Browsing: F Fund

Stock risk

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Q. I retired nine months ago after 35 years of federal service. I am a CSRS annuitant. I am unsure of the best avenue to take regarding the opportunity to withdraw all or some  of my TSP when I am 59-1/2 (I will be 56 in August). Like any investor, I am worried about the repeat of the 2008 stock market failure. I am considering withdrawing half of the balance and moving it into my money market account and converting the balance into a lifetime annuity.

Moving TSP funds

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Q. I plan to retire under FERS in December 2020 at age 66. All my investment is in the G Fund, $350,000, as are my allocations at 100 percent. I was advised to move 60 percent to the C fund and 40 percent to the F fund ASAP with the same allocations. I consider this a risky and aggressive move considering my situation, the economy, and that the S&P is overdue for at least a 20 percent correction by the end of this year. What do the experts advise.

F fund fluctuations

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Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:””; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”,”serif”;} Q. I have approx. $270,000 in my TSP account, all in the F fund. When the AGG is up .01, I lose about $100. Why? Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:””; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”,”serif”;} A. I suspect you are either seeing the effect of lag…

Risk efficiency

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Q. I saw you use the term risk efficiency in a recent response, and it made me curious. I have a nice little amount in the Thrift Savings Plan now. I don’t think I will be needing it in the future, except to hand down to future heirs, and so have tried to maintain a 70 percent stocks (35 percent C, 15 percent S and 20 percent I), 15 percent F, 15 percent G ratio. I read in a financial magazine (sometime around 2009) that a 70/30 ratio of stocks to bonds and/or cash reduced the risk considerably over a…

F Fund

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Q. It seems everywhere a person reads, the “expert” advice is to get out of bonds. It’s likely that interest rates will climb soon (they certainly will not go lower), the world is awash in debt etc. Your advice is to substitute a portion of other funds in place of F. Given the predicted bond climate, why not reduce F Fund allocation to near zero? Is there some reason I’m missing for maintaining an allocation in F above low single digit percentages or perhaps no F fund allocation at all? In other words, if the F Fund is about to…

G Fund

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Q. In your recent column “4 keys to TSP success,” you mentioned, regarding asset allocation, to “diversify your holdings among cash, stocks and bonds to hedge the risk lower.” I agree with this approach wholeheartedly, but ask where in the TSP to keep “cash”? There is no money market option, just the L funds (which I don’t use, preferring to personally allocate my investments), and the G, F, C, S and I funds. By the way, I took everything out of the G Fund and ceased all future allocations to it when there was a proposal by our leaders last…

F Fund and G Fund

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Q. I recently decided to shift the corporate bond portion of my overall portfolio into my retirement accounts (i.e., shift my retirement account holdings largely into corporate bonds, and shift my taxable account holdings away from them) since the income from bonds is taxed at a higher rate than income from equities. Since the Thrift Savings Plan is about one-third of my retirement account money, I took a closer look at the F Fund and I was shocked to see that the majority of the Barclays Capital U.S. Aggregate Bond Index that the F Fund tracks is treasuries. I think…

Moving balances between TSP funds to avoid market downturns

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Q. Does the Thrift Savings Plan allow one to shift all of his C Fund balance to the F Fund to wait out an expected downturn in the S&P 500? I know one generally should not try to guess the market, but if one could stay ahead of downturns and upturns (in theory), would it be more profitable over the long term (10 to 20 years) to shift out of C to F temporarily rather than suffering through market downturns (as in 2001-02 and 2008)? I guess it’s like selling high and buying back in low, assuming one’s timing was…

TSP withdrawals and investments

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Q. I am a civilian FERS employee who will retire this summer at age 59 with 35 years of civil service.  After retiring, I intend to start monthly withdrawals from my Thrift Savings Plan account ($2,000 per month). Even though I will have begun making monthly withdrawals from my TSP account, can the remainder of my money in the TSP continue to be invested in the various funds (G, C, F, S, I) and continue to grow via earnings within these funds? A. Yes.

F Fund

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Q. I purchased the Thrift Savings Plan F Fund in September 2012 and, by Dec. 31, it had risen from 15.84 to 16.01, basically matching my expected returns. However, in 2013, it lost 1.63 percent of its value. It had never lost before in the 10-year listings of annual returns. How is it possible the lose money? Interest rates have been low for many years now and any 1- to 3-year bonds would have reflected these record low interest rates at bond purchase time. Why is the fund losing? A. When market interest rates rise, the value of existing bonds falls. If the…

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