Q. My co-worker told me she moved all of her funds to the G Fund. She has 16 years in service and is 45 years old. How will she know when it is time to move these funds back into more aggressive funds? I was giving this some thought for myself but did not know how to decide when would be the right time to move these funds back to more aggressive funds. I’m staying put for now since I don’t plan on taking anything out for another 10 years or more. A. You should ask her this question. Portfolio management is…
Browsing: G fund
Q. In answering this question, assume a heavy investment in the G Fund. If the nation’s debt ceiling is not raised and a debt crisis follows, can we assume that Thrift Savings Plan participants can move out of the G Fund and back to stocks without any restrictions? In other words, while recognizing that the G Fund will be made “whole” eventually, will there be an artificial time delay or other restriction before a TSP participant can move from G to a more balanced position? A. We’ll have to see what happens if and when the time comes.
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. If the government doesn’t raise the debt ceiling, what does that mean in practical terms for the TSP G Fund, and for government bonds and securities, in general? The G Fund is backed by the good faith and credit of the government, but if the government doesn’t have the ability to pay its debts, even for a short time, does that mean that the G Fund could have a zero return for that period? A. Interest rates could rise and bond values could fall. Higher interest rates are generally bad for the F Fund and good for the G…
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. I took the Voluntary Early Retirement Authority on Jan. 31 at my minimum retirement age. I had 26 years at the Postal Service under FERS. After 16 years of marriage, I became a widow. The only income I have is my annuity and the special retirement supplement from the Office of Personnel Management. Will I be eligible to receive Social Security benefits from husband at 60, and will they end at 62? When I turn 62, my supplement will end. I have $190,000 in the L2020 fund. Would it be beneficial to me to start receiving money from my…
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…
Q. Do you feel it would be wise to transfer my Thrift Savings Plan funds from the L2030 to the G Fund during this government shutdown? Isn’t money in the G Fund more secure, while the L2030 is prone fluctuations in the market? Is the market likely to take a big hit during the shutdown? My balance is $109,000, all in the L2030, and I still have about 20 years until retirement but may not stay federal the whole time. A. If you want to try to time the market, you’re on your own. The safest and smartest thing to do is to…
Q. Could you tell me how the G Fund did during the last three big market crashes? A. The G Fund’s value increases (and has increased) every month. It is not affected by market fluctuations.