Q. A sad tale: I am 64 and still working for the Defense Department. For most of my career, I have left my money in the G Fund except for some short periods where some of it was in the C Fund. I now have $430,000 in the G Fund but just can’t find it in myself to diversify although I see that I have lost a lot of money over the years this way. Can you recommend a relatively safe future strategy that won’t keep me awake at night? A. Find a trustworthy and affordable adviser to help you.
Browsing: allocation
Q. I have reverted back to a more conservative Thrift Savings Plan allocation: 67 percent G Fund/33 percent C Fund. I put in the maximum, including the maximum catch-up and, with match, it’s nearly $30,000 per year. My balance at 60 when I retire in five years should be between $500,000 and $600,000 depending on the return. I am estimating a 4 percent return. I am wondering about keeping this asset allocation and taking monthly payments starting near 4 percent or slightly higher at age 60. Is a distribution with 70/30 as indicated above a bad idea? I like the conservative allocation and…
Q. I’m 32 years old, have been contributing to the Thrift Savings Plan since 2005. I have 40 percent in my C Fund, 30 percent in S and 30 percent in I. Is this a good contribution allocation? I want to be as aggressive as possible, but I am also looking at moving most of my gains to the G Fund due to the fact the market may be headed in the same direction as 2009. If I want to protect my gains with the means of buying back at a lower price, what would be your recommendation be on…
Q. I want to know what you think of two services widely advertised to federal employees. One is the Thrift Savings Plan pilot that claims to help one allocate TSP contributions in good and bad financial times with extraordinary success, and the other is a full service company offering financial and estate planning called Federal Navigator. A. I won’t review the specific services you’ve mentioned, but I will make a couple of general comments: Read the disclaimers for any advisory service you’re considering. A newsletter is for informational purposes only, so the publishers won’t take responsibility for the results their…
Think you can accurately predict the future? It seems that many Thrift Savings Plan investors do. TSP-related message boards and online forums are filled with posts from participants who are obsessed with trying to position their accounts to either take advantage of, or defend against, this or that anticipated turn of events. In some cases, this is smart; in others, it’s not. In the case of rising interest rates, for example, the current environment makes higher future rates all but certain. This unusually high probability, along with the availability of an attractive substitute for bonds in this environment, make substituting…
Q. I’m 53 years old and plan to retire in 10 years. My current Thrift Savings Plan balance is $131,000, and I’m 100 percent allocated into the L2040 fund. I’m very aggressive in my investing. Should I allocate my TSP 60 percent C Fund, 20 percent S Fund and 20 percent I Fund instead of the L 2040 fund, which allocates in all of the funds to include the G and F funds? A. You’re the investment manager, so you’ll need to use your process for determining the correct allocation of your TSP funds. If I were responsible for the…
Q. What would happen to the Thrift Savings Plan investments, specifically the G, F and I funds, if the government can’t raise the nation’s debt ceiling before the Oct. 17 deadline for default? Are we looking at another financial meltdown like we had in 2008? A. The G Fund will hold its value. The other funds are vulnerable to loss in value. So far, however, the stock markets aren’t predicting disaster. They’re in good shape as of today – still near their multiyear highs. You should accept that predicting future market behavior is a risky thing to do. If your financial…
Q. I am 64 years old with 12 years of federal service. I plan to retire when I am 66. I have done well in the L funds except in 2008. I have 80 percent in the 2020 fund and 20 percent in the 2030 fund. Should I put all of this money in the G Fund until the current financial crisis is over? A. How you manage your account should depend upon your goals and circumstances, as well as a plan for future decision making. In general, market timing adds more risk to investment management than it avoids. It’s not part of my…
Q. I’m retired from the military after 28 years. I have been working for the Defense Department since March 2008 and have 17 percent going into the Thrift Savings Plan. As of right now, I have 71 percent in the C Fund and 29 percent going into the S Fund. Should I leave the contributions where they are during the government shutdown? I have friends advising me to move 70 percent to the F Fund and 30 percent to the G Fund. Not sure if that is the right move. A. Neither of these asset allocations is remotely risk efficient.…
Q. Should I move everything to the G Fund now that we are shut down and there is the possibility that the government could run out of money within the next few weeks, forcing an unprecedented default? A. That’s like telling me you’re driving and asking if you should hit the brakes! I don’t know where you’re going, when you need to be there, what you’re driving or how much gas you have in the tank. The person responsible for delivering you to your destination on time must make that decision based on their assessment of the situation and their…