Hello! Newbie here

[ofcr_slh]

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Hello all! I'm new to the site, after recently discovering it by a TSP search. The site really seems to be informative and helpful. Here is my situation: I'm 24 years old, I've been a Fed employee for about 8 months, after service in the Army and college. I'm going to start investing this upcoming open season (Apr. 15), and I'm relatively new to the world of investing. I plan on investing 5% to start with, since I just bought a home, etc. I think this is the smartest for me at the moment, since that is what the G matches. I was hoping some members here could assist me with my decision or educate me about the TSP process. Some questions I have are:

Should I distribute my money between several funds? If not, which fund is the best to contribute too? Is 5% a decent amount for the time being? Should I actively manage my account (switch plans on a regular basis)?

Please forgive me if this is the wrong place to post or for the dumb ?'s. That's all I can think of at the moment. Thanks in advance!

 

[tspgo_com]

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ofcr_slh wrote:

Hello all! I'm new to the site, after recently discovering it by a TSP search. The site really seems to be informative and helpful. Here is my situation: I'm 24 years old, I've been a Fed employee for about 8 months, after service in the Army and college. I'm going to start investing this upcoming open season (Apr. 15), and I'm relatively new to the world of investing. I plan on investing 5% to start with, since I just bought a home, etc. I think this is the smartest for me at the moment, since that is what the G matches. I was hoping some members here could assist me with my decision or educate me about the TSP process. Some questions I have are:

Should I distribute my money between several funds? If not, which fund is the best to contribute too? Is 5% a decent amount for the time being? Should I actively manage my account (switch plans on a regular basis)?

Please forgive me if this is the wrong place to post or for the dumb ?'s. That's all I can think of at the moment. Thanks in advance!

Knowing what I know now, if I were you I would invest the max allowed that I could afford. About the strategy to follow, I would suggest watch and learn. There several good strategies followed by many who visit TSPtalk. You are fortunate you found this site at this point of your TSP investing career. You even have time to do some paper trading.Pretend that you have funds in your account, select a couple of strategies to test, and just make pretend Interfund Transfers on paper. When the time comes you will be a couple of steps ahead of many of us that did not have the opportunity until we where half way through our careers. Welcome.

TSPGO!

 

[ofcr_slh]

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Thanks for the info TSPGO!

 

[tsptalk]

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Welcome ofcr!

I agree with tspgo. Get the most in you can afford. If 5% is all for now, that is great. At least you get the matching funds as you mentioned. Use grade promotions, step increases andcost of living raises to increase your contributions. It islesspainless that way.

I moved to Washington DC when I was your age and was making about 15K a year. The thought of saving for retirement at that time seemed futile and way too expensive,but I'm sure glad someone talked me into it. Getting started is the hard part and starting early is the key to big returns later on. Once you are in and you start seeing your account grow (by using the stock funds aggressively at your age) it will all be worth it.

Thanks for joining us!
Tom

 

[ofcr_slh]

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Thanks tsptalk! I'll take your advice and up my %'s as I get steps and promotions. What is a good initial allocation?

 

[tsptalk]

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ofcr_slh wrote:

What is a good initial allocation?

Check out the table at the bottom of [url]www.tsptalk.com/longer_term.html[/url]

 

[Shaggy]

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I like what Tom said. I too just started a few years ago and that is what I did. Every time I got a raise I increased my % so I did not see or feel it. Now I am maxed out and I do the savings bonds to continue the trend. Although I don't like the return on savings bonds it can be a safe haven so I can be more aggressive with the TSP. As for allocation the 20% in each is pretty good. It kind of gives you a feel for what they are doing. I know my goal each year is to beat this % increase which is tracked on Toms speadsheet. Once you are more comfortable and have educated yourself then you can start moving things around. I suggest starting slowly however, because it can be easy to get caught up in the excitement and then get discouraged when your on the wrong side of a market fall.

 

[ofcr_slh]

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Thanks Shaggy for the info! After reading through the boards the past few days, I've started to grasp/understand a little of the investment world. Thanks for this site!!!