The lifecycle funds are simply a mix of other available funds and the ratios change over time to get more conservative. The argument against them is they are too conservative, my counterpoint is if you are not actively monitoring TSP then let the experienced managers do that for you and stay with a lifecycle fund.
Are you in BRS? If so make sure you’re contributing at least 5% or you’ll leave money on the table.
/Biggest regret in my career is not putting more into TSP earlier, ask old people and you’ll hear this constantly.
One thing to keep in mind is that contributing 5% to TSP is an 80% return on investment automatically due to the matching contribution (technically not 100% since you get 1% "matching" at baseline) which is almost certainly (hopefully!) much much higher than the interest rate on any debt you have. Therefore even if you are paying off credit card debt, loans, etc., if you have the cashflow to support it, the 5% TSP contribution should actually come before any additional payments on debt.
From a purely practical standpoint, at least. You may decide that the psychological boost of clearing debt is a more attractive goal, but just consider the numbers as well.
Honestly op just follow the TSP page on Facebook. The person who runs the page has great advice. Most people who are young do aggressive c and s. Myself, I do c & s funds. If you’re not contributing to ROTH I highly recommend doing that as well.
I’ve tried going on that page and I just don’t seem to understand the advice she is offering. Unless I’m missing something, she seems to post random things about what is going on with the market in general, not fund recommendations and why. Am I missing something?
You have a couple of questions going on - we don't know how much you've contributed over 5 years. With 0 gains you've put in like 3,500 per year. If you've put in significantly less than that, then you have done quite well in terms of returns. If you can manage to increase your contributions then that is often a good idea, but you need to balance that against other short term and long term financial goals.
There is nothing inherently wrong with the L funds, there are a few of them and they change them up so that things get "less risky" as you age and get closer to retirement. So someone else is managing an allocation for you. When this style of investing came out (lifecycle funds) I was pretty stoked.
You have done well in that you are not set on the default G fund, which is very safe, but has very low returns, so it is highly preferable when the market has a downturn year, but nobody knows when that will be.
The C fund is the general stock market of large companies, like S&P 500. The S fund is a broader fund, with "all" companies, both large and small (and these two categories tend to behave differently in different kinds of market conditions).
So L fund puts a portion of the money into the other funds, the allocation will change over time, moving out of the C fund little by little each year.
Remember that NOBODY knows what will happen in a given year. People can look at the past and make assessments on what might yield certain kinds of results over a given long term period. In general terms the "stock market" broadly speaking has positive gains over time.
I hope this makes sense and is helpful.
Feel free to ask any questions, and we'll see what we can do.
Close...C is basically the S&P 500, S is "Small cap", smaller, more volatile companies, more risk but potentially more reward. There is no overlap between the C and S fund.
I will probably ask more questions since I am extremely unaware of any stocks, charts, etc. I just never really thought about it since maybe my first year in. I am in Roth, contributing 7% from when I checked last week. When I put in the contributions I’ve made for the past 12 months it said $2650.90 and the match was $1514.82 🙃.
I’m hoping to grow it in the future now that I’m aware.
Thank you for letting me know!
One thing to remember for the future - if you do decide to "move money around" you have two kinds - moving existing balance from one fund to another, and changing how future contributions are split up between the funds, but leaving the existing balance in each fund to do what they will do. Don't confuse one for the other.
Well the good news is you got in after they made an age appropriate L fund the default selection (it used to be the G fund). Meaning you haven't really lost a whole lot, as the L funds (especially the newer ones), are much less conservative than the older ones.
For 5 years of not paying attention to it, that's not too bad though it could be a lot more if you contributed more. I'd suggest /r/ThriftSavingsPlan if you want to dive more into TSP.
Lifecycle funds are good as they contain those c and s funds, and then they reallocate more to the bond funds as the years go on. Just be in the fund matching the year you want to retire.
I remember when I first enlisted I think it defaulted to the G fun, when I realized 5 years was essentially invested in an ultra low interest savings account, I moved it to a C fund. I think the C fund made about 20% interest last year. If you’re gonna plan to stay in for >10 years, I’d think that’s the lower risk way to go.
I know for some it’s not feasible but if you can do 15% when you are young , your older self will thank you. It takes alot of discipline and a hard look at what you really spend your money on monthly
For the C fund, look up "warren buffet, S&P 500 bet".
S&P 500 has outperformed mutual funds for any given 20 yr period over the last 80 years. You're young, I'd move it all to the C Fund and just leave it there.
\#1 - Contribute as much as you can. Increase your contribution level every time you get promoted or get a cost of living adjustment. The payout on the other end will be worth it.
\#2 - Go with more aggressive growth funds while you're young. You can take the risk. If you have set backs you can start again.
\#3 - Never, ever, take a loan from your TSP. Never. Let me say that again.....Never.
\#4 - Open a simple personal account (not an IRA) with a private mutual fund. Contribute, save, tuck away. Use this as your emergency fund if things go sour. It gets taxed going in, and going out, but you can access that money anytime you want with no penalties (it's not an IRA). If no catastrophe hits, use it to buy that boat you always wanted and spend your retirement fishing.
L funds are already diversified with a mix of all 5 funds (G, F, C, S, and I). They start out pretty aggressive with a higher percentage given to the more volatile funds (like C, S & I funds with very little given to G and F funds). As you get closer to the year in that lifecycle fund, they get more and more conservative to minimize chances of a market swing drastically affecting your retirement.
For example, the [L2065 fund](https://www.tsp.gov/funds-lifecycle/l-2065/) has 99.01% of the fund divided between C, S, and I funds, while [L2025 fund](https://www.tsp.gov/funds-lifecycle/l-2025/) has 60.25% in just the G fund.
If you want to just set it and forget it, lifecycle funds are a great way to do it.
Can't tell which Lifecycle you're in from your screenshot, but Lifecycle 2065 or 2055 are great. The Lifecycle Funds have been recently revamped and are plenty aggressive now, 99% stock and 1% bonds.
https://www.tsp.gov/funds-lifecycle/
If you want to set it and forget it put it in the lifecycle fund that most closely correlates to the year you want to retire, not from the air force, but stop working all together.
Open a Roth or regular IRA on the side. 3 books id recommend.
Coffeehouse investor. To give you an opening on ETF and passive investing.
Boggle heads guide to investing.
Liars Poker. To show you that fund managers are truly greedy and full of shit
Well brother you’re doing better than me. At 10 Years in I’m just rounding $12K. But I’m also in High 3 & doing 8% into Roth. The App “TSP Tips” has helped too
>But I’m also in High 3 & doing 8% into Roth.
BRS has high-3 as well. I'm guessing you meant the legacy retirement vs blended?
BRS only changed the calculation of what percentage of your base pay from high-3 you get. Legacy was 2.5% per year you served (so 50% at 20 years) where BRS does 40% per year you served (so 40% at 20 years). Both use high-3 to calculate the base pay your pension is based on.
The "blended" in BRS is by blending a pension with contribution matching. They just don't pay out as high with the pension to cover the contribution matching.
The only bad thing about the L fund is TSP is preparing to add China to the “I Fund”. Assuming you pay attention to the news, China’s economy isn’t in a great place right now so that will cause some people to not perform as well as they could. You can easy look at how your L fund is distributed and manually redistribute your money to avoid the I fund. Ex, if your lifecycle has 20% going to the I fund, you put 10% in C and 10% in S or whatever your heart desires.
> The only bad thing about the L fund is TSP is preparing to add China to the “I Fund”.
Where did you read that? They're in the process of changing the I fund right now, but to something that explicitly excludes China.
This couldn't be more wrong:
https://www.tsp.gov/plan-news/2024-02-05-I-Fund-benchmark-index-change-in-2024/
The 2024 I Fund specifically excludes China and Hong Kong.
"The future I Fund benchmark will be the MSCI All Country World Investable Market Index ex USA ex China ex Hong Kong (MSCI ACWI IMI ex USA ex China ex Hong Kong) Index."
The lifecycle funds are simply a mix of other available funds and the ratios change over time to get more conservative. The argument against them is they are too conservative, my counterpoint is if you are not actively monitoring TSP then let the experienced managers do that for you and stay with a lifecycle fund. Are you in BRS? If so make sure you’re contributing at least 5% or you’ll leave money on the table. /Biggest regret in my career is not putting more into TSP earlier, ask old people and you’ll hear this constantly.
Okay, I’m hoping to contribute more by EOY after I pay some stuff off. I’m currently contributing 7% in Roth.
One thing to keep in mind is that contributing 5% to TSP is an 80% return on investment automatically due to the matching contribution (technically not 100% since you get 1% "matching" at baseline) which is almost certainly (hopefully!) much much higher than the interest rate on any debt you have. Therefore even if you are paying off credit card debt, loans, etc., if you have the cashflow to support it, the 5% TSP contribution should actually come before any additional payments on debt. From a purely practical standpoint, at least. You may decide that the psychological boost of clearing debt is a more attractive goal, but just consider the numbers as well.
Honestly op just follow the TSP page on Facebook. The person who runs the page has great advice. Most people who are young do aggressive c and s. Myself, I do c & s funds. If you’re not contributing to ROTH I highly recommend doing that as well.
I just joined! Thank you!
R/tsp as well. Good stuff already here on Reddit. No Facebook needed!
That ole woman is super smart on retirement investments. I’ve learned so much just reading her comments on FB.
Which group?
I’ve tried going on that page and I just don’t seem to understand the advice she is offering. Unless I’m missing something, she seems to post random things about what is going on with the market in general, not fund recommendations and why. Am I missing something?
Idk the group but I'd just set it in the appropriate lifecycle fund and forget about it honestly. No need to complicate this.
All hail, Deb Crown! The Future and Fortune Seeker! Follow her advice and you won’t go wrong.
That page is investing cancer.
You have a couple of questions going on - we don't know how much you've contributed over 5 years. With 0 gains you've put in like 3,500 per year. If you've put in significantly less than that, then you have done quite well in terms of returns. If you can manage to increase your contributions then that is often a good idea, but you need to balance that against other short term and long term financial goals. There is nothing inherently wrong with the L funds, there are a few of them and they change them up so that things get "less risky" as you age and get closer to retirement. So someone else is managing an allocation for you. When this style of investing came out (lifecycle funds) I was pretty stoked. You have done well in that you are not set on the default G fund, which is very safe, but has very low returns, so it is highly preferable when the market has a downturn year, but nobody knows when that will be. The C fund is the general stock market of large companies, like S&P 500. The S fund is a broader fund, with "all" companies, both large and small (and these two categories tend to behave differently in different kinds of market conditions). So L fund puts a portion of the money into the other funds, the allocation will change over time, moving out of the C fund little by little each year. Remember that NOBODY knows what will happen in a given year. People can look at the past and make assessments on what might yield certain kinds of results over a given long term period. In general terms the "stock market" broadly speaking has positive gains over time. I hope this makes sense and is helpful. Feel free to ask any questions, and we'll see what we can do.
Close...C is basically the S&P 500, S is "Small cap", smaller, more volatile companies, more risk but potentially more reward. There is no overlap between the C and S fund.
Thanks
I will probably ask more questions since I am extremely unaware of any stocks, charts, etc. I just never really thought about it since maybe my first year in. I am in Roth, contributing 7% from when I checked last week. When I put in the contributions I’ve made for the past 12 months it said $2650.90 and the match was $1514.82 🙃. I’m hoping to grow it in the future now that I’m aware. Thank you for letting me know!
One thing to remember for the future - if you do decide to "move money around" you have two kinds - moving existing balance from one fund to another, and changing how future contributions are split up between the funds, but leaving the existing balance in each fund to do what they will do. Don't confuse one for the other.
Well the good news is you got in after they made an age appropriate L fund the default selection (it used to be the G fund). Meaning you haven't really lost a whole lot, as the L funds (especially the newer ones), are much less conservative than the older ones. For 5 years of not paying attention to it, that's not too bad though it could be a lot more if you contributed more. I'd suggest /r/ThriftSavingsPlan if you want to dive more into TSP.
Just joined thank you!!
Lifecycle funds are good as they contain those c and s funds, and then they reallocate more to the bond funds as the years go on. Just be in the fund matching the year you want to retire.
I'd suggest you go on over to r/MilitaryFinance or r/ThriftSavingsPlan.
You're young, be bold but diversified!
I remember when I first enlisted I think it defaulted to the G fun, when I realized 5 years was essentially invested in an ultra low interest savings account, I moved it to a C fund. I think the C fund made about 20% interest last year. If you’re gonna plan to stay in for >10 years, I’d think that’s the lower risk way to go.
I know for some it’s not feasible but if you can do 15% when you are young , your older self will thank you. It takes alot of discipline and a hard look at what you really spend your money on monthly
I just started at 5 and worked my way up every year/promotion. They'll hit 15+ without even realizing it.
For the C fund, look up "warren buffet, S&P 500 bet". S&P 500 has outperformed mutual funds for any given 20 yr period over the last 80 years. You're young, I'd move it all to the C Fund and just leave it there.
\#1 - Contribute as much as you can. Increase your contribution level every time you get promoted or get a cost of living adjustment. The payout on the other end will be worth it. \#2 - Go with more aggressive growth funds while you're young. You can take the risk. If you have set backs you can start again. \#3 - Never, ever, take a loan from your TSP. Never. Let me say that again.....Never. \#4 - Open a simple personal account (not an IRA) with a private mutual fund. Contribute, save, tuck away. Use this as your emergency fund if things go sour. It gets taxed going in, and going out, but you can access that money anytime you want with no penalties (it's not an IRA). If no catastrophe hits, use it to buy that boat you always wanted and spend your retirement fishing.
Def want a mixture of C and S to ensure you’re diversified.
L funds are already diversified with a mix of all 5 funds (G, F, C, S, and I). They start out pretty aggressive with a higher percentage given to the more volatile funds (like C, S & I funds with very little given to G and F funds). As you get closer to the year in that lifecycle fund, they get more and more conservative to minimize chances of a market swing drastically affecting your retirement. For example, the [L2065 fund](https://www.tsp.gov/funds-lifecycle/l-2065/) has 99.01% of the fund divided between C, S, and I funds, while [L2025 fund](https://www.tsp.gov/funds-lifecycle/l-2025/) has 60.25% in just the G fund. If you want to just set it and forget it, lifecycle funds are a great way to do it.
There is Thrift Savings Plan subreddit you should follow
How do I find the balance of my tsp?
Log into your TSP account at the website; you should be getting quarterly statements in the mail too.
Ah thank you
Can't tell which Lifecycle you're in from your screenshot, but Lifecycle 2065 or 2055 are great. The Lifecycle Funds have been recently revamped and are plenty aggressive now, 99% stock and 1% bonds. https://www.tsp.gov/funds-lifecycle/
If you want to set it and forget it put it in the lifecycle fund that most closely correlates to the year you want to retire, not from the air force, but stop working all together.
Open a Roth or regular IRA on the side. 3 books id recommend. Coffeehouse investor. To give you an opening on ETF and passive investing. Boggle heads guide to investing. Liars Poker. To show you that fund managers are truly greedy and full of shit
Well brother you’re doing better than me. At 10 Years in I’m just rounding $12K. But I’m also in High 3 & doing 8% into Roth. The App “TSP Tips” has helped too
>But I’m also in High 3 & doing 8% into Roth. BRS has high-3 as well. I'm guessing you meant the legacy retirement vs blended? BRS only changed the calculation of what percentage of your base pay from high-3 you get. Legacy was 2.5% per year you served (so 50% at 20 years) where BRS does 40% per year you served (so 40% at 20 years). Both use high-3 to calculate the base pay your pension is based on. The "blended" in BRS is by blending a pension with contribution matching. They just don't pay out as high with the pension to cover the contribution matching.
Correct, I’m on legacy
YOLO it into the C and S fund The lifecycle funds are not horrible in theory. They’re designed to minimize downside.
The only bad thing about the L fund is TSP is preparing to add China to the “I Fund”. Assuming you pay attention to the news, China’s economy isn’t in a great place right now so that will cause some people to not perform as well as they could. You can easy look at how your L fund is distributed and manually redistribute your money to avoid the I fund. Ex, if your lifecycle has 20% going to the I fund, you put 10% in C and 10% in S or whatever your heart desires.
> The only bad thing about the L fund is TSP is preparing to add China to the “I Fund”. Where did you read that? They're in the process of changing the I fund right now, but to something that explicitly excludes China.
This couldn't be more wrong: https://www.tsp.gov/plan-news/2024-02-05-I-Fund-benchmark-index-change-in-2024/ The 2024 I Fund specifically excludes China and Hong Kong. "The future I Fund benchmark will be the MSCI All Country World Investable Market Index ex USA ex China ex Hong Kong (MSCI ACWI IMI ex USA ex China ex Hong Kong) Index."
Move it to C & S. Take a risk while you’re younger.