How To Invest Your TSP (Thrift Savings Plan): The Ultimate Guide

by | Mar 14, 2023 | Thrift Savings Plan | 18 comments

How To Invest Your TSP (Thrift Savings Plan): The Ultimate Guide




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Investing your Thrift Savings Plan (TSP) can seem daunting. It’s a long-term investment and the choices can be overwhelming. But investing your TSP is critical to your financial security in retirement. Here’s a comprehensive guide to help you get started.

1. Know Your Investment Options

The TSP is a 401(k)-type retirement plan available to all military members and federal employees. There are five investment options available to TSP contributors, each with varying levels of risk and potential reward. They are:

– G Fund: Government securities fund with a low-risk, low-return investment.

– F Fund: Fixed-income index fund that invests in corporate and government bonds.

– C Fund: Stock index fund that invests in the top 500 U.S. companies.

– S Fund: Stock index fund that invests in small- and mid-sized U.S. companies.

– I Fund: International stock index fund that invests in companies from developed foreign markets.

2. Develop Your Strategy

The key to investing in your TSP is to develop a strategy that aligns with your goals and risk tolerance. Consider the following when developing your strategy:

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– Asset allocation: Diversify your investments to spread the risk among different asset classes. Most financial advisors suggest investing in a mix of stocks and bonds, with a heavier weighting on stocks the farther you are from retirement.

– Risk tolerance: Determine your risk tolerance by your investment horizon, financial goals, and comfort level with the potential loss.

– Rebalancing: Rebalance your investments regularly to maintain your desired asset allocation.

3. Stay the Course

Investing in the stock market can be volatile, but it’s important to remember that long-term gains tend to outweigh short-term losses. Time in the market is often more important than timing the market. It’s critical to have a long-term view and stay the course with your investment strategy.

4. Utilize Professional Help

If you’re unsure about how to invest your TSP, consider seeking professional financial advice. Contact TSP’s ThriftLine or find a financial advisor to help you develop the best investment strategy based on your individual goals.

5. Monitor Your Investment Performance

Periodic assessments of your investment performance help you stay on track towards your financial goals. Review your TSP account balance and your asset allocation regularly to ensure it aligns with your financial goals.

In conclusion, investing your TSP may seem overwhelming, but it’s important to your financial security in retirement. Take the time to understand your investment options, develop a sound investment strategy, and stay the course. Utilize professional help if needed, and monitor your investment performance regularly. With a little research and proper planning, you’ll be well on your way to a financially secure retirement.

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18 Comments

  1. jen zanoni

    What strategy is this ?

  2. Michael Clark

    I'm sorry but the world is changing at a great rate

  3. Michael Clark

    Nice vid — have you watched the inflation and war on the horizon?

  4. Jonathan Ramos

    I live in Cleves, Ohio. Can you please recommend at least 2 certified financial advisors in our area. Thank you.

  5. INVICTUS_15

    When will the TSP allow us to choose individual stocks?

  6. Frank Of VA

    Enjoy your channel. Could you please consider doing a video addressing the specific topic of the 20% withholding on TSP Installment Payments expected to last less than 10 years versus the tax withholding on payments expected to last 10 years or more. Confuses me. Thank you for all you do.

  7. priola7

    A friend said I should do 100% C & S funds, because my pension and SS are ‘guaranteed’ annuities, and essentially my 60% in cash. So the TSP is ok to carry risk in. Thoughts? (I’m 65 and retiring in a year).

  8. Avery Wheeler

    I understand the Bucket Approach but when making TSP withdrawals you cannot specify which Fund (ex. G or F) to withdraw from. You can only specify Traditional or Roth.

  9. R Lhouse

    Should the contribution allocation be the same as the IFT all the time? Also, if we’re allowed 2 IFTs per month, is there a specific day in the month to do the IFT?

  10. wildzeke

    New hires, follow these steps. 1) contribute 100% C fund. 2) create a crazy long password 3) lose the password 4) in 35 years, request a password reset 4) enjoy your million dollars.

  11. Kelly traveler

    If I remember right in retirement does the fund’s draw come from all the funds invested in equally? So you maybe drawing off of say the s fund Whether it’s down or not possibly at a loss in that fund.

  12. moe dollars

    Got a question: Is it better to split half your TSP investment in Roth & traditional?
    Backround: we started investing in just Roth TSP in the beginning, then we owned more in taxes when our income went so we switched to traditional. My thinking now is it is better to just put some back into ROTH so we can have more tax free available when we retire and if we get hit with taxes just pay it now. I do know that traditional seems to grow faster than in Roth.

  13. Jose Arroyo

    Would you advise my 401k small amount that's grown on it's own 5 times it's amount over the last 22 years. S&P 500 and some bank stock. Or should I leave it alone? I can't put any more money into it but it's done great on it's own. Also, would you advise going full C fund on TSP even after I'm retired? I don't plan to be getting more distributions than I need while retired.

  14. Anthony Paciolla

    Another awesome video, thanks Dallan

  15. 5.0 Beers

    My allocation in the TSP is C Fund – 65%, S Fund 25%, I Fund – 5%, F Fund – 3%, and G Fund 2%.

  16. Benjamin Johnson

    76% C Fund; 18% S fund; 6% I Fund. Time horizon is 11 years. Pedal to the metal. No complaints. Has it been rocky? You bet (Here's looking at you, 2001, 2002, and 2008). Any regrets? Absolutely not.

  17. Navid Tarazi

    I watched all of the video. You've got a lot of amazing content but I think the videos need some more editing to be more dynamic and engaging.
    I actually know a guy who does YouTube edits for fifty cents per minute and he only charges you after you are satisfied with the outcome.
    Ok you Got me ! that guy is me 🙂
    reply to this comment if you were interested so that I could send you some of my previous work.

  18. Dan R

    C fund and S Fund – (pick your allocation percentage as you see fit) and contribute as much money as you can. Don’t touch it. After 13 years, I’ve been crushing it with those allocations and relatively close to max contributions.

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