Advice on TSP

[resjudicata]

@marezee61 You should be at least 80% in the C fund at your age. Frankly, you should be 100% in the C fund and forget about all the rest until you are closer to retiring.

You can outperform all the other funds by diversifying a percentage of your retirement savings outside of the TSP, with a similar risk profile.

 

[everyman]

@resjudicata 100% C fund is the way to riches, especially if you have tons of time.

 

[marezee61]

@everyman Thanks so much! Do either of you know how me going reserves will affect my contributions by any chance?

 

[peterku]

@marezee61 The only change is the amount (new contributions) that you will be putting in. Drill pay vs active pay amounts, but you will still keep what you have and be able to add to it. I second the just put it in C Fund (S&P 500 basically) and forget about it. Worry more about how much you can put into the investment than trying to chase a certain percentage in each.

 

[everyman]

@marezee61 I don't, sorry!

 

[peter_aka_00avenger00]

@everyman 68% C, 32% UOPIX is the way to riches

 

[peter_aka_00avenger00]

@marezee61 100% C fund

 

[raptorteatime]

@marezee61 I’m 22 O-1 but running 72% C, 18% S, 10% I. I would recommend going 0% G and splitting up between C and S funds. If it’s too difficult trying to process allocations, there’s absolutely nothing wrong with going 100% into one of the L funds.

 

[yorkslad]

@marezee61 As other have said, lose the G fund.

It’s up to you to determine how aggressive or diversified you want to be, but I’d go something like 70/15/15 C/S/I or even 80/20 C/S. C fund returns are historically better than S, but past performance does not guarantee future returns.

 

[sbschristianmedia]

@marezee61 In addition to your TSP, Open up a Roth ira. There is a book you can borrow from your local library. The Little Book of Common Sense Investing by John Bogle. This book was written for beginner investors to invest in broad market ETFs like VOO or VTI for their simplicity. Just set it and forget it especially during market corrections until you retire. Broad market ETFs for the win.

VOO is equivalent to 100% C Fund in the tsp. VTI is equivalent to 80% C fund and 20% S fund in the tsp.

Thank you for your service, from a Navy vet.

 

[nothinges]

@marezee61

Current shares: 51% L, 18% G, 10% C, 10% S, 11% I

Either go all L 2065, or invest in an appropriate allocation for your age. Since you're asking, go all L until you catch up on required reading.

Many people don't like TSP's I because it excludes emerging markets (Russia/China/India). I personally don't like international funds at all and believe it's faux diversification.

You're likely to have a lot of people say that 18% G is bad for 26. That was true in the 2010s with quantitative easing near zero interest rates; at 5.5% interest holding some G or F is fine.

 

[marezee61]

@nothinges Thanks so much!! I appreciate the input! & do you know how me going reserves will affect my contributions at all by any chance?

 

[godexists]

@marezee61 Yes. Take your % contribution and do the calculation on your base pay.

Example:
E5 over 6 years earns $114.13 per day (point). 20% contribution, .2*114.13 = $22.83. Multiply by 4 for a drill weekend = $91.30

 

[marezee61]

@godexists You are a god send, thank you!

 

[godexists]

@marezee61 Sure thing. Glad to help.

 

[meredithhww]

@marezee61 L funds are already diversified between C/S/I/G/F. Having an L fund and diversifying how you are is redundant. The purpose of using the L fund is to follow a glide path along "the efficient frontier". Holding different funds puts that out of wack. If you're doing that deliberately that's fine, as long as you understand what you're doing as and why.