Topgun514's Account Talk

[Topgun514]

Hey Everyone,

I am extremely new into TSP and want to run everyday there is a stock market loss. I am very skittish with my funds but would like to retire as young as I can- so I am not sure G-fund will fulfill my needs.

I would love to get help from someone who knows a bit more than me, I understand that no one may want to give me exact rules to follow to maximize my gains, but any help is GREATLY appreciated.

My Background:
23 going on 24, plan (hope) to retire as young as I can (is this 55, 65, 67?)
Currently putting in 2% to retire because of student loans, plan to pay off loans in 4 years, then add 5, 10, 15% Who knows my needs then, but I will increase it by the time I am 28 or if my pay raises allow me.
I can give my GS scale if that would help.
No other IRA, retirement, just the TSP.

I would really enjoy if someone could recommend me a percentage to keep my funds to have good gains and but I do not want to risk all my money. Really, I think we all want that, but any help would be SO helpful.

PS, I am reading around as much as I can, still highly confused if I should stay all in L2040, some in G, etc?

[craigerv]

Welcome Topgun! First of all, it's great that you're starting this so early! I think you'll have no problem meeting your goals simply because you're starting so young. I'm under 30 as well but wish I would have really jumped into this a year or two earlier.

First of all, I would start by reading Tom's commentary every day. I have learned a ton from just doing that. When I didn't understand something, I would often just look it up (investopedia, wikipedia, google). I am also a big fan of stockcharts.com and their chart school. It's free and will help you understand the basics of chart analysis that most of us here use (moving averages, MACD, stochastics, RSI). After hanging around here and reading like crazy, it took me about a year to develop my own trading system that I feel comfortable with. I highly recommend finding some type of system to follow to keep your emotions out of the game. Many people start with the LMBF system which you can search for in the forum. As for what to contribute, I highly recommend getting the full match out of your contributions by adding 5% (if offered) because its free money with zero risk. But everyone's situation is different so contribute what you can. Read, read, read, in the forum and ask questions if you don't understand something, there is a lot of knowledge in this community!

Good luck!

[Birchtree]

The problem you'll face going forward is that all these funds are getting expensive which means you'll acquire fewer shares and your objective should be to accumulate as many shares as possible over the next 20 or 30 years. I happen to believe we are in the early stages of another mega trend secular bull market that possibly could last several decades. Knowing the history that I do I'd go with 100% C fund - set it and forget it. I've never had a system, currently don't have a system and will not have a system in the future. Develope your discipline and stay long even in any type of correction - just keep dumping your money into more shares and you'll be fine for retirement. At some point open a Roth IRA for more flexibility. Always learn before you churn. When you've accumulated 20,000 shares you'll be ready to make serious money with trading - until then remember that your account will be like the beach waves with money flowing in and with money flowing out - it's really a simple buy and hold approach.

[JTH]

Investing is like going to war, build your castle with a large moat and destroy your enemies. Looking back to when I was your age, I'd dump & squeeze every spare penny I could into TSP and a ROTH IRA. If you are single with no kids, what you do in this next 10 years can have a dramatically positive effect on the lifestyle you live in your 60s. Reduce your bills, increase your cash-flow, increase your investing. If you're just starting out, don't try to dodge the market's minor fluctuations, it's more important to accumulate shares. JMHO

[FAB1]

although I dont follow birchadvice its best for noobies. G fund is a waste of time unless you like to time the market

[tsptalk]

Welcome Topgun514!

Getting started early is important. Try to add to your contribution percent each time you get a COLA or step raise so it doesn't hurt.

At your age you should be aggressive and a buy and hold approach may be best until you learn a little more, but since you are not a fan of markets going down, you are a good candidate for market timing - trying to avoid market drops while riding market gains. It's not all that easy but buy and holders will get both all of the gain, and all of the losses that the market dishes out.

There is a good Google based search feature in the top right corner of most non-forum pages (see TSP Talk - Thrift Savings Plan) so if you have any specific questions, you can ask it on the forum, or go to the search box and you will likely find another discussion about that subject.

Good luck!

[nnuut]

Welcome TopGun, plenty of help here.
Best of luck
Norman

[Scout333]

Welcome TopGun! As others have said, the more you can put in early the better! The Dave Ramsey approach suggests first contributing into your 401 k ( TSP) up to the amount that is matched. 5 % for TSP. Then go to work on debt including student loans in order of interest rates (higher to lower). JMHO Best of luck! You are smart to address these financial matters early! Not many your age are, unfortunately.

[Topgun514]

Thanks so far everyone. The LMBF seems interesting to me so far, but of course I will have to look into this as I progress.

I am leary of going all in for any one of these so I think my approach for the time being will be 50% L2040, 20%G, 10%C, S, I. I hope this gives me as many gains as possible while being safe, potentially. The thing that rings loudest in my head is the 2008 year. Looking at those numbers terrifies me seen as the stock market seems to be on pins and needles.

Currently, I am 20% L2040, 60%G, 10% C and S. I will probably hold this through April or May. It looks as if after May, the markets pick up, then move all to G in Sept- Oct, then back into my usual- skipping April-Map, and Sept-Oct with all my money in G. Maybe I am crazy, but it looks like that statistically is the safest option. Am I just reading too much into Business Insider? Whenever I move my money out of something, the stocks shot up. Maybe I should go with opposite of what my brain tells me?

[Cactus]

Welcome to the forum, Topgun514!

I see you have already gotten a lot of good advice here, so I won't repeat it. I will only caution you to come up with a plan you feel comfortable with and can stick to. Don't let your emotions get in the way or the market will eat your lunch. It's designed take the most money from those who excitedly buy high and in fear & depression sell low. Don't be one of them.

One benefit of just starting out is you can afford to make your mistakes now and learn from them because you don't have that much to loose yet. Take advantage of that. One thing I found helpful was to keep a log of decisions I made and how they turned out. You can review it annually (I do mine in Dec) and make any necessary changes for the following year. It's a good way to see how you are fooling yourself.

[Topgun514]

Thank you guys so much for your suggestions. I will definitely have some reading material to catch up to many of you. My last questions for at least this hour: What is the minimum retirement age in government, minimum age to begin taking out money from the TSP without penalty, and average % in G fund for people in between 20-40 years old taking high/ moderate/ and low risk?

[imike023]

Topgun if you're employment matches up to 5% PLEASE put the 5% and not the 2% you have. It's free money you are losing. I know you have to pay you're student loans but find a way to make extra money elsewhere.

average % in G fund for people in between 20-40 years old taking high/ moderate/ and low risk?

The people that are in the G fund at my work place are the people that don't know anything about their tsp, are afraid of taking chances in the market or don't really care. I have a friend who is 28 has 7 years in the post office leaves his money in the G fund. To date he has about $14,000. I am 34 also have 7 years as well and so far have about $36,000 in my tsp. I am taking risk to maximize my rewards. You want to retire early? Put it in the S, C, I, L funds.