Confused About How to Allocate Assests for Retirement Investments

[britri3650]

Hello. I'm a federal worker with most of my retirement savings in lifecycle funds in a TSP but my wife and I have traditional IRAs and Roth IRAs at Fidelity from prior jobs that are invested in a jumble of various large and small company index funds. Should we transfer our traditional IRAs into my TSP? Or keep our IRAs and make sure they're invested in assets classes that aren't available via the TSP such as REITs and gold so that our overall asset allocation between the TSP and IRAs is diversified? Lastly, if we should keep our IRAs at Fidelity and not transfer them into the TSP, what low cost Fidelity index funds do you recommend we buy? My wife and I have about 12 years to 59.5 years old. Thanks.

[DrF]

Maybe it would be wise to read up on asset allocation. https://www.bogleheads.org/wiki/Asset_allocation
There are many threads here that argue it ad nauseum.
Fidelity has plenty of low cost options, their Spartan funds track indexes and have very low fees. They also have iShares which are ETFs that track indexes with very low annual fees and no trading fee. My recommendation is own a large part of the US stock market and add international, bonds, etc to your liking. The higher your stock allocation the better chance you'll have in your money lasting your entire retirement, but with more volatility.

[MDM]

Should we transfer our traditional IRAs into my TSP? Or keep our IRAs and make sure they're invested in assets classes that aren't available via the TSP such as REITs and gold so that our overall asset allocation between the TSP and IRAs is diversified?

Up to you but many consider the TSP a particularly sweet deal.  If you want to do a Backdoor Roth IRA then you should definitely get money out of your tIRA.

Lastly, if we should keep our IRAs at Fidelity and not transfer them into the TSP, what low cost Fidelity index funds do you recommend we buy?

See Three-fund portfolio - using Fidelity and others.

[MustacheAndaHalf]

Fidelity has removed "Spartan" from the fund names that were famous for low fees.

You could pick large cap (S&P 500) with $2500 or $10000 minimums (lower fee on $10k min):
https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/315911206
https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/315911701

Similiarly for total stock market:
https://fundresearch.fidelity.com/mutual-funds/summary/315911404
https://fundresearch.fidelity.com/mutual-funds/summary/315911800

[MilitaryMedicineMustache]

Well, to the best of my knowledge, TSP has the lowest expense ratio available, so your investments will grow more there.  You can capture the whole market if you log into your TSP.gov account and set up your distribution.  I'd check out the Military Guide to Early Retirement.  I know it mentions this in the book, and I believe it was on the website somewhere as well: Nord says the expense ratio is about 1/8 of most Vanguard funds!

From the TSP.gov website:

https://www.tsp.gov/PlanParticipation/BeneficiaryParticipants/administrativeExpenses.html

"For 2015, the average net expense was $0.29* per $1,000 invested."  So... 0.029%!