TSP roadmap: When (if ever) should you play it ‘safe?’

The good news headline is that membership in the Thrift Savings Plans’ Millionaires Club has jumped to 98,879 and is still climbing. Equally good, most of the seven-figure clubbers aren’t wealthy lawyers turned federal judges. Or political appointees or members of Congress. Most are ordinary, upper income feds who’ve been investing for around 30%. Most maxed out their contributions to get the magical government 5% match. And most had most or all of their money...

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The good news headline is that membership in the Thrift Savings Plans’ Millionaires Club has jumped to 98,879 and is still climbing. Equally good, most of the seven-figure clubbers aren’t wealthy lawyers turned federal judges. Or political appointees or members of Congress. Most are ordinary, upper income feds who’ve been investing for around 30%. Most maxed out their contributions to get the magical government 5% match. And most had most or all of their money in the stock indexed C, S and I funds. And left it there and continued to buy those funds when the market crashed in ’08-’09.

The sub-headline is that there about six million current and retired feds who are NOT millionaires. But many are on the verge. Checkout where you stand as of June 30, 2021:

When it comes to asset allocations (as of June 30) investors had $207.9 billion (or 26.9%) of their money in the G-fund (treasury securities) and $238.1 billion (30.8%) in the C fund, which tracks the S&P 500.

Many feds consider the G fund (Treasury securities) as the safe investment because they never have a negative return. Critics point out that the G-fund hasn’t, for years, had a good return either. In fact it is mostly outperformed by the F fund (bonds) which as of now has a negative return.

So is it safe to put your retirement nest egg in the never-has-a-bad-day (or many good days) G fund? Or go for the stock index or L funds which go up and down but mostly up in recent years?

Financial planner Arthur Stein has definite ideas about what “safe” means when it comes to building a retirement fund. He’ll be my guest today at 10 a.m. on our Your Turn. The show starts at 10 a.m. EDT. You can stream it at www.federalnewsnetwork.com or listen in the DC-Baltimore area at 1500 am.  The show will also be archived on our home page so you can listen later, listen again or pass it on to a friend or coworker.

Nearly Useless Factoid

By David Thornton

The center of the Milky Way tastes like raspberries and smells like rum. While using a radio telescope to sift through the cloud at the center of the galaxy for amino acids, the building blocks of life, they discovered ethyl formate, a chemical that gives raspberries their flavor and smells like rum.

Source: The Guardian

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THRIFT SAVINGS PLAN TICKER

May 24, 2022 Close Change YTD*
L Income 22.5706 -0.0331 -3.32%
L 2025 11.3658 -0.0337 -6.04%
L 2030 39.0847 -0.1752 -8.58%
L 2035 11.6300 -0.0574 -9.48%
L 2040 43.6231 -0.237 -10.33%
L 2045 11.8513 -0.0694 -11.10%
L 2050 25.7714 -0.163 -11.80%
L 2055 12.4333 -0.1035 -13.56%
L 2060 12.4325 -0.1034 -13.56%
L 2065 12.4315 -0.1033 -13.57%
G Fund 16.8770 0.0013 0.65%
F Fund 19.0763 0.1393 -9.33%
C Fund 59.8551 -0.4895 -12.91%
S Fund 62.3455 -1.5191 -18.83%
I Fund 34.4516 -0.0825 -12.73%
Closing price updated at approx 6pm ET each business day. More at tsp.gov
* YTD data is updated on the last day of the month.