What funds to invest into during the year 2020

[hazard1]

I am an E-2 in the army and I want to get the most out of my retirement, however, I don’t know much about the TSP and their funds. I currently have invested 100% to L 2050 by default and 3% of my base pay to Traditional TSP. I want to know how much of a percentage I should invest into the other funds like G,F,C,S and I. Also, if I should invest a higher percentage on the Traditional or Roth TSP?

 

[pridedixie]

@hazard1 If you don’t know much about investing, stick with the L2050 fund rather than any of the individual funds. It is run by experts who know more than 99% of people using TSP. Once you start learning about what the individual funds are, then you should consider making decisions about being more aggressive than the L2050 fund.

Since you are an E-2, you are probably going to be in a lower tax bracket right now compared to when you will be using your TSP funds in retirement. For that reason, I would recommend contributing to Roth rather than traditional. Keep in mind that even if you contribute to Roth, your matching Service contributions will go to Traditional.

 

[julian246]

@pridedixie To add to this great advice, increase your TSP contribution to 5% at a minimum. You won’t get the full match until 2 years in service (I believe) but it’s better to do it now than try and remember to do it down the road. You’ll never miss the money you never see.

 

[jjenkins8]

@julian246 The not getting full match until 2 years of service thing is a myth. You get the full match immediately but the 1% automatic contribution isn't VESTED until two years of service...

 

[darrah]

@pridedixie Fantastic advice.

Only thing I'll add is to bump up that contribution to whatever you can afford. Is 15% achievable? More?