Q. I’ve been with the federal government going on 27 years and am a FERS employee. I don’t have much in my Thrift Savings Plan — barely over $30,000. Shouldn’t I have more? Due to my grade level, I can only contribute 1 percent, maybe 2 percent. How should I distribute the percentage to get the most out of it? Should I put in 50 percent into the G Fund, 10 percent into the F Fund, 10 percent into the C Fund and so on? Where should my percentage go that will give me the best return on my investment?…
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Q. I recently retired (CSRS, law enforcement) and am trying to decide whether to leave my money in the Thrift Savings Plan or roll it over into a privately managed IRA portfolio including diverse programs that will meet my goals of growth, income, annuities and a certain amount of liquidity. If my TSP portfolio is diversified to meet the above goals, if you compare apples to apples, is the TSP considered better or worse (value performance, management, fees) than rolling into a privately managed portfolio (with a broker I trust). A. TSP is the best retirement investment vehicle there is.…
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 have 21 years of federal service including four years of military time. The redeposit is about $6,500. I will be eligible for Social Security at 62, and the reduction to my annuity will be about $250 a month. In your opinion, would it be advisable to take this money from my Thrift Savings Plan account to pay the redeposit? The break-even point is about 2½ years. What factors should I take into account? A. The answer depends upon what retirement system you’re under, whether or not you have dependents who will be relying on a survivor annuity, your tax…
Q. I will retire soon and have access to a nice sum of cash that I want to invest. Does it make sense to use the Voluntary Contributions Program to a Roth vehicle to invest all or part of this money? A. Yes, as long as you can put the money away in the Roth for the required holding period.
Q. I am a CSRS employee with less than eight years left until retirement with a Thrift Savings Plan balance of over $200,000. Should I move all of my money to a “safe” fund for the next six months or so until this fiscal cliff mess is cleared up? Looking not to lose money this time, so which fund is the smartest to move my TSP funds to? A. When was the last time it seemed safe to invest? There’s no such time. That’s the problem with timing out of the markets: You then have to time back in or…
Q. You state that we should invest in the Thrift Savings Program based on goals for retirement. My goal is to have $1 million in my TSP account by the time I retire; $1.5 million to $2 million would be even better. My TSP account has about $350,000. What can I do to grow my TSP to $1.5M to $2M over the next 10 to 15 years, given that I will max out the contributions (TSP $17,500 and TSP catch-up $5,500) every year until then? A. There is no way to answer this since you’ve provided a very wide range…
Q. In an April 2011 answer to a question about the lifecycle funds, you noted that the Thrift Savings Plan suggests choosing the L Fund that most closely matches your retirement date and putting 100 percent of your money there. You said you recommend investing in the L Fund that most closely matches your life expectancy rather than your retirement date. Why? Isn’t this going to put your money at risk when you’re older and can least afford to be risky with your money? A. This is my default recommendation, and it recognizes the fact that, in most cases, your financial…
Q. My husband was a temporary federal employee for the Defense Department for five years. He was laid off in August. He had two years of military service, which he bought that time back, so in essence he has seven years of federal service. He is 60 years old. He put 10 percent of his salary in the Thrift Savings Plan. Should he leave that money in TSP or put it in another vehicle? Also, when he reaches retirement age (62), will he receive a pension for the seven years of federal service? He left DoD with a sick leave…
Q. I’ve worked for the Food and Drug Administration for 18 years. I started investing in the Thrift Savings Plan about 10 years ago and don’t plan on retiring until 2030. I’m investing 15 percent right now, and I plan on doing more. I’ve been advised to invest in the L Funds. But lately I’ve been looking at the F, C, S and I funds, which are doing so much better than the L. I want to switch to the one that’s earning the most. Isn’t the L fund for those who are ready to retire within a couple of years? I’m…