F Fund


Q. I am 61 and have $200,000 in the Thrift Savings Plan. I’m in process of transferring another $240,000 from an outside discount brokerage firm to my TSP. I would like to transfer all of the $240,000 to the F Fund. With interest rates possibly remaining low for another few years, is this a good move? When interest rates rise, how much will the F fund shares decrease? The bonds it holds are short and intermediate, so I’m assuming it won’t lose as much as if it held long-term bonds, but I’m not clear on how much I could lose.

I’m trying to move from equities to bonds due to my age and plans for retirement, but still make some money.  The G Fund has been doing so poorly. What are the risks to the F Fund? I’ve been watching the F Fund now for a few years, expecting it to go down, but so far it’s doing pretty well.

A. With interest rates near zero, I don’t think a 100 percent allocation to the F Fund is a good idea. In fact, I can’t think of a situation when it would ever be a good idea. I suggest that you use the L Fund that most closely corresponds to your life expectancy, or find a trustworthy investment adviser to help you.


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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 fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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