Q. I’ve taken note of your leanings toward the TSP over external funds. It seems it is the G Fund that you are particularly fond of. Can you tell me the advantages of the G Fund?
Browsing: Investing
Did you know that a war is being waged over your TSP account? Well, it’s true. Actually, this war is being fought over all employer-sponsored retirement plan accounts. Since the TSP is the largest such plan in the United States, I think it’s fair to single it out as the object of this war – at least for the purpose of this column. My purpose aside, I am pretty confident that, given the size of the TSP, and the profits that it could generate if its contents were turned over to the retail investment industry, this war would be waged…
Dollar cost averaging is the term used by the investment industry to describe the effect of making a number of securities purchases over a period of time. The idea is that, if you buy 100 shares of something, say a particular stock, in 10 installments of 10 shares each over 10 months, for example, your cost for the 100 shares you wind up owning in the end will be the average price you paid for all of the shares. This seems pretty simple, and it is. Actually, this is always the case: the average cost per share of…
Market volatility refers to the extent to which the market price, or value, of investment assets change over a particular period of time. For my purpose here, it refers to the extent of change in share prices, and position values, of the TSP’s investment funds. The wider the range of price, or value, from high to low, during a given period of time, the greater the volatility. In general, the G Fund should be the least volatile of the TSP’s funds, and the S Fund should be the most volatile of the lot. Between them, in order from most to…
Q. I just read in Federal Times online that the TSP G Fund might be cut out completely. I am 100 percent invested in it. I have about 6-7 years until I retire. I have $68,000 in it currently. I cannot afford for that to be taken away from me. What happens to my money if Congress gets rid of it? Do I lose all my money?
Q. How do I find a financial or retirement planner who is truly familiar with the nuances and quirks of TSP and federal retirement benefits? I hear of people being given bad advice because their advisers didn’t know the rules/options that are unique for federal employees. Can you recommend a few questions that can be used to test someone’s knowledge of federal retirement planning?
Q. I am a federal employee and have been eligible to retire for a while, but I wasn’t ready until now. Within nine months I will have retired. I am one that converted way back when from CSRS to FERS. I am 67 and a half years old (already drawing my SSA, which I started at 65 when I reached 100 percent) and will be 68 and a half years old when I retire. Within 2 years after retiring, I will be required to start taking my minimum withdrawals. Several things: I am concerned with the recent money market fluctuations and…
Q. I am under FERS and 43 years old. I have been working for the government for the last six years at the GS-13 level and plan to retire after age 71 after 34 years of service. I currently contribute the maximum to traditional TSP and have $370,000 in TSP (about 90 percent invested in C, S and I funds, and 10 percent invested in F and G funds). Even if I switch to a Roth TSP, I can still contribute the maximum allowed each year including the maximum catch-up contributions allowed. Under these circumstances, wouldn’t it be beneficial to switch to Roth TSP? I…
Q. I’m a federal employee within about 5 years of retirement and am wondering about whether to revise the distribution of funds in the L 2020 fund in which I’m now invested ($127,000 balance). I was just told the rate of return in the G fund (to which the L 2020 fund currently allocates 44 percent) is quite poor and that I should consider reallocating funds out of the G fund — perhaps concentrating on the C, S and I funds. However, I’m aware of the need to invest conservatively with this short time horizon. Under these circumstances, would you advise…
Q. I am 61 years old and single. I have about $146,000 in TSP and $183,000 in another retirement account, which is managed by my financial planner. I plan to work another 5-6 years. Would a Roth IRA be something I should consider? Or would it be wiser to just continue on in the regular tax-deferred TSP? I am still paying my mortgage but will have the rest of my debt paid off by the end of the year. A. Of course you should consider it — and all other reasonable options available to you, but that doesn’t mean you should…