Q. I am being considered for disability retirement in the coming months. My application is pending consideration from the Office of Personnel Management. I am a GS-14 FERS employee, 54 years old, with about 32 years of service. I have approximately $250,000 in the Thrift Savings Plan, and my allocations are as follows: 15 percent C, 15 percent S and 70 percent I. I realize that is somewhat aggressive, but it has been like that for about seven years or so, and I have been hopeful of the international home run. Regrettably, this hasn’t necessarily come to fruition. I will…
Browsing: allocation
Q. You have suggested that individuals invest their TSP funds in the life cycle fund most closely approximating their life expectancy. Would that still apply to a CSRS employee who does not anticipate accessing funds until age 70½? A. Yes, but keep in mind that this was my advice to those who are not sure what else to do.
Q. Many experts are indicating that there is a bond market bubble growing. In addition, The Wall Street Journal survey report indicates that interest rates will be going up about a point in 2014. For the next year or two, would it be best to move money out of the F Fund and place it in the G Fund, or move monies out of both funds and place them in market funds like C, S or I? Since both G and F are invested in bonds, will increasing interest rates affect invested funds negatively? A. I have been substituting G Fund…
Q. I would like to know a good allocation of my Thrift Savings Plan funds. I retired a year ago, and I am under CSRS. I have about $140,000 in the F Fund. I am 60 years old and do not need the money as of yet. I am looking for a fairly safe allocation within the funds for a 6 percent to 10 percent return. A. A good allocation will produce the maximum possible expected return in exchange for the level of risk it produces, and there are many such allocations. You should note, however, that there many more…
Q. I am 25 years old, and recently joined the government. It is difficult to fathom retirement at my age, but I understand that I can get ahead by taking time to address my financial planning needs now. I don’t really have solid retirement goals. Let’s imagine I will retire around 2050. My investments need to provide support beyond any retirement date. I understand the risks associated with investing in stocks vs. mutual funds. I also understand that I can take more risk at a younger age. And I am comfortable taking on risk. After all, we’re only talking about…
Q. I am interested in seeing if the Thrift Savings Plan can be managed on a bucket type of withdrawal strategy. I realize it would take an act of Congress to get the rules changed. Can you identify the member of Congress whose pet project is the TSP? A. No, but you can use a “bucket” strategy in the TSP now. Just allocate your account the way you’d like, take your withdrawal and then rebalance your account. The “bucket” strategy is just another way to look at an asset allocation strategy. Even if you use “buckets” for your money, there…
Q. I retired from active duty in December 2011. I accepted an appointment to a government service position in October 2011 and established a FERS Thrift Savings Plan account. I did not move any of my TSP account balance accumulated during my time on active duty into my FERS TSP account, so I currently have two accounts. Am I eligible to take out a loan against the TSP account balance still residing in my [previously] active-duty account? If not, can I transfer all or part of my [previously] active-duty account into my FERS TSP account with the goal of taking…
Q. I’ve worked for the Postal Service since 2001. There is $29,000 in my Thrift Savings Plan. I was on the 3 fund for all of those years. I would like to make some changes hoping to bring in more. I am 37 years old. I just changed it to 30 percent S and 70 percent G, but I am sure that is not good. Could you assist me? A. Why did you choose this inefficient allocation? If you’re not sure which allocation best suits your needs, try the L Fund with the maturity that most closely matches your life…
Q. What is the best location to place your funds in TSP during this debt ceiling fiasco? A. In a diversified allocation that support your retirement goals with a minimum of risk.
Q: I’ve just read your latest column, entitled “Odds Favor Gains in Market.” I have about $350,000 in my Thrift Savings Plan. Just before the major slide occurred in August 2008, I transferred all funds to the G Fund. I then shifted about 25 percent to the L2020 funds. I continued all new contributions in C, S and I Funds. I was lucky to the extent that I only lost about $20,000 due to the downturn. My problem was when to put the funds, which now represent 67 percent of my funds, back into the other less conservative funds. Obviously,…