2015 TSP Allocation thoughts

THE THRIFT SAVINGS PLAN ALLOCATION GUIDE Forums Message Board 2015 TSP Allocation thoughts

This topic contains 9 replies, has 5 voices, and was last updated by  Joe Warner 3 years, 5 months ago.

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  • #14892

    dougyfresh
    Participant

    So what are folks thinking about is the best allocation for 2015?

    Personally, I am about 15 to 20 years out from retirement. I tend to be an aggressive investor. I am currently allocated something like this for the past couple of years:
    G Fund = 10%
    F Fund = 15%
    C Fund = 50%
    S Fund = 15%
    I Fund = 10%

    I feel like pulling back on the F & G fund a little. What do you think?

    #14914

    DanDan
    Participant

    I would personally say it all depends on what kind of volatility you feel comfortable with.

    Being on this site im sure you see Paul is 100% S-fund. My personal belief is I don’t know what phase we are in now, but I believe we will be heading to the mature phase if we are not there already.

    My personal allocation is 60/40 C/S fund. Speaking in general, im guessing we have around 10-15 years until another downturn. I anticipate the C fund will be performing well in 2015.

    In the past the S fund has historically outperformed any. This is why im a 60/40 kinda guy, cuz i don’t have a crystal ball.

    All i know is during this mature phase time frame in 2015; i personally see no reason to leverage the G-fund at all….and i agree with Pauls thoughts on the I-fund….to risky for my blood. Knowing i said that now in 2015 it will outperform all, so make your choice as you desire! Good luck in 2015!

    #14918

    dougyfresh

    Sounds like sound advice. Thanks for the input.

    #15275

    Pete

    I can retire now, however I can stay 5 more years before I mandatory. I am currently in L 2020 and have over 400K. I would like to make a more before I retire. Your thoughts

    #15298

    gr8nole
    Participant

    Timing the market never works but there are indicators that help your odds and takes little time. Moving averages of the S&P can indicate market direction and sometimes its just certain months. Case in point. December. Markets (historcially) are always better than average in December. I go heavy in F in January, March and August and pretty much heavy in C&S the rest of the year.

    #15447

    rolfeskj

    Right now I am currently 50/50 with C and S funds. It seems like the S fund has slowed down alot and is at the same level it was 6 months ago. I am not sure what 2015 will bring but I cant imagin that it will be 10-15 years before another downturn. It was only seven years between the 2001 downturn and 2008 so I could see one coming in the next 1-3 years if war breaks out or the school loan bubble bursts, etc. Now if I could just time it.

    Pete, if you are retireing in 5 years you should be conservitive with your investments. Unless you can retire and now draw on the money right away if the market has downturned in 5 years. If you want to get a bit more aggressive you could always switch from L2020 to L2030 for a few years.

    #15530

    Pete

    gr8nole and rolfeskj thank you for your input. I just want to make sure I’m being smart.

    #16293

    Brad

    Any thoughts on the new policy of automatic enrollments being directed to age appropriate lifecycle funds and the effect on share prices? As many enroll and then never take the time to change allocations apparently about a third as mentioned in an earlier post. Based on current share pricing could this cause a rise in the l funds?

    #16314

    TS Paul
    Keymaster

    I can’t imagine that it will have any measurable effect. As much as we think of the Thrift Savings Plan as being huge, the whole thing is just a drop in the lake compared to the many trillions of dollars sloshing around in the world’s stock markets. The addition of a few new FERS employees a month making a small contribution to the TSP I Fund won’t have any impact at all.

    We did a thought experiment a while back about whether or not we could move the market if every Thrift Savings Plan participant who follows me sold all of their stock funds and moved to the G Fund in the same day. Our conclusion after we played with the numbers was that nobody would even notice, the numbers in the real stock market are just way too big.

    The TSP Allocation Guide www.TSPallocation.com

    #17278

    Joe Warner

    Pete, if you are in CSRS 50 years will increase your annuity by about $12,000 and if your in FERS about $6600. That is roughly.

    Stock performance in the TSP could be anywhere from -10% to 50% over those 5 years; though the probability of being positive is high. You can set up your own Monte-Carlo algorithm in Excel (not too hard) and see what the outcome will be. The most likely outcome is that you will be able to initially take another $8000 plus a year out of the TSP if you begin with 4% disbursement now and in 5 years.

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