The easy answer is to always make your contribution allocation, match your IFT allocation. But it doesn't matter as much as you might think, particularly if you have any kind of balance in your TSP, and / or you make one or more IFT's per month or so.
Let's say you have a balance of $50,000 and your bi-weekly contributions are $200. Your IFT moves your entire $50,000 into the new allocation - let's say it is the S-fund for now. Then you get paid and the $200 goes to the G-fund.
During the month the S-fund rises 2% so you made $1000 in earnings (2% of $50K). If you had made the change to your contributions (changing it to the S-fund also) instead of leaving it in the G-fund, your earnings would have been maybe $1006 instead of $1000. ($200 x 2 paychecks in the month x 2% on 1st $200 and 1% on 2nd $200 :blink
. So, it was not a big deal.
The next time you make an IFT, all of your money gets moved into the new allocation (your orig $50K + $1000 in gains + the $400 in the G-fund + plus the small gain you had in the G-fund). And the process starts over.
So, if you make an IFT once a month or even once every 2 months, the effect of changing your contribution allocation is minimal on your account.
If however, you do not make any IFT for many months, that contribution amount will start to accumulate and it will be more meaningful to change your contributions to match your IFT allocation.
I hope that makes sense.
