Author Topic: TSP Fund contribution allocations?? Where to start?  (Read 3332 times)

digger

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TSP Fund contribution allocations?? Where to start?
« on: November 04, 2014, 07:35:24 PM »
Hi all!

So my wife just started her job at the VA, and I have a question regarding TSP contributions.
We're only maxing out the employer match (5% partial) because any extra income goes towards paying off Aunt Sallie (now called Navient, Psh!), but I want to do the best I can with that money.

I've basically not done much investment reading at all because I figured we'll be paying off student loans for AGES anyway, but when we found out about the match we decided to at least take advantage of it.

My question is, how would you allocate your fund distribution? Here is one comparison tool https://www.tsp.gov/investmentfunds/fundsoverview/comparisonMatrix.shtml

We're relatively young, so don't mind being higher risk, but I also don't want to be silly and go TOO high risk. Any opinions out there? There are a LOT of opinions out there, but I wanted to get a Mustachian perspective on this!

Thanks, all advice welcome!


Siobhan

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #1 on: November 05, 2014, 07:05:24 AM »
We do 50% C 25 each in S and I...then we rebalance when one gets out of whack and put some of the gains in G.  We are young so risk isn't an issue, and with bonds producing essentially a negative return after inflation nowadays we don't keep more then 5-10% in bonds.

PathtoFIRE

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #2 on: November 05, 2014, 08:50:26 AM »
The easiest solution is to pick a lifecycle fund, my wife works at a VA and that is what she did. The L 2050 fund is sufficiently aggressive at this point for most people (about 14% bonds/gov, the rest a good mix of US large and small and international.

https://www.tsp.gov/investmentfunds/lfundsheet/fundPerformance_L.shtml

Alternatively, you can use any of the standard indexing advice you will find here, Bogleheads, jlcollinsnh, etc., and create your own. C is essentially an SP500 fund, S is essentially a US mid and small cap fund, I is an international fund with weighting towards larger cap companies, F is a US bond market fund, and G are gov bonds with no real counterpart at Vanguard/Fidelity/etc.

digger

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #3 on: November 05, 2014, 09:45:47 AM »
Thanks you guys!

Much appreciated. Can anyone point me to a reading list, or a specific few books I can start reading now to get a better grasp on the investment game? I'm very GREEN in this dept, so some sort of "investing for dummies" entry level book would be good, followed up by more advanced stuff.

Thanks again, love this forum!

digger

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #4 on: November 05, 2014, 10:14:04 AM »
Also, is it possible to invest in specific individual stocks using the TSP system?

I might be showing my ignorance here.... :/

For instance, could I purchase stocks in Toyota?

Thanks again!

GGNoob

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #5 on: November 05, 2014, 10:32:57 AM »
For instance, could I purchase stocks in Toyota?

Why would you want to invest in individual stocks? It's best to invest in index funds and if you must invest in individual stocks, keep the total value less than 5-10% of your total portfolio.

The L fund is probably a good choice if you don't know much about investing. Otherwise a safe bet would be:

42% C (Large Cap US)
14% S (Small/Mid Cap US)
24% I (Total International)
20% F (Total US Bonds)

That basically gives you the simple 80% stocks and 20% bonds portfolio that Bogleheads would recommend.

RFAAOATB

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #6 on: November 05, 2014, 10:43:50 AM »
I am 100% all in on the S fund.  My biggest mistakes were keeping it all in the G fund and lifecycle fund in the beginning and missing those shares on sale during the financial crisis.

Siobhan

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Re: TSP Fund contribution allocations?? Where to start?
« Reply #7 on: November 05, 2014, 11:38:39 AM »
Digger, the L funds come with higher fees then the other funds, even a basic investing knowledge can help you avoid paying them (even though the fees are still crazy low compared to non TSP funds)