Harvesting TSP Gains

[Pill]

This is not what I do, but seems to make sense. Thought it was worth sharing.

https://high3team.com/Harvesting_TSP_Gains.html

 

[jimijr]

To accomplish this, rebalance. Set your percentages and rebalance to them every pay period. (L-funds do this daily but that frequency is uneccessary.)

You will HARVEST any profits to be had by selling a few shares. If prices drop you will be buying more which leads to a faster climb when prices rise once again. You will make money faster than you lost it.

My strategy was to place all new contributions in the G-fund, then rebalance every two weeks on the Tuesday following the Monday payday, the day funds flow into the account.

The man is absolutely correct, never sell low, BUY low.

But in two weeks I'm leaving federal service and transferring 100% to my IRA with RBC Dain Rauscher, so I am now 100G.

 

[Boghie]

Pill,

The excel spreadsheet provided was quite good. It didn't handle my wild swing from a 0 balance in the I fund to a 20% balance. Got a DIV error. Probably cannot handle a $0 initial balance.

Also, I think this technique has far more benefit for folks that have a decent balance in TSP - maybe $100K or so. That way, the TSPer could take decent chucks of casholla out and harvest it while simultaneously having a decent amount working the compounding game.

 

[JTH]

Yea I don't get it, there's zero evidence provided to prove it works, factor in inflation and you probably lost money.

 

[EmoDx]

To accomplish this, rebalance. Set your percentages and rebalance to them every pay period. (L-funds do this daily but that frequency is uneccessary.)

You will HARVEST any profits to be had by selling a few shares. If prices drop you will be buying more which leads to a faster climb when prices rise once again. You will make money faster than you lost it.

My strategy was to place all new contributions in the G-fund, then rebalance every two weeks on the Tuesday following the Monday payday, the day funds flow into the account.

The man is absolutely correct, never sell low, BUY low.

But in two weeks I'm leaving federal service and transferring 100% to my IRA with RBC Dain Rauscher, so I am now 100G.

Jim,
Congrats on your retirement. I was stationed down in Cayo Hueso at Trumbo Point for 6 years. Loved every day of it! Best of luck!

- Emo

 

[SkyPilot]

But in two weeks I'm leaving federal service and transferring 100% to my IRA with RBC Dain Rauscher, so I am now 100G.

Just wondering, why would you transfer to an IRA? Are you looking at investments other than available with TSP? Over the years I have come to beleive that investment managers seldom produce results better than TSP participants, and often don't even equal S&P 500.

Just curious...

 

[jimijr]

Under my adroit management my TSP balance equals twice the total of my contributions. My IRA, which has languished since I joined the federal service, has a balance equal to five times my total contribtuions.

Partly this is due to the availability of investment vehicles lacking in the TSP. The heart of it was a 30-yr zero coupon bond maturing in Nov '10 paying 8.5%, for example. My guy is talking corporate preferreds. I see they are paying around 7%.

They charge no annual fees for accounts greater than $250,000 and will set up a free checking account with VISA card. There will be transaction fees but this will not be the kind of account that gets churned if you know what I mean, and who can object to paying a fee in order to get what you want? I told him make us 6%, you keep 1% and I'll take the fiver. "Exactly," he said.

In addition, the Thrift Board hassles us and calls it service. In contrast, the man who has handled my account at RBC has been with me for 25 years. He is now a senior vice-president but still takes my calls personally and is always happy to talk with me. "How's the weather?" I called the Thrift Board the other day to see about sending the TSP-70 for 100% withdrawl and she was snotty with me, said I should've known where and when to send the form because it is all in the booklet, and don't call us until 30 days after you separate, etc., etc.

One gets what one pays for. Pay nothing get squat. Pay a little and get actual service. And who cares so long as I get what I need?

 

[crws]

Under my adroit management my TSP balance equals twice the total of my contributions. My IRA, which has languished since I joined the federal service, has a balance equal to five times my total contribtuions.

Partly this is due to the availability of investment vehicles lacking in the TSP. The heart of it was a 30-yr zero coupon bond maturing in Nov '10 paying 8.5%, for example. My guy is talking corporate preferreds. I see they are paying around 7%.

They charge no annual fees for accounts greater than $250,000 and will set up a free checking account with VISA card. There will be transaction fees but this will not be the kind of account that gets churned if you know what I mean, and who can object to paying a fee in order to get what you want? I told him make us 6%, you keep 1% and I'll take the fiver. "Exactly," he said.

In addition, the Thrift Board hassles us and calls it service. In contrast, the man who has handled my account at RBC has been with me for 25 years. He is now a senior vice-president but still takes my calls personally and is always happy to talk with me. "How's the weather?" I called the Thrift Board the other day to see about sending the TSP-70 for 100% withdrawl and she was snotty with me, said I should've known where and when to send the form because it is all in the booklet, and don't call us until 30 days after you separate, etc., etc.

One gets what one pays for. Pay nothing get squat. Pay a little and get actual service. And who cares so long as I get what I need?

I invite you to call TSP again, and get a different story....
rinse and repeat.
What training the youngsters at the TSP phone bank actually take away is highly subjective.
My questions that were matched by accurate information and subsequent actions (finally) were the result of my frustration and insisting on speaking with a supervisor.
BTW- All phone calls to the TSP Service Center are recorded and can be reviewed for accuracy.

 

[jimijr]

Too late.

I know it will sound heretical on this board but to me money is not everything. I'll spend a dime for service with a smile. I'm getting a generous pension because my high-3 was boosted by a 30% special salary rate and I'm getting some military time cheap. With only a 5% draw on my TSP/IRA I can pull down 85% of my present salary. So let them handle it, I'll be busy having a good time.

 

[Pill]

So I was looking at this again. I got my statement and input the numbers. It is saying in the S fund I need to Harvest 12.63% and 9.73% from the I fund. So roughly 22% which is rounded 23k.

I really like the theory. But taking 23k out of the market feels more iffy to me. My basic strategy has been to always be in the market(up and down, and contributing more when its down). I feel like having 23k on the sidelines is more of a risk than continuing to have it working for me. However it could be very smart to lock in these gains and wait for a decent drop then dump it back in.

Am I right? Is it better to have 23k working, or smarter to lock in over 10% gains and wait for say 5 or more % drop to dump the money back in?

Any thoughts???

 

[RealMoneyIssues]

So I was looking at this again. I got my statement and input the numbers. It is saying in the S fund I need to Harvest 12.63% and 9.73% from the I fund. So roughly 22% which is rounded 23k.

I really like the theory. But taking 23k out of the market feels more iffy to me. My basic strategy has been to always be in the market(up and down, and contributing more when its down). I feel like having 23k on the sidelines is more of a risk than continuing to have it working for me. However it could be very smart to lock in these gains and wait for a decent drop then dump it back in.

Am I right? Is it better to have 23k working, or smarter to lock in over 10% gains and wait for say 5 or more % drop to dump the money back in?

Any thoughts???

Ask yourself if there has been a 5% drop, or any indication that there will be one?

 

[Birchtree]

Nope, nothing greater than 4.7% so far - we've been transported back to 1995 so let's rally on to all time market highs. The other day XLY hit all time highs and there will be more to come.

 

[Handballer]

My Harvesting machine is broke.