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LEARN MORE ABOUT: Thrift Savings Plans
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
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As a federal employee, you have access to the Thrift Savings Plan (TSP), which is a retirement savings plan specifically designed for government employees. The TSP offers several investment options, including a variety of funds that you can allocate your contributions to.
With so many options available, it can be challenging to decide which funds to invest in and how to allocate your contributions. However, there is one TSP investment strategy that has proven to be effective for many federal employees: the Lifecycle Fund.
The Lifecycle Fund is a type of target-date fund that automatically adjusts your investments based on your target retirement year. The fund is essentially a mix of different TSP funds that are tailored to your specific retirement timeline, with the asset allocation becoming more conservative as you approach retirement.
For example, if you are planning to retire in 30 years, you would select the Lifecycle Fund 2050 (L2050), which is designed for individuals who plan to retire around the year 2050. As you get closer to your retirement date, the fund will automatically adjust its allocation to become more conservative.
The benefit of the Lifecycle Fund is that it automatically diversifies your investments based on your time horizon, reducing your risk exposure as you near retirement age. It also simplifies the investment process since you do not have to monitor and adjust your investments regularly.
However, it is essential to keep in mind that the Lifecycle Fund may not be the best option for everyone. If you prefer a more hands-on approach to investing or want to maximize your potential returns, you may consider allocating your contributions across several TSP funds manually.
Overall, the Lifecycle Fund offers an excellent investment option for federal employees who want a simple and effective way to save for retirement. By choosing the appropriate Lifecycle Fund based on your retirement timeline, you can be confident that your investments are diversified and appropriately allocated for your retirement goals.
Thanks! Useful information!
Thank you
Do you still have your FKINX? Private message if you can. I seen your fkinx film
I am new to the stock market. Every stock that I bought so far, I was out of luck because I bought them when they were expensive. I feel I missed out on all the stock opportunities so far for the tech stocks.I believe having 75K yearly income would be a good investment so I want to plug all my savings into the stock market. I know this sounds a bit dull but I would like to know if I should learn investing or let somebody else (more capable like a FA) do it for me? Please share your thoughts. I am kind of tired of searching for a good stock to buy and losing all the good opportunities.
G? C?
I do 80% C, 20% S. I’m leaving it there.
I'm a city letter carrier for USPS. What are your thoughts on the life cycle funds? That is my default since becoming a career employee and being eligible to contribute to tsp.
It's all about risk tolerance and what else you're investing in. Generally, when you're just starting, it makes a lot of sense to assume more risk in the index funds, and then taper into mostly G by retirement. The great news is, that's exactly what the L-funds do without you having to manage it. You select the fund that is your target retirement year. Then, you modify your risk after that with the other funds, e.g. 70%L-fund/15%C/15%S for a more aggressive stance or 50%L/50%G for a defensive posture.
horrible advice
Army advise? I’ll do the opposite. Hooyah
Nice video!! Very engaging.
Rich people have assets, which are inflation proof. On the other hand, earned income is vulnerable to inflation. That's why the rich get richer in inflationary environments. An example, wealthy person may own several homes, rental properties(Commercial/Residential), businesses, productive land, equities, bonds, etc. The average W2 employee gets taxed the highest rate, they own almost no productive assets.
It all depends on your retirement age. Don't try and time the crashes, just keep buying. Yeah, if you plan on retiring soon, dont have your stuff in C/S/I. But if you have 10+ years left, no way I would waste time in G fund. I personally am doing a 50/50 between C and S. But with the recent addition of TSP offereing mutual funds, I am researching that. The fact that we can now buy something other than S&P 500 and small caps, there might be way better growth funds for the long term. You would have to take into account the fees, but still could be worth it.
Josh, no matter what you say about Federal employees, I will never have any sympathy for them. I quit a DOD job and returned to civilian work after nine years back in 1995. Had I stayed in my federal job, I can assure you my retirement would be much more secure.
Where I'm at… Retired at the end of 2021. I have two full pensions… Military and Federal Employee. Modest TSP balance, but I won't have to touch it for a long time…(72?). Two pensions, social security, and the wife's income and 401k. We live modestly, and are actually banking 25% monthly. Debt free and own our home. Purchased a sub-compact SUV last month with cash. I'll get a truck once the wife retires. For now, keeping my TSP at 40 C/60 G. If a Bear Market shows itself, I'll probably flip to a 60 C/40 G.
Still thinking about my plan. I can retire today, but I love my job so I may stay for another 5 years to hit the magical 62 point. Will go into retirement debt free (including house). Pension should be 45% of what I will be making then. SSA will wait. Trying to build up a savings account that will equal 3-4 years of expenses (remember, no debt) so that during down times like this I can just dip into savings and not into the TSP bucket. By doing this, I hope to remain 100% in C or at least 70%C and 30%G. After all, I made all my TSP money by staying in C during my career so why not stay in it and ride out the bumpy parts with the savings bucket. Does anyone see anything wrong with this plan? If so, please advise as I'm always learning and seeking other peoples' opinions.
The great thing about having TSP plus a pension plus social security: no need for the G fund! Go C fund all the way– get the growth.
35% going into C, 65% going into a lifecycle fund. Been doing EXTREMLY well!
11 Bravo all the way. Fort Benning, GA 1983 D-4-2 Basic AIT. 80%G fund 20% C fund as a FERS employee.
I'm retiring in April '23 and parked my funds into the G last October. whoohoo better lucky than good sometimes. Love your show!
What about the L funds?
Just Say No to the "G" Fund
20-30 years working in the American communistic government is a rough gig, it’s mentally challenging to deal with incompetence in upper management constantly.
Now I know why my Dad did absolutely nothing but relax and do what he wanted to do after he retired.
Invested strictly in the c fund for about 20 years. In the last 5 years I started moving money into the G fund now I’m 50% C and 50% G. I am comfortable with that. Planning on using the barbell strategy with my reserve cash if my TSP C fund ever takes a hit. Quitting my crappy old job Dec 31 at age 57. Thank you Josh for helping me with this plan. If it wasn’t for you I would be staying at a job the I no more enjoy for another 5 year.
I invested in TSP for 15 years and did well. I retired at the end of June, only to find that TSP made a mistake and locked my account. They have yet to unlock it despite my calling every day. I have not had access to my funds since I retired. Their customer service and accountability are horrible!
Forwarded this to my son since this will help him, thanks!
Exactly what I tell the hundreds of potential retirees on Fed law enforcement I speak to each year. Starting point is 60/40. I personally like 70/30. But somewhere in there is fine. Buffett espouses 90/10 C/G. To me that’s a little too aggressive but for others it may be one.
Point is Josh is spot on here if anyone is looking for a second opinion.
I started my career before TSP available. Yes, we have a pension but that is not portable. The complaint was FBI could not recruit tax lawyers and forensic accountants without TSP.
Yes they did say KISS… Marine infantryman
S, or g, depending on things, that's it.
KISS is military wide!!!!!