New to FantasyTSP and TSP as well

[DR650SE]

Hello all,

Just wanted to stop in and say hello. I just joined Fantasy TSP, and am fairly new to the TSP in general. Only been contributing to the TSP for a year as that’s when I picked up my Fed position. This past year I was working at the GS7/10 level, and I just picked up GS9/5. Last pay period was my first pay as GS9/5.

My first few months, before I really knew anything about the TSP everything was going to the G Fund. After a few months I switched to a 60% C Fund/40% S Fund. Last month I moved to 100% S Fund as I figure I'm still young and can tolerate the risk. (33 years old)

At the moment I'm contributing 6%, since living in Northern VA and supporting a wife and child make it tough to contribute more. I'm also getting the 5% agency matching. Current balance is still low at around $6500. I am also in the process of rolling over $7K from a 401K, and $4K from another 401K. So as you see im still in the very early in the process. Yesterday I got my check for the $7K and am going to send it in to the TSP. Should I sit on it for a bit before sending, in the event the S may have some small losses? Or would it just be better to send it as soon as possible?

I am also in the Army Reserve, and contribute 5% of my weekend drill pay to the TSP. The sad thing about that is that I was never told or taught about the TSP as a young soldier. So now after almost 13 years in the reserves, and 3 deployments totaling 4 years of total active service, I am just now contributing the the TSP on the uniformed services side. As a reservist, contributing 5% of my drill pay, I'm contributing like $23.77 a month. My question here is, is this worth it? I mean I thought it'd be nice to have a little something set aside. I really wish we could combine the uniformed service and civilian service accounts. Or would that be a bad thing? Anyhow I plan to stay in the reserves until they force me out. I also plan to educate all young soldiers about the TSP that I can when I get new guys.



My question about FantasyTSP is, is it bound by the same 2 transfer limit/mo as the real TSP?

Right now I'm learning a lot about the TSP and feel as if I only know enough to make poor decisions lol. I spend a lot of time following tspallocation.com so that’s really what I'm basing my 100% S fund allocation/contribution. I plan to do a lot of reading here as well and hopefully be able to make more informed decisions.

Anyway that’s a few of my questions. Thanks for reading this far, and thanks for any advice!

Thanks,
Dan

[Aitrus]

Welcome, Dan.

Yes, the Fantasy TSP on this site is subject to the same 2 IFT/month limit, but you have until 12:15 Eastern Time to make it happen. This gives people time to do both their real TSP move as well as have time to do the Fantasy one if they make their move right around noon.

I'm in the Guard (10 years AD, 7 Guard), and I don't contribute to TSP on my military side unless I'm on orders. I find that it's simpler to keep the bulk of my money in one account. If I were to put in 5% from my Guard pay, instead I just bump up the amount that comes out of my Civil Service check instead. Less to keep track of that way.

tspallocation.com is a good website, and you'll make money by following his advice and long-term investment horizon. A lot of the folks here favor more active movement, often using both moves every month and wishing they had more. Others favor a seasonal approach (myself included), while others take a longer-term view.

One method might work for one but doesn't for another. Much like sports, taste in significant others, politics, and beer. Do your research, use the Fantasy account you have here to experiment with different ideas, and then when you've found something you're comfortable with start making the moves with your real money.

[ArrieS]

Hello all,

At the moment I'm contributing 6%, since living in Northern VA and supporting a wife and child make it tough to contribute more.

I am also in the process of rolling over $7K from a 401K, and $4K from another 401K. So as you see im still in the very early in the process.

My only advice and I think others will chime in is diversify. That also means more than one retirement vehicle.

I would bump that 6% down to 5% since that when the Government stops matching.

Take that 1% and start an IRA. Also, take the 5% from your reserve pay and put it into an outside account. You have more options for investing outside of the TSP and with IRA's you still get tax advantages. Talk to a professional about your 401ks and rolling them into IRAs. I'm sure the $5,500 limit for an IRA isn't going to be maxed out by your 1% GS pay and 5% reserve pay.

Also, I don't know if your wife works. But I think you can open an IRA for her too so that doubles it.

Don't get tunnel vision thinking the TSP is the Alpha and Omega.

P.S. it's also about compound interest. Look into opening an account for your child. $50 dollars a month now won't do much for us. But for a child that extra 16 years or so is amazing.

[Kato]

Arries: I'm not sure I agree or understand your reasoning. Since compound interest works better the more you have, splitting your accounts is not such a wise move to me.

I agree the TSP is not the 401k of 401k's and, in my opinion, the only thing it has going for it is it's low fees. With that said though, not maxing out your contributions in your TSP first and splitting your money in two accounts hurts the compound interest you would be getting by having all your money in one 401k account?

Or am I missing something here?

[ArrieS]

Arries: I'm not sure I agree or understand your reasoning. Since compound interest works better the more you have, splitting your accounts is not such a wise move to me.

I agree the TSP is not the 401k of 401k's and, in my opinion, the only thing it has going for it is it's low fees. With that said though, not maxing out your contributions in your TSP first and splitting your money in two accounts hurts the compound interest you would be getting by having all your money in one 401k account?

Or am I missing something here?

I apologize about how my post is unclear. The compound interest part was for the account about the child. Obviously that wasn't as clear as I thought it would be in my head. Saving now, even if it's $50 dollars a month for their child will have tremendous effect instead of their child waiting until they've reach 18 and start working and saving on their own. I'm talking about opening an IRA here.

As for splitting the accounts, the TSP is great and I love it. But really just for the G fund and the matching funds. When you no longer have matching funds from the Government the restriction of investment options puts the TSP in last place for any additional money you would save.

If you like the TSP for pretax savings, you still get Pretax savings for a Traditional IRA with more investment options.



But splitting accounts for compound interest you get the same outcome.

5 * 1.02^10 = 6.0949720999737856512

2.50 * 1.02^10 = 3.0474860499868928256

3.0474860499868928256 * 2 = 6.0949720999737856512

Same outcome.

[Longstreet]

Kato: I agree, and personally, I want to get to a point where I can get my TSP Roth maxed out before we open up anything else. (Just remember that your matching 5% will go to your traditional TSP account that's taxed upon withdrawal, but hey, it's free money to begin with so I'm fine with it)

Dan: My wife and I are 26 and 27 respectively (no kids save for a puppy) at a GS-9 and GS-11 and we're contributing 15% down here in GA. I know it can't be done right off the bat but some of the best advice we received when we arrived on base was to allocate as much as possible to our TSPs, establish a set amount that we were comfortable living off of, and then whenever we got a promotion/step increase just bump our contributions up. That way you don't get used to the new money coming in and you're able to live off of that same amount from before.

While it's true that the matching stops after 5% I'd suggest maxing it out to the contribution limit simply due to lower maintenance fees and the benefits of compounding. That being said I'm open to suggestions from those with differing opinions and I'd like to know if I'm making any mistakes!

Also: I don't know how much you like playing the market, but if you're somewhere in the middle like me I'd highly suggest taking a look at Aitrus' Seasonal Musings thread. I'm following the same mix he does with my personal TSP and love it.

[maui21ice]

I've heard the same about splitting $$ for IRA's, just like some do when they go 50% S fund and say 50% G fund. Either way both are getting their compound interest, just different amounts according to how that particular fund is doing performance-wise.

I know when I get enough $$ into my Roth IRA, I'm going to split it into a couple funds that can cover some in the International exposure, a Growth fund, a Growth and Income fund, and possibly an Aggressive Growth fund since I still have about 40 year to go until I start to collect my Roth IRA money.

[Kato]

if you split your money into two different accounts, do you still have the 24k a year limit (for us older farts)?

[ArrieS]

Yes, the TSP has low maintenance fees. It also has funds that aren't very good. Low maintenance fees shouldn't keep you in the TSP if their are better general ETFs out there to invest in.

It's not worth it to put money into the TSP with its low maintenance fees if it means missing out on ETFs with better returns even if they have higher maintenance fees.

I have my TSP in the S fund. YTD performance for the TSP S fund 6.88%.

In my Personnel account I have the Vanguard Small-Cap Growth, VBK, YTD 8.10%. The TSP low maintenance fees do not makeup for the loss of an additional 1.22%.

Plus the expense ratio for this ETF is 0.09%, the TSP website says 0.29%. So I'm still double winning.

[ArrieS]

if you split your money into two different accounts, do you still have the 24k a year limit (for us older farts)?

Or more if you have three. Even if your spouse doesn't work you can open an account for her. So that's an addition $5,500, or more depending on age.