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Dallen Haws at Haws Financial Planning
Sierra Vista, AZ
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When it comes to investing, the most crucial decision to make is how to allocate your assets. This decision can determine whether you will achieve your financial goals or not. However, finding the perfect asset allocation strategy that suits everyone can be a daunting task. This is where the magic TSP allocation comes in.
TSP or Thrift Savings Plan is a savings plan designed for federal employees and military personnel. It is a defined contribution plan that allows employees to contribute to their retirement savings while receiving matching contributions from their employers. The TSP offers five different investment options, including government securities, fixed income securities, common stock, international stock, and a lifecycle fund.
The magic TSP allocation is a strategy that aims to maximize returns while minimizing risks for investors. It involves investing in a combination of government securities, fixed income securities, and common stock in different proportions. The allocation varies depending on the age and risk tolerance of the investor.
For investors in their 20s and 30s, the magic TSP allocation suggests investing 60% in the common stock fund, 10% in the international stock fund, and 30% in the lifecycle fund. This allocation is heavily skewed towards equities, reflecting the long-term horizon of young investors and their willingness to tolerate more risk.
Investors in their 40s and 50s should reduce their exposure to equities and allocate their investments in a balanced manner. The magic TSP allocation for this group suggests investing 40% in the common stock fund, 10% in the international stock fund, 25% in the fixed income fund, 15% in the government securities fund, and 10% in the lifecycle fund.
For investors in their 60s and above, the focus shifts towards preserving capital and generating income. The magic TSP allocation for this group suggests investing 20% in the common stock fund, 5% in the international stock fund, 30% in the fixed income fund, and 45% in the government securities fund.
The beauty of the magic TSP allocation is that it is not a one-size-fits-all solution. It can be customized to suit different investors based on their risk tolerance, investment horizon, and financial goals. As investors’ financial circumstances change, they can adjust their allocations accordingly.
In conclusion, the magic TSP allocation is a great strategy for investors looking to achieve their financial goals through a disciplined and proven investment approach. Whether you are a young investor just starting or someone looking to retire soon, the magic TSP allocation can work for you. The key is to invest early, invest often, and stick to your allocation plan. Remember, investing is a long-term game, and there are no shortcuts to success.
What that have to do with the fund that you put your money?
I've been watching your videos and I think they're fantastic. Thank you!
A question about allocation:
Are the percentages fixed? In other words, if my account grows from say 100,000 to 150,000. Is that 150,000 then reallocated based upon my elected percentages? If all the growth is concentrated in the C fund, is that growth reinvested back into the C fund, or is it reallocated to all of my funds based on my percentages?
Past is not prologue. The idea that the last 10 years the C fund doing the best means it’s somehow baked in is absurd to the max and honestly makes me think you have 0 idea what you are talking about.
That's a whole lot of words to say absolutely nothing.
I’m getting ready to retire – how do I get in contact with you
80 C and 20 S. Closer to retirement and in retirement allocate 60 C 10 S and 30 G.
Have cash 3-5 years to support a down market. But we have pension and social security to offset a down market. Not counting other investments. Your welcome.
C plus s is total stock market. G are bonds which MAYBE track inflation if your lucky.
this doesn’t make sense. when wouldn’t the most money make the most sense for everyone?
Do you work with Federal Retirees?
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