Best TSP Investment Strategies in 2024

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I am a practicing financial planner, but I'm not your financial planner. Please consult with your own tax, legal and financial advisors for personalized advice.

[@itguru2037]

All in 100 percent C fund. For 24 years. Average rate of return is between 8 and 10 percent. 6 years from retirement and not going to change anything

[@swright5690]

C in retirement?

[@AD-ui2pz]

Ballsy!

[@itguru2037]

@@AD-ui2pz not really because the TSP is not funding my retirement. It’s gravy money.

[@AD-ui2pz]

@@itguru2037 are you working at all? I'm on the fence about maybe wanting to work part time up to the FERS supplement limit if I need to, to avoid using the TSP account and let it grow more if I go at 57.

[@nishadawn7]

Wow!! Ballsy it right! Lol

[@zenawarrior7442]

Excellent advice again!! I'm doing close to what you said. Thanks!!😊

[@PlanYourFederalBenefits]

You are so welcome!

[@xychromosome6055]

This is very informative. Thank you for sharing.

[@PlanYourFederalBenefits]

Glad it was helpful!

[@MrYokahu]

Love your passion...

[@PlanYourFederalBenefits]

Thank You For your support!

[@itguru2037]

Take the tax break now. You may not live long enough to get your Roth money. Live for today. Life happens while you are planning on doing something else. I’ve known many people during my federal career that kept counting the days till they retired. Once retired , they dropped dead within months. Time is the commodity of life. Not money

[@PlanYourFederalBenefits]

Thank you for sharing!

[@baitcaster7260]

C fund for the longterm

[@davidpippin3460]

I have been 90% in C and S for most of my career and did very well. Now 5 years out from ret. its about 60/40 or so.

[@baitcaster7260]

@@davidpippin3460 thats awesome

[@CapCityDC]

@@davidpippin3460 perfect and yes it really is that simple

[@TwoHawksHunting]

I don't think that is a good strategy for the long term at all. Sure keep some in the G fund, but the C Fund has shown the greatest growth over the long haul. I know people who have well over 1million in the TSP and that growth wasn't from the G Fund.

[@mairynpiloto583]

This is me too. I read a simple path to wealth and I am C fund 100%

[@lucusmoore723]

80 C 20 S. Solid structure for return

[@joshuawensell2262]

excellent.

[@Untouchable_vI]

Rice and beans is one of my favorite meals

[@PlanYourFederalBenefits]

haha

[@c.hunter631]

I wish I knew in 2010 about Roth v Trad 🤦🏻‍♀️🤷🏻‍♀️

[@FactsOVERfeelings2024]

What is the definition of "early in your career" what age bracket would you be referring to?

[@PlanYourFederalBenefits]

Great question. In this case, it means you are very far from retirement (15+ years from retiring).

[@cdebelen4557]

I'm one of your subscribers. I'm in retirement at age 68 with a combined Federal and social security pensions of $6k. To maximize my current 12% tax bracket, I plan to transfer part of my TSP traditional to my existing Vanguard Roth. I'm not sure if I can do that, because I heard that I must rollover to Traditional IRA first, then to Roth. Please advice. TIA.

[@itguru2037]

Correct you have to do a rollover

[@PlanYourFederalBenefits]

Great question. Yes, you will need to rollover to a traditional IRA and then convert to a Roth IRA.

[@richardb9419]

Does a 60/40 split still make sense if you estimate your combined pension + SS is going to fully cover your financial needs annually? Since those together are basically going to cover my short term needs, I’m strongly considering keeping all but a couple hundred thousand in the C fund (which would me a 90/10 split for me)

[@Retired-jr3qs]

Ask your financial advisor

[@richardb9419]

@@Retired-jr3qs already have, meeting already set up. Just seeing what the rest of the peanut gallery might think!

[@erickarnell]

I agree that if TSP is just for things you don't need every year, you can slow or stop withdrawals if the markets get bad. You can handle more volatility if your withdrawals are more flexible.

[@CapCityDC]

If your annual needs are met by pension and SS then for sure an option is to consider being more risky in retirement with your TSP allocation, but only you can decide that works for you. Really depends on what your goals are for that $ and risk tolerance.

[@1Mannco]

Imo... if you have 3-5 years or so left working, 90% C fund/10% G fund is good. Maybe 70/30 the final year of work then at 80 yrs old on 60% S&P500/40% Bonds in an IRA somewhere. May be a little risky but you still get S.S. and have a pension. Plus 'maybe' you also get dividends from ETF's or have a Roth IRA too at Fidelity, 1-2 years of money in savings/cd's, hopefully no/low debt and smart with spending. IF you have those things being a bit risky imo is ok with the TSP. Just depends on your risk tolerance.

[@mikedv39]

Can you do a video on Monthly payments not from annuity, but just retrieving a monthly payments from TSP. I'm looking at taking a monthly amount from TSP till it runs out. No contract deals. Is this possible or do I have to take large chunks per year. No one is talking on this Just MetLife's way .

[@LRB8558]

You can do automatic monthly withdrawals. I'm doing it now. I wouldn't even think of an annuity

[@PlanYourFederalBenefits]

Yes, great question! Could you send this question into this link: app.hawsfederaladvisors.com/question-submission

[@sanfordjay1]

Been retired for just under a year and a half. Was G for my first 10 years so I missed the fall and rise from the ashes of the mortgage crisis. Been aggressively C ever since even into retirement and plan to stay that way. Don’t really need it have other income.

[@rickdunn3883]

Trad. vs. Roth has nothing to do with the fact that Roth grow tax free. It only has to do with taxes and fees paid when in the accumulation phase vs taxes & fees in the withdrawal phase. It's that simple. The difficult part is the question of future tax and fees. Also, if you put $10K into the traditional, it will cost more than $10k to put into a Roth, because you have to pay the taxes if $ go into Roth. Generally the way to compare is using marginal tax bracket for accumulation phase compared to Effective Tax rate during withdrawal phase. For most: Roth is better early on because you will be in lower tax rates. However, as pay increases, in later work years it may be beneficial to switch to the Traditional and get the tax deferral when your in higher tax rates. Other factors include: if you want $ to go to heirs and many other factors. Choosing investments: the general advice in this video is valid. Especially, the concept that over "Time" (really long term is a better description), the equity funds will do well (about 10% - less expenses of the funds). The mix of a fund that averages 10% plus a fund that averages 7% can provide more than the weighted proportional returns due to modern portfolio theory, while reducing risk. Try to make a plan and stick to it. Worst thing to do is to change funds and "chase" returns.

[@eagleschic4926]

Thank you for sharing.

[@striperseeker]

You're totally wrong. Contributions to a Roth are already taxed, not deferred. ALL earnings are tax free. If you earn $1million over your contributions, that is all tax free. In a traditional, you pay tax on the contribution, plus the earnings/gains. In your example, if that 10k turned into 100k in a Roth, it's all tax free. That's 90k tax free (less the 25% or 20% you paid on the original 10k investment). It's a no brainer. Esp if the employer, in our case the fed, has Roth. Otherwise you could not contribute to personal Roth due to IRS rules.

[@rickdunn3883]

​@@striperseeker Sorry, maybe I wasn't clear. To compare whether to put $ into a Tax Deferred Traditional or into a TAX Free Roth, is simply about the future vs present taxes, not the tax free growth. To compare you assume the same investment performance, the after tax value of the future Traditional will exactly equal the Roth value when the tax rates are the same (beginning and end). Here's why: Put $10K into a Traditional IRA and it grows to $100k, you owe say $20K in taxes 30 year later, giving you $80K in your pocket. To compare to a Roth: You need to compare an $8K Roth deposit (to the $10K traditional)...because you pay taxes on the $10K (giving you only $8K to deposit into the Roth) put into the Roth (this overly simple example assumes 20% taxes in both cases). If both cases earn the same interest the net to the investor (after tax) is exactly equal. That's why the Tax free growth is not a factor when comparing which is best. What matters is simply the % of taxes paid and when they are paid. Many people get this wrong. It's only when comparing tax due that determines which is more beneficial. For many: when starting out Roth is best (because they are in lower tax bracket typically), but as pay rises, so does their tax rates...for many later in their career it is beneficial to switch from Roth to Traditional for that reason. There are also other factors to consider. See this example: kzbin.info/www/bejne/en3YZ3aNrNFqf80

[@striperseeker]

@@rickdunn3883 not true my friend. I'm traditional, you pay tax on all earnings, plus contributions. In a Roth you only pay on contributions. If you earn 100k in a Roth IRA all tax free. In traditional, it's all taxed

[@lovinglife8097]

L Funds is the worst... everyone's argue..! For me I'm 44yrs. Old... I'm C Funds all the way to retirement.

[@austenpersons1769]

Would someone elucidate a flaw in following scenario that I have thought out. I take out 10,000k from my tsp and put it into a savings account with a guaranteed interest rate of 5.5%. I know some would argue the 10% relative return of the TSP rate and I won't try to begin to think i can refute that. However I have noticed my funds lately are barely going up 3%. This withdraw would not be for anything other than that account.

[@PlanYourFederalBenefits]

This is a great scenario and question. If you are looking for a more stable account, a savings account is great. The TSP can be hard to beat as well. As long as you find something that supports your financial goals.

[@alrocky]

Roll *$10k* from TSP into traditional IRA and invest in CD earning 5%. C Fund is +10% YTD.

[@jeffpadilla9891]

I put 24% plus my 5% match and my TSP is hardly moving, seems like I just deposit $1000 a payday and thats all that goes up. I am split on C and S fund with such crappy growth.

[@PlanYourFederalBenefits]

It might take a while to see any results. The C and S funds are meant for long-term growth.

[@janellvirtuouswoman4896]

Question I am 54 & retiring @56 and changed my TSP into S- Funds 20%, C-Funds50% & L-2030 -30% is that good or if I stay until 60 years old will that help?

[@PlanYourFederalBenefits]

Great question. There's a ton of factors that come into play when trying to decide what TSP funds to invest in. If you would like to talk about this complex decision, feel free to schedule and appointment through this link: hawsfederaladvisors.com/work-with-us/

[@janellvirtuouswoman4896]

Okay I will

[@scottgold1054]

Rates to long will kill this market for the next 12 to 24 months. Inflation Inflation Inflation will not be slowing down.

[@scottgold1054]

There will be no rate cuts till we have a big recession.

[@Kep19901]

Can't wait. Sounds good to me.

[@MacJosh812]

Can I put all annual $23,000 into Roth and leave traditional $0 in 2024?

[@PlanYourFederalBenefits]

Great question. As far as your contributions go, yes, you can contribute $23,000 in the Roth TSP and $0 in the traditional. But, the employer match of up to 5% will always go into your traditional TSP. Note: This is referring to the TSP, not an IRA.

[@davidreeves3396]

Is traditional TSP a traditional IRA ?

[@PlanYourFederalBenefits]

No, they are different.

[@alphpup3281]

In April I reallocated from 100% G funds to Lifestyle 2030 and I have lost $10,000. Why? I am retired.

[@PlanYourFederalBenefits]

Sorry to hear that. Here is a great video that might help you with your TSP funds in retirement: kzbin.info/www/bejne/Y56baKmXhdmEbpo&ab_channel=HawsFederalAdvisors

[@phillylady]

April was a down month this year for stocks, but overall the stock market is up near double digits for the year so you should be seeing some growth.

[@eandrgoodwin]

60/40? Isn’t that the ratio for someone who doesn’t have a pension? If you have a pension, can’t you be more aggressive?

[@itguru2037]

Correct. TSP is bonus money. Your pension and SS should be enough to cover your expenses. Retire debt free.

[@sfm45]

Too bad the TSP can't have a Nancy 'N' fund that would be invested in Nancy Pelosi's stock picks 🤣

[@walkingdude8779]

G fund until the big pulll back. 2026 is the renter point. I’m going Roth until the tax cuts. Expire.

[@danshigley6638]

Same. Maxing Roth until the standard deduction reverts.

[@striperseeker]

You forgot to mention, any matching can only go into the traditional TSP. No matching can go into a Roth. So do the minimum % to get max match (Usually 5%) then the difference into a Roth.

[@abirch77]

ALL of one's contributions should be in ROTH. ALL one's matching will always be in traditional regardless - your agency is not going to pay the taxes for you now that we do with the ROTH contributions (but earnings in ROTH are tax free).

[@striperseeker]

If you don't put any contributions into traditional, you won't get any matching

[@abirch77]

@@striperseeker NOT true. All my comtributions are ROTH and I've continued to get my 5% match which is all that goes into tje Traditional side. I'm sorry someone has mislead you but please stop perpetuating it.

[@striperseeker]

@@abirch77 I'll have to research more. I was told the only match I get is the automatic 1%. Therefore, I was told to put the 5% into Traditional to ensure I get the full 4% on top of that. Thanks

[@abirch77]

@@striperseeker I just re-verified. My statements are correct based on my most recent LES. If your agency HR dept is as bad as mine (worst out of 5 agencies I've worked for - truly pathetic and largely unresponsive, no doubt in large part because they are all based in DC); then good luck!!

[@kurpal8904]

100 C Fund!!!

[@mikecarlton6297]

Max your Roth IRA first.

[@liennatsan4328]

It is better to put 100 percent in C to get 1 million in 20 years

[@qwertyasdfg1261]

dont worry guys biden has it allllllll figured out

[@Kep19901]

He sure does! He's got my vote!!

[@davidsumner3750]

Yes - he is so smart - he told us all that he graduated at the top of his class (actually near the bottom)

[@joseperez-jf8cc]

BIDEN 🇺🇸🇺🇸🇺🇸

[@Kep19901]

@@davidsumner3750 still beat trump.

[@richardb9419]

The President doesn’t actually control the things that impact the stock market - the prevailing market environment and cumulative business decisions do. Trying to blame (or give credit to) the President vastly oversimplifies the pressures at play and reveals a severe lack of understanding of what “it all” actually is