TSP fund allocation


Q. I have unfortunately neglected my Thrift Savings Plan since joining federal service in 2007. I started with the G Fund, stayed with it during the crash, and am still 100 percent in it today. I realize that was a huge mistake; the stock funds have done extremely well especially this past year. Would you recommend I dollar cost average in over the next six months or year? My instinct is to stop these low returns and get into the bond and stock funds and out of the G, but if the market takes a dive this summer, I will be very unhappy.

I have a 401(k) self-directed plan with one of the brokerages, with stocks, bond funds, cash, but I really have not been successful in managing it with individual stocks. I discussed possible asset management programs with Schwab and Vanguard. Do you think that, with their fees of 0.75 percent to 1 percent, that they can beat over time just transferring into my TSP? Do you have any suggestions about a service that helps me rebalance the allocations among the five funds over time, or change if there are economic concerns?

A. If you don’t know what to do, then I suggest that you stop fooling around, transfer as much of you money as possible into your TSP account and put it in the L Fund that most closely corresponds to your life expectancy. You’d be a fool to trust a broker or fund company with your financial decisions.


About Author

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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