Investing Tips for the Thrift Savings Plan (TSP)

Financial Planning Aubrey Lovegrove

A majority of Thrift Savings Plan participants have a plan when it comes to investment strategies. Participants require only one plan since much of their income from retirement will typically be funded by the government’s version of a 401(k) plan (also known as the TSP). The remaining income treatment is received from their FERS annuity and Social Security if they are already qualified.

An increasing number of employees and retirees made their millions through the old-fashioned manner (from the TSP). Their investment strategies entailed investing the maximum amount in an average of over 29 years during the bull and bear markets in their TSP’s C and S stock funds. During the Great Recession, the participants did not head for their G fund.

A majority of investors takes a long-view through placing most of their money in the stock market through C, S and I funds. Along the way, they may pass through bad times and hope that the market will make them profits over time. Others follow the super-safe way of putting a majority or all of their money in the stable treasury securities G fund that has low-yield. To these participants, the risk is that in a period during the retirement inflation might eat into their nest egg.

There is an increasing number of investors that are willing to take Lifecycle funds that are self-adjusting.

Over time, the investments become a lot more conservative and have less exposure to the vicissitudes of the stock market.  Once the L funds are expanded the following year, they will get more popular with its fund including international companies stocks.


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