Poll

How do you invest in TSP?

Lifecycle Funds
1 (6.7%)
100% to C Fund
2 (13.3%)
A mix of stock funds (C, S and/or I Fund)
9 (60%)
A mix of stocks and bonds (any combination of C, S, I, G, and/or F Fund
3 (20%)
Conservative:  only G and/or F Fund
0 (0%)

Total Members Voted: 15

Author Topic: Thrift Savings Plan (TSP): all in on C Fund?  (Read 1417 times)

Goatee Joe

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Thrift Savings Plan (TSP): all in on C Fund?
« on: March 28, 2020, 10:47:12 AM »
Question for any federal employees on here.  What are your thoughts on going all-in on the TSP C Fund?  I'm in one of the Lifecycle (L) funds and have been considering going 100% to C.  The recent crash would seem to create an opportune time to jump in, but I'm holding off for now.  COVID-19 is becoming more disastrous by the day in the U.S. and it appears the S&P index could potentially be in for a long decline.  I'd be interested in having fellow feds' opinion on this.  Anyone already take the plunge to C?  Anyone still holding out?  Other strategies?

celerystalks

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #1 on: March 28, 2020, 12:44:18 PM »
In my opinion the lifecycle funds of the TSP are overly conservative. Ive never seen good support for why the TSP picks the ratios for each lifecycle fund.  It is not based on the Trinity study or anything.  Also with daily rebalancing of the funds there is no chance to let the assets run for a bit before buying what’s down and selling winners. I think if you pick the”right” one for a scheduled retirement, it will have a large composition of g fund and f fund which is equivalent to cash and bonds. L income, for example, which all of these funds progress towards is 72% G and 6%F, this is ludicrously conservative.  The other base funds C/I/S are all there In L income but in such dilute proportions they will have virtually no effect on returns.  Add to this that the FERS pension is a form of fixed income for retirement , FERS employees participate in SS, and that most Federal employees have good job security, I think the Balance weighs heavily in favor of loading up on equities in the TSP. Personally I keep a 50/50 split of C and I fund and just leave it at that.

Beach_Stache

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #2 on: March 29, 2020, 06:49:30 AM »
I'm all in, 75% C, 25% S.  I used to do 2050 Lifecycle but also found it was very conservative, so changed maybe 5 years ago.  I'm in for the long run and while this sucks right now, I believe historically speaking (maybe I read this sometime) that any 10 year period from the great depression on favors 100% stocks.  Since I'm all in for the next 18.5 years at least, I don't plan on changing it and will just stay the course maxing out each pay period.  I've done this through the .com, 2008 and I just check the balances less frequently during bad years and so far it's turned out okay in the long run.

Michael in ABQ

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #3 on: March 29, 2020, 07:05:35 AM »
I'm at 60% C, 20% S, 20% I.

I agree the lifecycle funds are way too heavy on bonds for me. I've got a couple of decades before I'll touch this money, no need to slow down my growth with bonds.

Peachtea

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #4 on: March 29, 2020, 07:26:05 AM »
+1 to a 60% C, 20% S, and 20% allocation and feeling the Lfunds are too conservative. I picked that a few years ago after reading about asset allocations and plan on sticking with it long term.

But the reason for switching out of a L fund should be because they’re too conservative in general, not because now is a good time to buy stocks. You should read up on asset allocations, pick one, and then switch into funds that match it. I thought these were good resources.

https://www.bogleheads.org/wiki/Asset_allocation

https://jlcollinsnh.com/stock-series/

I always wondered if TSP picked conservative Lfunds because gov employees trend towards being risk adverse or because they don’t want to be stuck justifying a more aggressive funds to a congressional hearing during a crash.



Huskers1

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #5 on: March 29, 2020, 07:30:46 AM »
Question for any federal employees on here.  What are your thoughts on going all-in on the TSP C Fund?  I'm in one of the Lifecycle (L) funds and have been considering going 100% to C.  The recent crash would seem to create an opportune time to jump in, but I'm holding off for now.  COVID-19 is becoming more disastrous by the day in the U.S. and it appears the S&P index could potentially be in for a long decline.  I'd be interested in having fellow feds' opinion on this.  Anyone already take the plunge to C?  Anyone still holding out?  Other strategies?

still on hold, however, my postion is beginning to change on the bottom. I did not think that the bottom was in but throughout the past weeks upward moves in the Market.

I am beginning to believe the Market will ingnore the bad news in the US and focus on what appears to be recovery from som countries

dabighen

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #6 on: March 29, 2020, 10:31:45 AM »
Question for any federal employees on here.  What are your thoughts on going all-in on the TSP C Fund?  I'm in one of the Lifecycle (L) funds and have been considering going 100% to C.  The recent crash would seem to create an opportune time to jump in, but I'm holding off for now.  COVID-19 is becoming more disastrous by the day in the U.S. and it appears the S&P index could potentially be in for a long decline.  I'd be interested in having fellow feds' opinion on this.  Anyone already take the plunge to C?  Anyone still holding out?  Other strategies?

still on hold, however, my postion is beginning to change on the bottom. I did not think that the bottom was in but throughout the past weeks upward moves in the Market.

I am beginning to believe the Market will ingnore the bad news in the US and focus on what appears to be recovery from som countries

I have always been 80% C 20%S and intend to stay that way forever without exception.

grettman

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #7 on: March 31, 2020, 04:51:38 AM »
I have been a fed for 31 years.

I am 95% c fund.

The rest is in S, I and G.  Not much.

I stopped plowing money in S and I. 

I continue to contribute most of my check to C and a little in G.

In my opinion, lifecycle funds suck.

Goatee Joe

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #8 on: April 01, 2020, 07:22:20 AM »
Thanks, all.  The consensus so far seems to be:

- TSP Lifecycle Funds suck
- No votes for a 100% allocation to C Fund
- No votes for any allocations to G or F Fund
- Support for a mix of C/S/I, C/S, or C/I, in varying allocation percentages

If any other feds would like to chime in, I'm all ears!

ROF Expat

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #9 on: April 01, 2020, 09:32:41 AM »
How long is your timeframe?  Are you planning on retiring or drawing on your TSP funds anytime soon? 

If your timeframe is long enough, there's very little reason (except your own comfort with your asset allocation) to have any significant amount of money in anything other than equities.  Also, if you are planning on staying with the federal government long enough to have a pension, as far as I'm concerned, a federal pension is much like holding inflation protected government bonds (although the current administration has made proposals to cut retirement benefits, including COLAs). 


waffles

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #10 on: April 01, 2020, 01:58:06 PM »
I've been retired 9 months now. My TSP has about 77% C fund, 18% S fund and 5% G fund. I was 80% C and 20% S until December, when I looked at how much my TSP value had risen and for some reason decided to put 5% in G, sort of an emergency fund I guess?

My plan is to not have to touch TSP for 10 years or so. Since the diet COLA of FERS will keep my pension from keeping up with inflation over time I will use TSP at some point to help make up the difference. I have 9 years left of special retirement supplement (if it is not eliminated!) at which point my pension payments will go down. I also have 9 years before I can draw SS at the earliest age which I don't want to do. TSP can help with delaying SS withdrawals.

For now I am living just fine off my pension, and so TSP has time to recover and grow. As others have said here I am treating the pension as "bond" stability so I don't see the need at this time for bonds despite my 5% G lol. Maybe I'll put that part back into domestic stocks soon.

I agree TSP Lifecycle funds are too conservative, especially when used with a pension.

sparkytheop

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #11 on: April 01, 2020, 02:49:16 PM »
I'm no expert, but consider the L funds too conservative.  That said, I do have about 30% in the 2050 fund (I will retire in 2036 unless I can get an early out).  I'll move that to the next L fund when it comes out (farther away).  I do this to allow some of my retirement funds to go ahead and become more conservative as I get closer to retirement, without having to fuss with it myself.

The rest is in C and S.

All future contributions are set between C and S.

I'll have 35 years in though when I retire, and my pension will more than cover my living expenses.  Do I need to have any in an L fund?  Probably not.  But since I started my tsp at 21, and have contributed consistently over the last 20 years, my retirement funds are definitely healthy enough without everything needing to be in a "higher risk" fund. 

Goatee Joe

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #12 on: April 02, 2020, 07:20:44 AM »
How long is your timeframe?  Are you planning on retiring or drawing on your TSP funds anytime soon? 

If your timeframe is long enough, there's very little reason (except your own comfort with your asset allocation) to have any significant amount of money in anything other than equities.  Also, if you are planning on staying with the federal government long enough to have a pension, as far as I'm concerned, a federal pension is much like holding inflation protected government bonds (although the current administration has made proposals to cut retirement benefits, including COLAs).

My timeframe is actually fairly distant.  I'm planning on retiring in 5 or 6 years, but don't plan on drawing on my TSP funds until at least 15 or 20 years from now (will rely on pension plus possible 2nd career until then).  Does that timeframe strengthen the case for equities in my portfolio?

ROF Expat

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #13 on: April 02, 2020, 08:02:46 AM »
How long is your timeframe?  Are you planning on retiring or drawing on your TSP funds anytime soon? 

If your timeframe is long enough, there's very little reason (except your own comfort with your asset allocation) to have any significant amount of money in anything other than equities.  Also, if you are planning on staying with the federal government long enough to have a pension, as far as I'm concerned, a federal pension is much like holding inflation protected government bonds (although the current administration has made proposals to cut retirement benefits, including COLAs).

My timeframe is actually fairly distant.  I'm planning on retiring in 5 or 6 years, but don't plan on drawing on my TSP funds until at least 15 or 20 years from now (will rely on pension plus possible 2nd career until then).  Does that timeframe strengthen the case for equities in my portfolio?

I would certainly consider 15 years to be a long-term timeframe.  I'm in a fairly similar position as a recent (youngish) Fed retiree.  The real question to ask yourself is if you have willpower to hold a portfolio very high in equities during the inevitable downturns.  When I was working, it was easy to view downturns as buying opportunities.  After I retired, that was more difficult, but my attitude has been evolving. 

Goatee Joe

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #14 on: April 06, 2020, 04:30:19 AM »
How long is your timeframe?  Are you planning on retiring or drawing on your TSP funds anytime soon? 

If your timeframe is long enough, there's very little reason (except your own comfort with your asset allocation) to have any significant amount of money in anything other than equities.  Also, if you are planning on staying with the federal government long enough to have a pension, as far as I'm concerned, a federal pension is much like holding inflation protected government bonds (although the current administration has made proposals to cut retirement benefits, including COLAs).

My timeframe is actually fairly distant.  I'm planning on retiring in 5 or 6 years, but don't plan on drawing on my TSP funds until at least 15 or 20 years from now (will rely on pension plus possible 2nd career until then).  Does that timeframe strengthen the case for equities in my portfolio?

I would certainly consider 15 years to be a long-term timeframe.  I'm in a fairly similar position as a recent (youngish) Fed retiree.  The real question to ask yourself is if you have willpower to hold a portfolio very high in equities during the inevitable downturns.  When I was working, it was easy to view downturns as buying opportunities.  After I retired, that was more difficult, but my attitude has been evolving.

That's a good way to frame it.  With a steady paycheck coming in, this downtown doesn't seem like such an emergency.  As a young Fed retiree, do you still maintain a high-equities position in TSP?

I've also added a poll to this post to tally answers.

ROF Expat

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #15 on: April 06, 2020, 06:32:54 AM »
How long is your timeframe?  Are you planning on retiring or drawing on your TSP funds anytime soon? 

If your timeframe is long enough, there's very little reason (except your own comfort with your asset allocation) to have any significant amount of money in anything other than equities.  Also, if you are planning on staying with the federal government long enough to have a pension, as far as I'm concerned, a federal pension is much like holding inflation protected government bonds (although the current administration has made proposals to cut retirement benefits, including COLAs).

My timeframe is actually fairly distant.  I'm planning on retiring in 5 or 6 years, but don't plan on drawing on my TSP funds until at least 15 or 20 years from now (will rely on pension plus possible 2nd career until then).  Does that timeframe strengthen the case for equities in my portfolio?

I would certainly consider 15 years to be a long-term timeframe.  I'm in a fairly similar position as a recent (youngish) Fed retiree.  The real question to ask yourself is if you have willpower to hold a portfolio very high in equities during the inevitable downturns.  When I was working, it was easy to view downturns as buying opportunities.  After I retired, that was more difficult, but my attitude has been evolving.

That's a good way to frame it.  With a steady paycheck coming in, this downtown doesn't seem like such an emergency.  As a young Fed retiree, do you still maintain a high-equities position in TSP?

I've also added a poll to this post to tally answers.
my
At the moment, I am not in a high-equity position, but as I mentioned before, my position has been evolving. 

I retired about 3-1/2 years ago.  All the time I was working, I put 100% of my TSP holdings in C, S, and I funds (with the exception of the very early days when TSP actually required you to hold the G fund).  At the time of my retirement I was quite happy with the result.  In the months following my retirement, I wanted to rethink my asset allocation.  In 2017, I shifted about 65% of my portfolio to the G fund with the idea that I wanted to be in a very conservative position while I thought things out.  Looking back, I think subconsciously I was very concerned about sequence-of-returns risk since I was no longer contributing to my TSP funds.  And I also think I was probably subconsciously engaging in a bit of market timing since we were well into a long bull market.  As the market continued to rise, I then made a conscious decision that I believed the market was overvalued and I decided to stay out until there was a correction.  This was not subconscious, and was indeed me engaging in the dreaded market timing.  Over the next couple of years, I missed out on a lot of market gain.  Of course, I also missed out on most of the drop of the last month or so.  In the end, I am just about even with where I would have been if I had been fully invested.   

I am now looking to start shifting out of the G fund and back into C, S, and I.  It is possible that I will come out slightly ahead, but it is equally possible that I will come out slightly behind.  And if I come out ahead, I can only call it dumb luck. 

Obviously, everyone's situation is different, but with a few years of experience as a retiree under my belt, here are my takeaways: 

--I let myself get too concerned about sequence of returns risk given my relatively long timeframe.  Even now, I can't draw down my TSP for almost six years, and I probably won't do so even at that point. 

--I let myself get hung up on the idea that my asset allocation was "100% equities" which sounded too risky.  I have since come to the conclusion that I should factor my pension and paid off house into the equation.  With the house paid off, I can live off my pension income alone. 

--Given the two points above, I've come to the conclusion that I can be much more aggressive with my TSP funds, and my intent is to shift to 100% equities.  I don't think I will have to think about changing my asset allocation (except for rebalancing among C, S, and I annually) until I am ready to start drawing on funds.  It took me three years to reach a point where I could internalize all this.  I am glad that this lesson hasn't turned out to be very expensive. 

aboatguy

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #16 on: April 06, 2020, 09:03:22 PM »
My contribution allocation is:

C 65%
S 15%
I  20%

However,  S and I holdings are lower than contribution allocation but I'm not going to  rebalance for a while S 11.95% and I 18.49%



Villanelle

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #17 on: April 06, 2020, 09:36:46 PM »
Mix of several (stocks and bonds), but we also have non-TSP money (Roths, taxable accounts) which further complicate things.  Husband will have a military retirement so I'd be comfortable having no bonds at all, but he isn't quite there yet so we have about 10% bonds total. 

Goatee Joe

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #18 on: April 09, 2020, 11:34:21 AM »
My contribution allocation is:

C 65%
S 15%
I  20%

However,  S and I holdings are lower than contribution allocation but I'm not going to  rebalance for a while S 11.95% and I 18.49%

One of the common beefs with TSP Lifecycle funds is they tend to hold way too much I fund.  What's your rationale for holding 20% I, instead of a heavier tilt toward C or S Fund?

celerystalks

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #19 on: April 09, 2020, 11:46:41 AM »
My contribution allocation is:

C 65%
S 15%
I  20%

However,  S and I holdings are lower than contribution allocation but I'm not going to  rebalance for a while S 11.95% and I 18.49%

One of the common beefs with TSP Lifecycle funds is they tend to hold way too much I fund.  What's your rationale for holding 20% I, instead of a heavier tilt toward C or S Fund?

How do we know what is too much I fund. In my opinion the I fund is just more stocks.

Michael in ABQ

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #20 on: April 09, 2020, 11:50:27 AM »
I decided to check on my account and saw my Personal Investment Performance is only down 12% in the last 12 months. I expected it to be worse. Looks like my I and S funds are down a couple percent compared to my C fund.

REatc

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #21 on: April 09, 2020, 11:56:18 AM »
I’m 50% C and 50% S, have been for a while now. I’m not planning on this money for 25 years though...

ROF Expat

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #22 on: April 09, 2020, 12:19:56 PM »
My contribution allocation is:

C 65%
S 15%
I  20%

However,  S and I holdings are lower than contribution allocation but I'm not going to  rebalance for a while S 11.95% and I 18.49%

One of the common beefs with TSP Lifecycle funds is they tend to hold way too much I fund.  What's your rationale for holding 20% I, instead of a heavier tilt toward C or S Fund?

The I fund isn't a full "rest of the world" fund in that it doesn't include developing markets.  It does include Western Europe, Japan, Australia, and some other countries.  I think there's talk about expanding to include China.  If you invest in the S&P 500, in practical terms you do get some exposure to international markets, but there are still arguments in favor of  investing directly in international markets via an international fund to diversify a portfolio, mainly that international markets are often counter-cyclical to the US market and they offer a hedge against the dollar declining relative to other currencies.  Whether you want that diversification is up to you, but it is a common recommendation.  Heck, even Dave Ramsey recommends holding an international fund. 

davisgang90

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #23 on: April 09, 2020, 01:39:21 PM »
I anticipate touching my TSP investments when my first RMD is required in about 20 years.  I'm all C fund.

aboatguy

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Re: Thrift Savings Plan (TSP): all in on C Fund?
« Reply #24 on: April 11, 2020, 07:42:31 PM »
My contribution allocation is:

C 65%
S 15%
I  20%

However,  S and I holdings are lower than contribution allocation but I'm not going to  rebalance for a while S 11.95% and I 18.49%
 


One of the common beefs with TSP Lifecycle funds is they tend to hold way too much I fund.  What's your rationale for holding 20% I, instead of a heavier tilt toward C or S Fund?



I feel comfortable with 20% international in my TSP and I believe in diversification .