Q. I’m 27 and contribute 5 percent of my income to the Thrift Savings Plan, which I have in the C and I funds. I’m considering opening a Roth IRA, as well as investing in an aggressive growth mutual fund. Would I be better off just increasing my TSP contributions? A. If you insist on long-shot betting — making bets that are more likely to lose than to win — you’ll have to go outside TSP. If you want an aggressive investment that maximizes your risk-adjusted expected returns, try the TSP’s S Fund.
Browsing: C Fund
Q. Can you recommend some funds where a retiree could put his money if he is not a federal worker? A. Except for the G Fund, which is a cash equivalent that can’t be matched outside the Thrift Savings Plan (use a money market fund or equivalent interest bearing security with no risk of loss), the other four TSP funds are based on widely available indices. The C Fund is based on the S&P 500 Index, the S Fund on the Dow Jones U.S. Completion Total Stock Market Index, The I Fund on the Morgan Stanley Capital Europe, Australasia, Far…
Q. TSP explains in its brochure that dividends are already incorporated into the share price. This seems illogical to me, as I believe the definition of a dividend is a cash payout of a certain stock share price at a certain time of the year. Does the Thrift Savings Plan definition mean that the share price of the S, C or I Fund is artificially inflated? A. No, it means the dividends that are paid by the stocks owned by the funds are retained by the fund and increase the net asset value of the fund. The share price reflects…
Q. I am planning on retiring from the Federal Employees Retirement System in five years at my minimum retirement age. I consider myself a long-term buy-and-hold investor and have accumulated the following assets from regular investing at opportunistic times over 25 years: TSP ($250K) + max annual contributions in C fund, USAA Strategic Advisor Fund ($100K) and International Fund ($150K), First Command Roth IRA Destiny Fund ($150K), CDs and Money Market ($250K), Gold Fund ($50K). Is there any advice you could give me to shift my assets to best protect my investments for that five-year mark? I feel I am pretty…
Q: Have you noticed that the C Fund is consistently up on the dates that the bi-weekly purchases are made for employee accounts? The attached table shows the closing price of the S&P 500 for each date in 2011, with TSP purchase dates in yellow. As you can see, a large number of the purchase dates occured on big up days and none of the purchase dates occured on big down days. The result of this is that participants receive less shares than they would if the purchases were distributed over each trading day of the period. To prove this…
Q: I am 51 years old and will not be able to retire from federal service until I am 65. I have 100 percent of my TSP account invested in the C Fund. I would like to diversify my account to include slightly more risk, such as the International (I) fund. Are you able to provide me general stock market guidelines in which it is best to complete this action? A: As always, I recommend that you select the asset allocation scheme that meets your needs with the minimum of risk and then implement that allocation in your account as…
Q. In the March 7 issue of Federal Times, on page 20, there appears the PersonalAdvisor. Part of the feature shows a TSP Snapshot, which has the following entry: Individual funds C Fund March 3 $16.15 Year-to-date 6.18% Last 12 months 21.34% Question: Am I really receiving a 21.34 percent return for funds in the C Fund” for the last 12 months? I am able to get only 1 percent to 2 percent return on a CD for a year. The 21.34 percent just seems too good to be true! Am I misinterpreting what I see? A. The calculated rate…
Q: In the March 7th issue of Federal Times, on Page 20, there appears a TSP SNAPSHOT which has the following entry: Individual funds C Fund March 3 $16.15 Year-to-date 6.18% Last 12 months 21.34% Am I really receiving a 21.34 percent return for funds in the “C Fund” for the last 12 months? I am able to get only 1% to 2% return on a CD for a year. The 21.34 percent just seems too good to be true! Am I misinterpreting what I see? A: The calculated rate of return was correct. Remember that this rate of return…
Q: I truly do not know what I’m doing with my Thrift Savings Plan funds. I’ve been told to divesify them; what exactly does that mean? If you were to look at this breakdown (figures rounded slightly) and know that I won’t retire for 21 years, what recommendation(s) would you make? L 2040 Lifecycle Fund: 74.72 percent of total funds, $21,423; F Fund: 5.33 percent, $1,529; G Fund: 5.28 percent, $1,515; C Fund: 4.91 percent, $1,408; I Fund: 4,88 percent, $1,400; S Fund: 4.88 percent, $1,398. A: Consider the following growth allocation: 55 percent C Fund, 26 percent S Fund,…
Q: I am retiring next month and am not interested in assuming risk in my retirement funds at this time. Would be best to roll over Thrift Savings Plan funds into an Individual Retirement Account, or should I leave the money in the TSP? I currently have 50 percent of my money in the G Fund and 25 percent in the C and S Funds. A: Your interests will be best served by leaving your money in the TSP as long as possible.