extended Market (S fund). Now Im well spread in the C,S, & I funds while also in the L Funds. This makes no sense to me. Can you still double your TSP? What are your thoughts. TSP Investment Recommendations 2016. I just have too much love and altruism in my heart (and no one reads this blog). At the end of December 2021, the C Fund had 40.3% of the TSP assets totaling $326.8 billion. Love your blog! Also, watch both videos that are embedded in the article. But for your sake, I sure hope that isnt true for you. The allocations I listed above all come from the main post. Im with you on that advice. Best move I did was invest in tsp. Even at retirement, most people still have 20-40 years of life/investing in front of them. 10% in the I Fund. The only other thing I would add (because you are in the 10 year window that Rich talks about further above) is to consider G fund (for a portion) if you are risk intolerant. How to invest in the TSP for 2023 with the best TSP allocation was largely influenced by a White Coat Investor post I fell in love with a long time ago. This is tough to answer quickly in an email. Individual Funds | The Thrift Savings Plan (TSP) Interest rate risk: an increase in interest rates may lead to a decrease in the price of the bonds in the portfolio. check that out! Can you still double your balance? I keep it simple. Hello Rich, The returns on this fund are historically slightly higher and slightly more volatile than the G fund. These aggressive funds are going to be the key to doubling your TSP overtime. Checking your net worth often is a bad idea, right? Locality Pay In the meantime, thanks for giving me the confidence to keep the remaining 100% in the C Fund until I retire. I been retired for 10 years from U.S.P.S. the fed trader returns. It reminds you to make smart financial decisions. Congrats and happy retirement!! Getting full agency matching seems a given but beyond that? Over the last 10 years, TSP Coach has proven it is the best The table below compares TSP Coach returns to all the major TSP allocation plans minus fees. I like C and S for the long term. I just passed 59.5 years of age so I pulled the bulk of my TSP out and am utilizing it for some other investments. I look forward to reading more of your content. Im so confused reading so many articles. The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. In my head its turning further profits moving from conservative back to aggresive investing. @Rich, thanks for that update on management fees. TSP F fund Seasonal Pattern. From that day forward, I decided S&P 500 would be the way I invest. It might be really low because its about to shoot up again. I Just started reading these articles within the past year. But honestly I am just realizing I lack one specific area and I am trying to become smarter, on the % portion of allocations. put a gun to my head and are making me put this disclaimer on all my TSP posts. Over the years I have maxed out a vanguard Roth IRA and used that to invest in market segments underserved by the TSP like Emerging Markets, REITs, Inflation-Protected Securities, Foreign Bonds, etc. Im dont plan on touching it too soon after retirement. would it be wise at this time to sell some of the I and bring it down to 10%, and maybe bump up C or even go the Warren buffet way and put some into F? I use the market performance to determine how much more to invest from there. He did not like the L funds. As horrible as my strategy may sound to you, my accounts have averaged 10.79% over the past 10 years. CSRS I used to have international sprinkled in there at 10%, but I gave up on it. What it Takes to Be a TSP Millionaire in Today's Dollars. So if you are currently investing 5%, go ahead and bump it to 10%. 15% into Roth TSP. You should always be asking yourself how you would feel if the market were to lose 50%. My total overall value has nearly recovered 100% from the March/April stock market downturn (lost around $100K on paper) and its currently back to nearly the same value as it was in January ($825K). Im embarrassed to say Ive been with Fed govt for 7 years but have only been in G fund with 1% so basically really have nothing to show for. ..or just no PENALTY for an early withdrawal? I probably would have had more in there than what I do, but I do not like mine in G. If you want to no loose money, but not make money, G would be the way to go. Share prices for C have gone up $5 a share, should I switch it all back now or wait? These wont change. The mutual fund industry average is around 1%, or $100 per $10,000 invested. It sounds to me like you could use the L2025 fund.