Invest Your TSP Like A Pro - 7 Ways For Federal Employees To Maximize Retirement

To maximize your Thrift Savings Plan (TSP), there are some core principles that federal employees can apply. Using these will help you avoid costly mistakes and learn how to best use the TSP to meet your goals. There are also some quirks about the TSP C fund investment that you should know about, and understand exactly how to use index funds. Thiago discusses tips for federal employees to maximize their retirement in this video.
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• SECURE Act 2.0 | Impor...
[THE TRUTH ABOUT INFLATION]
• 3 Ways to Benefit from...
0:00 TSP Setup
0:59 Risk Rating
2:28 Management
3:23 Retirement Target Date
4:02 Drift
6:04 Lifecycle screenshot opp.
7:00 Core funds
9:11 Tax savings
10:40 Growth investments
11:32 Investment Tax efficiency screenshot opp.
11:40 Market timing
12:30 Investor cycle
14:05 Tell us more
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#TSP #fersretirement #federalemployees

[@glasshalffull2930]

For a new employee who is looking at a long career with the government, I cannot emphasize enough that you need to be 100% in stocks and just put blinders on as the market goes up and down as it always does. I’m retired now, but began my federal service in 1985 with a salary of about $22,500. The TSP didn’t even have any stock funds and after they added them, I didn’t have any money in the C until several years later. Because of advice, I switched totally to the C Fund and never looked back. During the 2000 Tech Bubble and then the 2007 Financial Crisis, I thought I’d never be able to retire. However, the stock market recovered and went on to set many more records.

[@TheFedCorner]

Glad you received advice that served you well!

[@brianjackson6342]

You can actually pick either Roth or Traditional TSP now.

[@CumminsTurbo4]

I guess I missed where he stated otherwise...I've been investing in both ROTH and traditional, on and off, for over 5 years via TSP 😊

[@menasiak7173]

I love all the helpful info and easy to read graphs :)

[@TheFedCorner]

Glad it was helpful!

[@wm1329]

Thank you for providing an helpful and informative lesson!

[@TheFedCorner]

My pleasure, glad you found it helpful. -TG

[@mauricereid4796]

Great info. Keep up the good work!

[@TheFedCorner]

Glad you enjoyed, thanks for tuning in!

[@jimmybx0072]

As someone who just fear dumped into the G I appreciate this vid. +1 Sub from me. I will be on the look out for more education on TSP. Excellent vid!

[@TheFedCorner]

Thanks for your support!

[@GunMD]

Fantastic content. Please keep it coming. Thanks for taking the time to educate us

[@TheFedCorner]

Thank you! Glad you enjoyed! -TG

[@user-ut5cb2dg8z]

Wow! Best TSP video I have ever seen. Great Job!

[@TheFedCorner]

Glad it was helpful, thanks for the kind words! -TG

[@joshualarson5916]

great work

[@TheFedCorner]

Thanks!

[@wdeemarwdeemar8739]

Very interesting.

[@TheFedCorner]

Glad you think so!

[@todaysbest369]

We are GRATEFUL!! We are! Our new jedi to investment.

[@TheFedCorner]

May the [financial] force be with you! -TG

[@edwardjohnson4649]

Please make more videos like this. I like how you break it down and explain why you would choose or structure what you need for a certain situation or stages of life.

[@TheFedCorner]

Will do!

[@martinhyizna3299]

My issue with the TSP is the slow mechanism for interfund transfers and the limited number of transfers allowed monthly.

[@TheFedCorner]

It’s a challenge shared by many work-retirement programs, unfortunately.

[@silverowlthrifter]

Thank you..retiring next year

[@TheFedCorner]

You're welcome, glad you found it helpful. Congrats on your soon-to-be retirement!

[@ivdubgti]

Inflation and the cost of living has become unsustainable. I had to drop my TSP contributions to put gas in my car to get to my Federal job.

[@TheFedCorner]

Sorry to hear that, I know inflation has been quite difficult to deal with for many people.

[@jayviermendiola]

I've been getting real interested recently in budgeting, & because of my personal situation, not sure If I want to extend my 4 year contract, I'm playing stupid risky with 60% roth & 100% of that into the C funds. I'm 50/50 rn, I do not want to stay in the military but I also want to continue taking advantage of Roth TSP & invest much more.

[@TheFedCorner]

If you’re young, Roth may make a lot of sense. Even when older it can be a great tool as well. I have several other videos talking about the importance of Roth and tax mgmt so check them out if you’d like.

[@Matt-fs1yy]

Not rebalancing can cost you at least high five figures come retirement time. Alexander Green explains this brilliantly in his book "Gone Fishin' Portfolio."

[@TheFedCorner]

That's right, and the larger a portfolio, the bigger the mistakes will cost. We've seen 6-figure problems that people had to work through, and in a few cases, even 7-figure mistakes.

[@fred4987]

50% C 50% S AND let it ride.

[@TheFedCorner]

That can work for younger folks, thanks for tuning in!

[@OEA2580]

You can select traditional or Roth in TSP…

[@CumminsTurbo4]

Seems like he should know this? I guess I missed where he stated otherwise

[@johnsullivan4413]

Thanks so much, I really appreciate your work. As a point of clarification, isn't the TSP S Fund a small cap stock index fund?

[@TheFedCorner]

Hi John, glad you enjoyed. The S fund is technically a completion total stock market index looking to replicate the Dow Jones, but it does indeed contain a significant amount of small cap stocks. -TG

[@rogerdoger9939]

@@TheFedCorner Coming from someone trying to educate people, this is a poorly written response. When you say "Dow Jones" the average person is going to thing the Dow 30. From the TSP website: The S Fund's investment objective is to match the performance of the Dow Jones U.S. Completion Total Stock Market Index, a broad market index made up of stocks of small-to-medium U.S. companies not included in the S&P 500 Index.

[@johnchastain4351]

I use the life cycle funds in a ladder format. I use L2030, L2025, and L. I plan on moving money up the ladder as time goes on. So after 2025 it will be L2035, L2030, and L. I also keep a minimum of 20% in G and 20% in C.

[@TheFedCorner]

Thanks for sharing that! Glad you're staying on top of it!

[@rogerdoger9939]

I don't understand what you are trying to accomplish with this. Why not use an L fund that has the mix you want? Or make your own mix?

[@CumminsTurbo4]

I agree ​@@rogerdoger9939

[@Ryan-lm9mo]

What would happen if I also have Roth outside of TSP Roth? Like if I max 6k on an outside brokerage what happens to my ROTH TSP??

[@TheFedCorner]

Hi there, nothing happens to your Roth TSP, you can continue to contribute to your Roth TSP. You should just make sure you're still eligible for Roth IRA contributions as that changes as income rises.

[@alrocky]

You may contribute *$6,500* to Roth IRA

[@edwardsinchuk8199]

50%S 50%C. For the last 20 years. Even though market getting hammered lately will never change percentages

[@TheFedCorner]

Can work for those with a lot of time, but it may be too aggressive for those coming up to retirement. Thanks for tuning in!

[@PracticalPostMan_FLA]

This is what i been doing for 4 years and i feel like my money is growing pretty slow. I’ve been doing 10% but considering going up to 15% of my check.

[@gixxer4629]

Postman, I’ve been in the L240 retiring in 2031. Account grew 18% last year, trust the process.

[@user-tz5uq2bt1s]

Why would you decrease the c fund when it’s low? Are people really selling low and buying high?

[@TheFedCorner]

Many, many people do. It's easier to stay invested during market volatility before retirement. But once you've realized you no longer have an income and that sequence of returns risk can destroy a portfolio, then it becomes much more difficult to stay invested during times of volatility. That's why having a plan that works to help you meet your goals in all market types is key!

[@axetrops]

If no longer working for federal service but want to keep money in TSP and want to grow it for retirement, what would you recommend for reallocation? 70% C / 20% S / 10% I?

[@TheFedCorner]

Think about what the C, S, and I funds are designed to do. Use them like a tool for your objectives. If growth is your goal, they are growth tools. But this also comes with a high degree of volatility, so make sure you understand this risk. It's hard for me to say more without it counting as advice to you. Hope this helps. -TG

[@axetrops]

@@TheFedCorner Thank you

[@Kep19901]

70%S/30%C

[@nachowny]

i have 300k in the c fund is it a good move to alocate everything today to the g fund ,,, i still have 5yrs to retired

[@TheFedCorner]

Hard to say without knowing your specific financial position. The G fund is designed to protect your wealth from volatility, but it doesn't protect you from inflation and is not good at replenishing your spending once you retire. Hope this helps!

[@jayviermendiola]

If you're content with the money, move it now. I'm rather risky, and would keep all that into the C funds (maybe S & I) for 4.5 years & then move it into G funds.

[@mscottster444]

I’m doing the Warren Buffet strategy. 90%C 10%F.

[@Alucard171]

I just started doing 90%C 10%S

[@louchelada8296]

​@Alucard171 I'm doing that also...how have you done...may I ask

[@mscottster444]

@@louchelada8296 I changed mine up to be 46%C 45%S 9%G. But haven’t haven’t change it since. It follows the rule of 120. I’m 29 years old etc. but mine has done pretty good! I just wanted more diversity than mostly C. But I’m sure it works good though either choice!

[@trojan7933]

Best TSP allocation regardless of age: 70% - C fund 20% - S fund 10% - I fund

[@TheFedCorner]

Whew! Not everyone can stomach that volatility! More power to you!

[@usaqt2]

May I ask why you feel this way? Is it based upon your personal experience or data?

[@alrocky]

@@usaqt2 That's a horrible asset allocation "regardless of age."

[@usaqt2]

@@alrocky thank you. I’m trying to learn more about different investments strategies. I recently heard a coworker talking about putting 50% in C and 50% in S. Any thoughts?

[@alrocky]

@@usaqt2 VOO / VFIAX is S&P 500 = C Fund. VXF / VEXAX is Extended Market Index = S Fund. C/S in ~75%/25% proportion = VTI / VTSAX US Total Stock Market. If you go C/S 50%/50% you'd overweight S Fund. Unless you understand "risk tolerance" you should consider having at least 5-10% in F/G. Perhaps the best strategy is to contribute as much money as your income and budget allows with aim to contribute max of $22,500 year as soon as you can. You should be contributing at least 5% to receive 5% TSP match and hopefully 10 or 15% or more to TSP. Favor contributing to Roth TSP when you're in relatively low tax bracket and favor contributing to traditional TSP when you're in relatively high tax bracket: < $45k is 12% Federal Tax Bracket [Single] and you should favor Roth TSP. $6,500 to Roth IRA is good idea.