Q. Our 22-year-old son is in the Navy. He is an E-5, so his earnings are fairly good. He is not married and has very few bills besides an apartment, vehicle and cellphone. He is contributing to the Thrift Savings Plan, but soon he will have option to contribute to the Roth TSP. I would like to know what your investment advice would be for him. A. He shouldn’t be as concerned about where he saves his money, as he is about how much he saves. The TSP, traditional or Roth, should be his first choice for retirement savings. If…
Browsing: L Fund
Q. I’ve been putting about $2,500 a year into the G and F funds. Should I continue to do that, or switch to an L Fund or perhaps a Roth? I’m 25 with four years of service in? A. Sorry, but we don’t give individual investment advice through this forum. Your asset allocation seems very conservative for your age, however.
Q. I began putting money in the L2030 in 2008 and didn’t really start to pay attention to it until mid-2011. When I noticed I had about $30,000 in it, I didn’t want to lose it to the current volatility. So I put it all in the G Fund and then the market started to increase. Does it make sense to go back to the L2030 since share price has increased $2.80 per share from when I left it, or is it better to wait until the price is closer to when I left it? I think I will just…
Q: I am 47 and recently retired from active duty because of a 100-percent disability. In a nutshell, my financial sitrep: Roth IRA $60K; Uniformed service TSP $38K; debt $450K (house $400K, Credit Card $29K, Cars $21K), retirement and disability income is $6K per month; one spouse; no children. I am considering rolling the Roth IRA into the TSP and taking a partial withdrawal of $50K to pay off credit card and car loans. We’ve cut back but make little headway against the credit card. I am expected to live another 20-30 years but am unemployable per the Veterans Affairs…
Q. Is it possible to look at the historical rates of return of the various Thrift Savings Plan funds and predict an allocation for a nominal return of 6 percent, or am I better off looking into the Life Cycle funds and trying to predict the return from there? (Past performance of the L Fund income just falls short of 6 percent). My goal is to make an average of 6 percent per year on my current TSP balance to reach my retirement goal. A. Yes, it’s possible. But you shouldn’t rely on a prediction based on so little data.…
Q: I’ve been a federal firefighter for over 10 years. Our retirement is forced at age 57. According to my last TSP balance, I have just over $60,000. Not much considering 10 years worth of contributing. Doing the math and adjusting for economy, in another 10 years, I will have less than $120,000 for 20 years of service for retirement. How do I know I’m putting my funds in the right retirement fund? Right now, I have 100 percent going into the L2030 with 100 percent of future allocations going in the same. I just know I’m missing out on…
Q: I have about $82,000 in my Thrift Savings Plan, from $89,000 two weeks ago, with 80 percent going into the L2020 Fund and 20 percent into the G Fund. Should I transfer all of my fund to the G Fund, or is it kind of late now because of money having gone down since last week. Can you give me any suggestions on what I should do? A: Sounds like you’re in over your head, like most investors. We don’t give specific investment advice through this forum. That would be irresponsible. In general, if you don’t know what else…
Q: I recently read an article by Mike Miles regarding rebalancing the distribution of funds in your TSP. I’m currently in the L Fund 2020. With being in the L Fund, do I need to consider rebalancing my distributions or is this done automatically for me just by being in this type of fund? A: The L Funds are automatically rebalanced daily to an ever-changing allocation. That is not the same as rebalancing your account regularly to an allocation selected to best meet your needs. I suggest you research the L Funds, and anything else in which your life savings…
Q: I am 27 and I’ve been in the federal service for five years. All my contributions to the TSP are in the L2040. Since I do not expect to retire before 2040, I think the smartest move should be investing in the new L2050 fund. But my question is, should I move all the money that I already have to that fund, or should I just start investing in the L2050 and leave whatever I have in the L2040? A: The TSP recommends that you invest all of your account assets in the L Fund that corresponds most closely…
Q. I have the lifecycle funds 2030 and 2040, and also the I and S funds. I distribute 25 percent of my account to all four. I also am putting money in them and it, too, is divided into all four of them. I want to know which is the best one to invest in. I am in the Army and I won’t retire for another 10 years or so? A. Without the proper understanding of your circumstances and analysis, it is impossible to give you good advice. The TSP suggests that you select the appropriate L Fund and invest…