Thrift Savings Plan - TSP (credit, taxes, how much, income)

[Mike in TN]

I was too young and stupid when I was in the service to pay attention to the TSP and get in as early as possible.

Now, a little older, little wiser, and with a new federal job, I'm eager to get in.

Which index you do you have your funds in? A mixture, mostly "G", etc.?

Unless convinced otherwise, I'll probably put ~ 90% of my TSP funds in the "G" index.

Can anyone tell me what kind of return they've been receiving in the "G" index? I've heard anywhere from 4.5-7% is typical. I was expecting it to be lower.

Thanks for any input.

[Kalbo]

I have mine in one of life cycle ones 2030. I started late too. To make up for lost time every January when we get a raise I increase my contribution by 2%. I have also been told that if you contribute 10% of your pay you will not take an income hit because it will reduce the amount of taxes taken out of your paycheck and it will balance out.

[Nauticadon]

I have mine tied up in life cycle funds as well. The G makes sense in these financial times but it's too conservative for me and I wanted a little more market exposure.

[BucFan]

tsp has a site that gives returns TSP: History Monthly Rates of Return Summary; 2009 Jan 30 (http://www.tsp.gov/rates/history-summary.html - broken link). Which fund you use depends on your tolerance to risk, how much time you have left before you'll need the funds, and how much optimism you have toward the economic future. Historically the market gains over time, so if you're not dollar-cost-averaging into the American or internatation stock funds, you may be missing bargains.

[dmarie123]

Mike, I have a small amount of mine in G. I earned like 2% last year on that. The rest I have in I and S. I was earning like 10%, but over the year I lost 1/3 of my money. Yikes! I'm not moving it though because I think what goes down must come up. I can leave it there for the next 20 years, so no worries on my part.

[alexei27]

There is a lot of talk about how now is the time to plug money into the higher risk funds because they price has dropped so far...and they are "on sale". You'd think over the long term...that would be right. The L2040 shares are ~10-11$ a share. They were over $20 last year!! At some point they will be $20 again on they way back up.

If you are young...put as much into it as you can.

[Poncho_NM]

Current valid URL for the site: Thrift Savings Plan

[stoutboy]

I am primarily in C, S and I. Only about 12% in I because it does not have emerging markets. I think you'd be best advised to find the Lifecycle fund that most closely corresponds to your target retirement date, rather than keep everything in G.

[SluggoF16]

I have spread it out among C, F, G, I and L. I lost a fair amount in 2008 because I had about half in C fund. Right before the US credit was downgraded I moved it out of C (again) and didn't lose anything, then moved it back in as S&P started up again. Last week I moved it out of C and into L and G, and once the politics are resolved it will go back into C. It's very important to look at the performance of each fund at least monthly and watch how the funds are going, as opposed to getting those statements in the mail. I've been told that L 2020 or L Life are the better bets right now. G has a pretty solid return of around 5-6%, which may or may not keep pace with inflation, although it has for the past few years. I knew someone who put ALL of his into C fund and made tons from 1997-2000 and again from about 2003-2008. However, his all-in-one-basket approach made him vulnerable to loss and he did in fact lose literally tens or even hundreds of thousands of dollars both times.

[Iggier]

Mine is an equal split of 25% each G, C, S and I. My 12-month PIP is 16.22%, for whatever that's worth .