Managing Your TSP Account for Retirement

Managing your TSP account for retirement is probably the last thing on your mind at most times. And for people who have the government Thrift Savings Plan’s (TSP), it’s probably not on your mind at all. Even though the TSP only offers you a choice of 5 funds, the benefit factor itself makes the management of the account more important.

Reaching a middle ground will be possible if you divided your retirement funds equally into all of the funds. You will not see any dramatic growth, but you will get some steady upward movement which will help you beat inflation. The problem with such basic, diversified plans is that you might not generate sufficient money to live on when you have retired.

Since you can’t do more than a couple of trades each month in the TSP account, managing retirement means:

tsp account
  • You do not have to spend too much time with it.
  • Just half an hour each month should be more than enough.
  • Shift from one fund to another strictly based on the momentum of each of them.
  • TSP funds can’t be traded on regular stock exchanges. They are private. This means you are going to have to watch ETF’s which resemble the TSP funds closely.

Once you know the symbols you need to watch, or check your performance through your TSP, you can meet objectives by adjusting your holdings. You can focus on diversification or safety or growth and weigh them towards your preference.

There are a number of charting software’s available for this. There are even some free software’s you can try online which give you indications of what’s happening with your funds.

Investment software that is based on analysis can take basic information a few steps further and provide recommendations in seconds which are based not only the movement of funds but also on how they compare with each other and even with the stock market. This analysis, called relative strength, can show you the best performers and even tell you when you should switch funds.

Most investors forget that selling is the only way to make money. You have no gains or profits, until you actually sell one of your funds. Switching funds locks in the profits you have earned and gives you the chance of growing your money even more with the fund which is moving ahead. You might also consider selling from the ‘more’ growth fund and then transfer a part of it or all of it into a stable fund which can beat inflation while keeping your money secure for the future.

Irrespective of how you decide to handle your TSP account, doing nothing and letting the fund rest is barely going to help keep your money at par with inflation. Taking some time out each month can be the difference between enjoying your retirement and getting stressed out with every bill you receive in the mail.

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