What is the best fund allocation for TSP? (2024)

What is the best fund allocation for TSP?

Your best bet is to stick with the C, S and I Funds. Here's the ratio we recommend for your portfolio: 80% in the C Fund, which is tied to the performance of the S&P 500. 10% in the S Fund, which includes stocks from small- to mid-sized companies that offer high risk and high return.

What is the best allocation of TSP funds?

How much should I allocate to TSP?

There is no such thing as too much money in the Thrift Savings Plan. If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire.

What is the recommended TSP allocation by age?

Here are some general guidelines for asset allocation based on age: 20s-30s: 70-80% stocks, 20-30% bonds. 40s-50s: 50-60% stocks, 40-50% bonds. 60s and beyond: 30-40% stocks, 60-70% bonds.

How do I allocate my TSP account?

TSP Allocation

Deciding on the asset allocation of your TSP means you pick how much of your money you want to invest in each of those three. For example, you can put 70% of your money in stock and 30% in bonds or 60% in stock and 30% in bonds, and 10% in cash equivalents.

What is the most aggressive fund for TSP?

The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.

Which TSP should I choose?

Specifically, a traditional TSP is better if you want to leverage your account to decrease your current income taxes and pay for withdrawals during retirement. This choice is particularly advantageous if you think you'll have lower taxes in retirement or think tax regulations will be in your favor later in life.

What does Dave Ramsey recommend for TSP?

Dave Ramsey's advice is to save 5% into the TSP to get the full match, then max out a Roth IRA, and then put more into the TSP if you are able to save more after that.

When should I change my TSP allocation for 2024?

You may enroll in the TSP program or make contribution changes at any time; however, if you wish for your contribution deductions to begin the first pay date in 2024, you must make your TSP election effective for pay period 26 (December 17, 2023, through December 30, 2023), which has a pay date of January 8, 2024.

Can you put in too much money in TSP?

If you work for more than one employer in the same calendar year, it's possible to contribute too much and exceed the IRS limits. If you over contribute, you may request a refund of the excess amount from the TSP. For a limited in January each year, we make the Refund Request Form available.

What is a good portfolio mix?

Many financial advisors recommend a 60/40 asset allocation between stocks and fixed income to take advantage of growth while keeping up your defenses.

How should I allocate my portfolio?

The conservative allocation is composed of 15% large-cap stocks, 5% international stocks, 50% bonds and 30% cash investments. The moderately conservative allocation is 25% large-cap stocks, 5% small-cap stocks, 10% international stocks, 50% bonds and 10% cash investments.

Should I move my TSP to G fund?

If you choose to invest in the G Fund, you are placing a higher priority on the stability and preservation of your money than on the opportunity to potentially achieve greater long-term growth in your account through investment in the other TSP funds.

How do I diversify my TSP portfolio?

Diversification for Stability:

Retirees should consider spreading their TSP contributions across various asset classes, such as the G Fund for stability, F Fund for bonds, and C, S, and I Funds for growth. A well-diversified portfolio helps mitigate risks and ensures a steady income stream during retirement.

How often can I change TSP allocations?

Reallocations and fund transfers are limited. Each calendar month, you can use your first two reallocations or fund transfers to redistribute money in your account among any of the TSP funds. After the first two of either transaction type, you can only move money into the G Fund.

How to become a millionaire with TSP?

TSP contributions and investing should be top of mind when you begin your federal career. An employee who earns 50,000 per year and contributes 2,500 dollars with a 2,500-dollar match from the government can reach the TSP millionaire dollar mark in 25-30 years by investing aggressively.

What is the most conservative TSP fund?

However, the L Income Fund is the most conservative of the L Funds. It focuses on money preservation while providing a small exposure to the riskier funds (C, S, and I Funds) in order to reduce inflation's effect on your purchasing power.

How much should I have in my TSP at 40?

Age 40—three times annual salary. Age 45—four times annual salary. Age 50—five times annual salary. Age 55—six times annual salary.

Why is Roth TSP better?

With Roth TSP, your contributions go into the TSP after tax withholding. That means you pay taxes on your contributions at your current income tax rate. The advantage of the Roth TSP is that you won't pay taxes later when you take out your contributions and any qualified earnings.

Is it better to have TSP or IRA?

Basically, your agency will contribute money into your TSP account based on how much you are contributing. There is no match when you invest in an IRA. Another big difference between the TSP and IRAs is how much you can contribute every year. As of 2021, you can invest significantly more into the TSP compared to IRAs.

What is the difference between the TSP C fund and the S fund?

Core TSP Funds

The money participants place in the F and C Funds is invested in separate accounts, while the S and I Fund monies are invested in trust funds commingled with other tax-exempt pension and endowment funds.

What percentage of TSP investors are millionaires?

Currently, about 1.4% of TSP participants have portfolios worth a million dollars or more. As of March 31, 2021, the number of participants with at least a million dollars in their TSP accounts increased to 84,808 from 27,212 the prior year.

What is the recommended asset allocation for a 60 year old?

You may have heard of age-based asset allocation guidelines like the Rule of 100 and Rule of 110. The Rule of 100 determines the percentage of stocks you should hold by subtracting your age from 100. If you are 60, for example, the Rule of 100 advises holding 40% of your portfolio in stocks.

How do you double your TSP?

Maybe you got a pay raise or just paid off your car. Take a piece of that extra money to put it in the TSP. By doing this consistently overtime, you will be at the max before you know it. The second component in doubling your TSP is the growth that comes from your investments.

How to max TSP 2024?

To contribute the 2024 maximum annual amount for both regular TSP and TSP Catch-up for a combined total of $30,500, you should enter one election amount of $1,174 into myPay during December 3 – 9, 2023, and your election should be effective on December 17, 2023, the first pay period for 2024.