Reply to Federal employee, how do you choose your TSP investment?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]NP. I think PP meant FERS.[/quote]

Yes I was talking about the FERS annuity.  When I retire I'll get 42% which is actually close to 50% since there are no payroll taxes out of it.  Then there is social security.  That's 2 separate fixed income retirements.  The idea that I would be using the G fund seems a bit out there.  I can survive the drops in the market.  I won't need to withdrawal at retirement anyway.[/quote]

Just as a real-world example ... by heeding an advisory recommendation to move things out of equity funds prior to the '08 dive, we averted a loss of approx. $170-200k in our TSP account had we left it fully in equities.

With the growth in the account from '09-14, it was up more than $250k in that period.  Losing approx., say, 30% of the growth of $180k plus the actual loss of the $180k that was averted, that is $200k that is in our account today because there was a reallocation to about 55%G in '08 before the big dive.  That's the difference between a $800k TSP balance and a $550k balance = real money to most people.

So it can make a significant difference.  I've been retired for 2 yrs. and won't have to touch the TSP account for years and have other assets so for us it's not so critical, but if your TSP account performance matters, as it does to many, many people, going all in on equities and just riding it out is a proven less than optimal (to put it mildly) way to go.

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