Thread: redistribute funds?

WelcomeVickie -
I'm going to take the easy way outright now and point you to the longer term comments. At the bottom of that page I touch on potential allocations for those who don't want to transfer funds often. It takes intoconsideration your risk tolerance. Take a look and then come back if that didn't help.

Thanks, and thank for joining us!
Tom

I read in the USA today about close to retirement investing. The analyst rule of thumb was for every year you get closer to retirement, starting with year 10 (57 if you retire at 67) is to move 10% into the G fund for every year you get closer to retirement. Ex. 9 years to go 10% in G fund. 5 years to go 50 % in G fund, 2 years to go 80% into G fund. I myself will probably stop at 60 %. I say that now, but when time comes I still will do 100 % in the fund of my choice. His reasoning was the closer to retirement, the more you don't want to take a chance of losing big and you might not have the time to wait for the market to give it back to you.:dude:

Frizz B. wrote:

I myself will probably stop at 60 %. I say that now, but when time comes I still will do 100 % in the fund of my choice.

:l December is long term to us.

Hi,

Thank you for taking the time to answer my question. I'm still not clear how much I should move but it sounds like I should move some $$s. You are all very knowledgeable and I feel like I'm in first grade!! I am 50 and would love to retire by 55 but I'm sure that probably won't happen unless I get an inheritance earlier. And I never know about 2 nearly grown sons - they could mean working until I'm 60. I think I need to seek a financial advisors advise. I'm just have never been sure if they are worth the money - in addition they cost money too!

Anyway, TSP is the stock market. I know you have to be diligent and be willing watch it and ready to move your money. I have only done that once. I just don't or won't otherwise. But it could mean losing my retirement. So I have to learn to live with risk but not watch it - I think I just talked myself in keeping it in the G fund- maybe I'll move 20% each to S and I.

Vickie

Keep it all in the G if you truly believe you can't afford to lose any at this point.Walk away with what you have and enjoy your retirement. :dude:

vickie wrote:

I am 50 and would love to retire by 55 but I'm sure that probably won't happen unless I get an inheritance earlier.

Vickie -
I would say if you want to retire at 55 you will need to take chances in the market, otherwise G fund and 60-65 will have to be your plan.

To follow us, you don't have to trade every day. Thelonger term allocation has made two moves all year. From 100% stocks to 80% in mid-January. Then back to 100% stocks in late March. That's where it's been since.

But don't do anything if you arenot comfortable with it.

Tom

I suggest she seek advice from one recommended by people she trusts. Many finance people are paid by thecompany they represent. For example, where I bank has a section of finance planning; I don't pay for the advice and I am involved now with a Roth IRA, other mutual funds, and other plans. She was the one who suggested I look move more heavily into the C fund last summer. So, I was manipulating my funds back then, happily! Get advice, Vickie. You don't have to do it. Single mothers especially need to be more conversant about their money.

I would move everything out of the F fund since interest rates will be rising. Keep in mind, when interest rates rise, the value of bonds fall. Stay out of F until things level out a bit.

As for myself, I'm staying 100% G until after June 30- (Iraq hand over).

It's really hard to say though how the market will react. On one hand, it will probablywelcome the interest rate increase because that means the economy is improving. But with the Iraq handover, we just don't know what the insurgents have up their sleeves. Then again, the market may love the hand over too, taking the heat off of America... so to speak, although we will remain heavily involved!

That's why I will just play it safe in G. But I will say this, if I begin hearing news of a possible "summer rally" around June 30, I may very well move back to stocks before then.

God Bless

One more comment Vickie, since you are so close to retirement it would probably be wisenot to invest heavily intoS & I, maybe even C. Because if you lose big, you really do not have time on your side to make up those losses.

God Bless

Hi,

Thanks to all that responded to my questions. I'm considering calling my credit union to talk to a financial advisor. I also have Vanguard IRAs that are in bonds that are now losing money and have to be moved. I wish I had my ownprivate financial advisor to handle this. I understand taxes but the market boggles my mind. I think it's sad that so many people who don't have a clue of what they are doingand have lost some oftheir retirementmoneybecause the market might as well be Vegas.

Oh well, I'll think about it for a few days and maybe I'll get an inspiration.

I am married for 25 years but sadly myhusband is dying of throat cancer at 50-I guess Igave the impression I was single.

Vickie

Vickie,

You might want to consider a "fee-only" investment advisor, i.e. one who is not receivingincentivesto sell you a particular stock or mutual fund. The National Association of Personal Financial Advisors has a referral service on its web site http://www.napfa.org. In addition, today's Washington Post carries an article, "Mind Your Money, and Your Broker", which is worth reading.

Secondly, you might want to consider a variation on the Vanguard Target Retirement Fund asset allocation strategy. It is in line with current, mainstreamasset allocation - at least everything I've been reading!

The 2005 Fund, specifies the following allocation:

• 50% Vanguard® Total Bond Market Index Fund (G and F Funds)
• 35% Vanguard® Total Stock Market Index Fund (C and S Funds)
• 15% Vanguard® Inflation-Protected Securities Fund (no correlation to the TSP - but you're already in Vanguard)

The 2015 Fund, which is a little beyond your target date, specifies the following allocation:

• 50% Vanguard® Total Bond Market Index Fund (G and F Funds)
• 40% Vanguard® Total Stock Market Index Fund (C and S Funds)
• 07% Vanguard® European Stock Index Fund (I Fund)
• 03% Vanguard® Pacific Stock Index Fund (I Fund)

The 2015 Fundcould be the choice for a more aggressive investor with your time horizon. However, you could also split the difference in the allocations.

Finally, The Target Retirement Income Fund specifies:

• 50% Vanguard® Total Bond Market Index Fund (G and F Funds)
• 25% Vanguard® Inflation-Protected Securities Fund (no correlation)
• 20% Vanguard® Total Stock Market Index Fund (C and S Funds)
• 05% Vanguard® Prime Money Market Fund (G Fund)

You need to remain invested in stocks to beat inflation - bonds won't do it. However, after retirement, you also need to maintain several years of income in cash or bonds. If you want a more aggressiveasset allocation strategy,i.e. more stocks, see "Stocks for the Long Run" by Wharton professor Jeremy Siegel.

Good luck!