TSP investing

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Q. I became a federal employee in August 2012. Until recently, I was only contributing three percent of my income, but I was recently promoted and am able to contribute five percent. I have approximately $10,000 in my TSP and would like to retire in about 27 years (at which point, I will be 67).

I’ve been contributing 95 percent to the 2040 plan and an additional five percent to the G Fund. Is this too conservative? The TSP is the only retirement account I have. Given the current market climate, what should my fund allocations be? My current salary is $63,722. I hope (and I do mean HOPE) to retire comfortably with about $1,000,000+.

A. Given the facts you’ve provided, I suggest that you consider allocating your entire TSP balance, including all new contributions, to the L-2050 Fund and ignore the current market climate. Of course, these decisions should ultimately be left to the person responsible for producing the results you’ll live with. It’s like asking which way to turn the wheel in a moving car. The best answer depends upon how the driver plans to get you where you are going.

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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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