Newbie ?

[29year]

I’m currently invested 78% in the G fund ( the most conservative) and 22% in the F fund. I will be contributing for 2 more years. I don’t expect to have to draw on this for 7 more years. I would like to know what your opinion is on how I should have my funds invested. I want to play it as safe as possible, but get a better rate of return than I’m getting now. I realize that your advice is an opinion only and is not binding in any way. I realize that past performance does not guarantee future performance.
Thanks in advance.

 

[Hawgjo]

I’m currently invested 78% in the G fund ( the most conservative) and 22% in the F fund. I will be contributing for 2 more years. I don’t expect to have to draw on this for 7 more years. I would like to know what your opinion is on how I should have my funds invested. I want to play it as safe as possible, but get a better rate of return than I’m getting now. I realize that your advice is an opinion only and is not binding in any way. I realize that past performance does not guarantee future performance.
Thanks in advance.

Hi 29! Take a look here and you'll get some good advice from some of us in the same boat. Merry Christmas to you! Joe

Retirement and IRA Talk

 

[tsptalk]

Welcome 29year! Thanks for joining us.

In order to get a better rate of return, you will need to add some exposure to stock funds, C, S, or I funds. S and I are more volatile than C.

Using F helps hedge against losses in the stock market, but not to the same degree. In other words, if you went 50% C and 50% F, it would not offset each other, but it would keep losses down when the market turns down.

There's no guarantee that stocks will rise, but over a seven year period, unless something dramatic happens like another financial crisis, stocks 'should' be higher.

I don't want to give any specifics, but using some C fund along with some F, while keeping a nice chunk in G, should provide a decent defensive, yet have some exposure to risk that could provide more gains than just just a G / F allocation.

I'm sure others will give their feedback - hopefully someone who has been in your situation and can share their experience.

Good luck!

 

[Boghie]

I’m currently invested 78% in the G fund ( the most conservative) and 22% in the F fund. I will be contributing for 2 more years. I don’t expect to have to draw on this for 7 more years. I would like to know what your opinion is on how I should have my funds invested. I want to play it as safe as possible, but get a better rate of return than I’m getting now. I realize that your advice is an opinion only and is not binding in any way. I realize that past performance does not guarantee future performance.
Thanks in advance.

I would bucketize - or have it bucketized. Maybe read Ray Lucia's 'Buckets of Money'.

The math and planning is kinda intense, so maybe seeking the help of a financial adviser who manages assets in this manner would be best. Basically, this strategy separates your asset base into separate categories. One you spend down over a period of 5 to 7 years. The next is safe(ish) and helps refill the first when it is depleted. The last is for long term growth so you do not run out of assets. The last refills the first two. There are other buckets - but that is the basics.

 

[Boghie]

Welcome 29year! Thanks for joining us.

In order to get a better rate of return, you will need to add some exposure to stock funds, C, S, or I funds. S and I are more volatile than C.

Using F helps hedge against losses in the stock market, but not to the same degree. In other words, if you went 50% C and 50% F, it would offset each other, but it would keep losses down when the market turns down.

There's no guarantee that stocks will rise, but over a seven year period, unless something dramatic happens like another financial crisis, stocks 'should' be higher.

I don't want to give any specifics, but using some C fund along with some F, while keeping a nice chunk in G, should provide a decent defensive, yet have some exposure to risk that could provide more gains than just just a G / F allocation.

I'm sure others will give their feedback - hopefully someone who has been in your situation and can share their experience.

Good luck!

Nice Tom...

Obviously, we concur. You need some of all the funds and you have to avoid (probably) the temptation to annuitize the entire thing. Annuitizing your entire TSP asset base means you throw everything into Bucket 1 and will have no growth potential. I think you should talk to a pro who understands the distribution part of retirement. You are not seeking contribution and growth support - you are seeking sustainment and longevity. I took the Lucia offer for a free review when I was 40 and came through good to go. No hard sell and the chap ('The Professor' in his radio show) was incredibly helpful and honest. My family will bucketize when I head off in my golden years...

 

[nnuut]

Welcome to the forum 29year. That is the $100,000 dollar question. But one thing I do know "nothing ventured nothing won or lost". If your afraid to risk anything you can't win much unless the Market tanks and you lose for an extended period of time, don't forget you can jump in when it looks good and out when it's losing, but that's the trick. Check out the AutoTracker it can be done.
Best of luck.
What did I say?
Norman

 

[nasa1974]

29year,

Welcome aboard. This is a great place to learn.

I agree with everyone that if you want to increase your investment you have to take some risk. With that said it is your money and only you know what you want to do with it so the amount of risk you want to take or will be comfortable with is totally up to you.

Good luck.

 

[Birchtree]

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected - I know that doesn't help much but 100% C fund is the way to travel for the next few years.

 

[ATCJeff]

Welcome. Site is full of great information. Risk=reward All depends on your own tolerance of risk.

 

[maui21ice]

Welcome to the site and congrats on being so close to calling it quits!

Great idea to play it safer the closer you get to retirement. Hopefully you have a good amount saved up and you're excited for retirement and not panicking!

WHile you're staying safe in the G, it probably never hurts to risk a bit when the stocks are doing good for a bit. Each December around the Santa Rally maybe throw some % toward the S or C, then head back to safety at the start of the new year.

Congrats and welcome aboard!

 

[Greybeard]

My current allocation is 100% S. January equities tend to favor small caps over the larger C so if you can stand the risk I would recommend S over C.

I retired last Feb with a little over $900k in TSP. I've been on TSP TALK every day since the early 90's. I attribute a lot of my success to this site. Welcome aboard!

 

[nnuut]

Welcome to the Forum Greybeard! Mine washed out a few years ago. I hope to hear more from you in the future.
Best of luck
Norman

 

[Frixxxx]

Welcome Greybeard,

That tag means something a little risqué on some other sites. Maybe a little more risk is needed for more people to hit that $900K mark. Do you have a scheduled withdrawal from your account or have you not touched your nest egg yet?

 

[Greybeard]

I'm kicking back withdrawals to $1k per month in 2015. I'm still managing risk pretty much as when I was working. Everyone's situation is different but, looking back, maxing out contributions and paying attention to at least the macro tech indicators are the two keys that I've seen to buying your way out of the machine.

I'll check to see what FRIXX means these days over on Craigslist.

 

[Frixxxx]

I'm kicking back withdrawals to $1k per month in 2015. I'm still managing risk pretty much as when I was working. Everyone's situation is different but, looking back, maxing out contributions and paying attention to at least the macro tech indicators are the two keys that I've seen to buying your way out of the machine.

I'll check to see what FRIXX means these days over on Craigslist.

Used to be in my signature, but it isn't nasty, Fri(xxxx) four x - FOREX trader

I get a few balks at accessing my thread, people think I'm going to be pornographic......maybe more like a "greybeard"!