Federal TSP program. Changes and what are you in?

[Al]

Originally Posted By: XS650

Take a good look at the Life Cycle funds in TSP. They strike a balance between various funds based on your planned retirement year.

I have some of Fidelity Freedom 2005 (FFFVX) For those retiring in 2005. This YTD it did 10% so far. For comparison Vanguard's Target Retirement (VTOVX) is 9.15%. If you want to be more conservative..for instance if you expect to retire in 2020 you can always for instance go with a 2010 fund.

But honestly I would really want some Europe and Emerging markets in addition.

 

[TallPaul]

I'd say the lifecycle funds are already too conservative. Stay fully in stock funds until within maybe 10 years of retirement, then start moving money to the G fund a little at a time until the day you retire about 50% is in G.

 

[H2GURU]

Jumping around is the worst thing to do as you have to be right twice (when to get OUT and when to get back IN ). You need to write out an Asset-Allocation plan and stick with it. Make sure to have some energy 15% and prcious metals 10% and look to gain from the EURO via some Eoropean fund. Keeping your age as the percentage of FIXED INCOME will serve you well... just be sure to avoid anything containing U. S. mortgage monies as this is a real mess and we've seen just the tip of the iceberg I do believe? Good Luck.

 

[tom slick]

I'm tired of having such a small amount of semi-mediocre (but safe) funds to choose from in TSP. I no longer contribute because I no longer work for uncle sam. I'm rolling all of my TSP into a trad. IRA that I have control over. I'm doing the same with an old 401k.

Cashing out a pre-tax retirement fund will cost you about 20% in taxes once it is all said and done. Rolling into other qualifying funds cost you next to nothing.

 

[msparks]

Also might want to look at other risk areas of your life. You could have 1 million in your TSP but a $2000 per month house payment when you retire and you will still be in trouble.

Living a frugal lifestyle overall will be good if you are really worried about the future economy,dollar,president,world market.

I'm looking at paying off my house ASAP, that's a 100 rate of return, plus appreciation. Can't beat that guarantee.

 

[Drew99GT]

Originally Posted By: tom slick
I'm tired of having such a small amount of semi-mediocre (but safe) funds to choose from in TSP. I no longer contribute because I no longer work for uncle sam. I'm rolling all of my TSP into a trad. IRA that I have control over. I'm doing the same with an old 401k.

Cashing out a pre-tax retirement fund will cost you about 20% in taxes once it is all said and done. Rolling into other qualifying funds cost you next to nothing.


If you've got some time ahead of you before retirement, roll your TSP into a roth IRA and pay the taxes now. Then, let er rip tax free for a decade or two! Roth's are the way to go. And my goodness, if you ever get an employer that offers a Roth 401K, jump full steam ahead into that baby.

 

[JHZR2]

Originally Posted By: tom slick
I'm tired of having such a small amount of semi-mediocre (but safe) funds to choose from in TSP.


What is mediocre about the TSP funds? They are extremely low cost, and track indexes. This is the same setup that many have, the tried and true index fund investing.

Sure, you don't have the most flexibility to do this and that, but then again, likely you ought to have other accounts besides TSP, so they would give you the flexibility too.

Granted, if youreno longer working for the gov't, you may desire to roll one way or another for other reasons.

JMH

 

[Schmoe]

That I fund has been real impressive this year. I long term plan is to have the house paid off by retirement time and only look at a car payment and utilities.

 

[JayhawkRoy]

I would recommend go to the Stock Index 500 fund, if you make any changes. That is where nearly all my TSP is, because I am relatively risk averse and I do not believe that market timing does much good in the long term. Moving to the G Fund exclusively will ensure that you can't take advantage of any potential stock market gains. Historically, keeping your retirement money into the stock market will outperform the G fund, over the long term.

Consider moving your money to the G fund 2 to 5 years before your actual planned retirement date. If the stock future looks good, keep the money there as long as you can. Overall returns will be better.

 

[tom slick]

IIRC you can't technically roll a TSP or 401k type account over into Roth IRA, Roth IRA has to be funded by earned income, hence the need to roll it into a trad. IRA. I am currently a student with no income so no roth for me this year.


I was making max contributions to TSP when I was in the military, at the time with no matching funds. I am no longer affiliated with the gov't and don't really care for only selecting from 5 funds when I can roll it over and have total control of my investment with no downside. Their funds are "safe" investments that usually perform as well as the market, nothing wrong with that, but I am 40+ years from retirement and I can afford to be a little more adventurous with some of my money.
My TSP is only a fraction of my total portfolio.

 

[Drew99GT]

Sure you can roll it over into a roth; you have to roll it over to a traditional first, then to a roth and pay income tax during the year of the rollover. It's better to do it when you don't have that much to roll over so you don't get into the high tax brackets, OR you have something that can really offset the income.

Then, the growth of that money will grow tax free.

Any IRA, traditional or Roth has to be funded with earned income and it's still considered earned income when you do the above.

 

[Drew99GT]

starting next year, you can roll them over directly

 

[Drew99GT]

Sweet, next year you can roll it over directly, subject to a 100K modified AGI limit.