Shifting assets


Q. I am planning on retiring from the Federal Employees Retirement System in five years at my minimum retirement age. I consider myself a long-term buy-and-hold investor and have accumulated the following assets from regular investing at opportunistic times over 25 years: TSP ($250K) + max annual contributions in C fund, USAA Strategic Advisor Fund ($100K) and International Fund ($150K), First Command Roth IRA Destiny Fund ($150K), CDs and Money Market ($250K), Gold Fund ($50K). Is there any advice you could give me to shift my assets to best protect my investments for that five-year mark? I feel I am pretty diversified and would rather protect my investments and bring them together rather than having everything spread out and taking any more risk on the stock market.

A. How your money is invested and managed should depend upon the demands that will placed upon it. In general, I recommend that you set aside a liquidity fund and then invest the rest in the lowest-risk asset allocation strategy that will meet your needs. It’s impossible to know what that allocation is without some specific analysis, but it should be implemented using low-cost index funds such as the ones available in the Thrift Savings Plan. Adjusting the risk-return characteristics of your portfolio should be done by either shifting from one efficient asset allocation to another, increasing or decreasing the size of the cash reserves, or both. You’re making a mistake if you use managed mutual funds, individual stocks, or rely on market timing.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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