Hi -I’m new to this site and have enjoyed reading your articles. I’m retired (CSRS) but still maintain my TSP account due to low expenses. I have always wondered if CSRS employees/retirees should have a more aggressive approach to TSP investing because of their more substantial pensions. The TSP makes up a huge part of a FERS employee’s retirement plan, therefore, may lead to a more cautious strategy by many.
Your business cycle based strategy has reinforced my opinion that I have adopted a too conservative approach to my own investment. Does your strategy trump any differences between the retirement plans? Do you make any concessions/allowances for some diversification in the five funds for retirees/near retirees?
I don’t see any real difference in investing strategies between CSRS and FERS participants. There is risk in all of the Thrift Savings Plan funds with the exception of the TSP G Fund, so if I were trying to be more conservative I suppose I would park some money in that. I don’t see my approach as being riskier than a more “diversified” bucket of the other TSP funds – it may be more volatile over a short or medium term period of time, but in the long term it will likely generate higher returns.