Hey everyone

[JimB]

HI great site so much info here don't know where to begin. I have a couple questions and hope someone can help.
I have 6 years left until I retire. I have all my monies inthe G fund $386k but know it's way too conservative. I contribute 24k a year. I am thinking about following Clappers seasonal mix but don't know what day of the month do I actually initiate the switch to different funds?
Also what's your opinion should I move all of my monies from the the G fund when I start?
Thanks to everyone for any advice you can share with me.

[ewok55]

Welcome . I'm pretty new here, too. My understanding from watching most folks in the seasonal mixes is that they do their IFT on the last day of the month so it goes into effect at the 1st of the next month. There has been some discussion of whether or not this is the most efficient time, though, as there may be intra-month patterns (e.g., 401k's might be withdrawn on the 1st and 15th, and other potential patterns, I'm sure).

Regarding my opinion of whether I should have all my funds in G 6 years prior to retirement, I'm probably not the best person to answer as I'm not even 6 years into my fed career! That being said, I do believe in the general trend to be moving away from stocks and into bonds (G) as one approaches retirement. Whether I would be 100% G at T-6 years is another matter. It would probably depend on other factors (do I have other retirement accounts, and what are their levels of diversification? Do I have a pension as a safety net? How much? Do I plan on living off my TSP as soon as I retire, or will I keep investing/saving while in retirement?). Just some questions I would consider before making the decision. I'm sure others more experienced on this forum have more considerations, too.

Welcome, again!
Ewok55

[rmcdeepsea]

In my opinion, using one of the seasonal methods sounds like your best bet, but maybe slowly reducing the amount you put into those funds as you get closer to reduce some risk. For instance, maybe first year starting with 75% invested, 25% leaving in G fund. 2nd year 70% invested, 30% left in G. 3rd year 65% invested, 35% left in G, and so on. And of course you could adjust these percentages based on how risk adverse you are. I am currently using 100% of my money mimicking Jabulons mix. I am only 36 though!

Question for you though. I thought the cap was 17,500 to put in TSP a year?

[Mad Maxx]

deepsea, since you are a youngster, you can't do the catch-up the rest of us (50+) are allowed, which brings our contributions up to 24K per year. In due time

[bad70nova]

In my opinion, using one of the seasonal methods sounds like your best bet, but maybe slowly reducing the amount you put into those funds as you get closer to reduce some risk. For instance, maybe first year starting with 75% invested, 25% leaving in G fund. 2nd year 70% invested, 30% left in G. 3rd year 65% invested, 35% left in G, and so on. And of course you could adjust these percentages based on how risk adverse you are. I am currently using 100% of my money mimicking Jabulons mix. I am only 36 though!

Question for you though. I thought the cap was 17,500 to put in TSP a year?

You can contribute up to 18,500 and guessing they near retirement they can do the catch up after 50 of another 5,500. I will start this in 21 years when the house I paid off.

[rmcdeepsea]

Ahhh, I was wondering if that was the reason. Didn't know catch up was that much. Pretty sweet! I know with IRA's its only 1,000.

Not to hijack the thread, but I was wondering why TSP allows 17,500 for Roth TSP, but regular Roth IRA is only 5,500?

[bad70nova]

Correct myself it is 18,000 and 6,000 catch up.

As for the TSP and Roth IRA difference I have never tried to look up the reason. There are a lot of smart people on here you will get an answer in about 10 min.

[blackops]

The limit for 2017 is $18,000 plus another $6,000 for catch-up contributions beginning the year you turn 50. So it's possible to contribute up to $24K.

[Aitrus]

JimB,

What ewok55 said is correct for the system you're asking about. The move is made so as to be effective at COB on the last trading day of the month. So for Feb, the move would be made before noon on 31 Jan.

As for how to invest in your retirement years, that's up to your personal risk tolerance. rmcdeepsea has some good advice about maybe not using 100% of your funds in the seasonal strategy. Another way to look at it is to use 50% following one seasonal, and 50% following another. Use gclapper's Mix for half of your money, and use G All Year, S in Dec (or F All Year, S in Dec) for the other half, for example. G All Year and F All Year keep your money pretty safe, but doing it this way puts 100% into S for Dec (a pretty reliable month for gains).

In the end it's down to how much risk you're willing to take. Remember, after the 2008 crash some Mixes have had nothing but double digit returns each year (or nearly every year) since then. There's nothing wrong with still following a strategy in retirement with some (or even all) of your money. After all, it's not like you don't have 30+ years of possible gains to be had in retirement. I could see somebody leaving 50% in G and using the other 50% on a seasonal strategy in their retirement years. That way you don't run the risk of losing it all in a bad year, but can still make some good money in the good years to beef up the inheritance for your kids.

[Jamters]

Keep in mind also that to participate in the $6,000 catch up (50+) you have to contribute the max of $18,000 in traditional and there is no matching funds in catch up - but for me it's a godsend.

[rmcdeepsea]

That's a good point. I hadn't realized all 18,000 had to be in traditional. I just started putting all my money in as Roth last year to hedge my bet on future taxes. Will have to keep that in mind.

[cswift01]

Dear all,

I have never participated in conversations here. I will try to be brief though. I have a really good feeling about the I Fund this year. Why? I suspect that the S&P will have quite a ride given the "tweet effect" and all the changes coming. I think the biggest factor will be inflation though. That will depress the value of the Dollar.

Feel free to disagree, but I think the I Fund has been undervalued for some time now. I'm not an all in kind of guy, but I would be shocked if it didn't do well.

Let's see what happens.

Best,

Me

[rcozby]

Keep in mind also that to participate in the $6,000 catch up (50+) you have to contribute the max of $18,000 in traditional and there is no matching funds in catch up - but for me it's a godsend.

I don't think Jamters meant Traditional in that sense. Rather, you need to contribute the max to TSP, whether Roth or Traditional, before you can take advantage of the CUC. It just makes sense.

[mindofmush]

The IRS views the RothTSP similar to a 401K which has some different rules than a Roth IRA.

So to really max out your contributions: $18,000 regular contribution to RothTSP, $6000 more for catch up contributions to RothTSP and $6500 into a Roth IRA (and another $6500 into a spouse's Roth IRA, if applicable) for a total of $37,000 of which only the agency matching funds will be taxable.

And if you can live on your paycheck after all these deductions, you're well situated to survive on your pension without touching your savings!

[Atbattin]

The IRS views the RothTSP similar to a 401K which has some different rules than a Roth IRA.

So to really max out your contributions: $18,000 regular contribution to RothTSP, $6000 more for catch up contributions to RothTSP and $6500 into a Roth IRA (and another $6500 into a spouse's Roth IRA, if applicable) for a total of $37,000 of which only the agency matching funds will be taxable.

And if you can live on your paycheck after all these deductions, you're well situated to survive on your pension without touching your savings!

Thanks for this summary mindofmush. I moved to all Roth for both regular and catch-up contributions in 2017 after running the TSP calculator at the suggestion of some of the leaders on this site. I'm interested in exploring this further so thanks for the inspiration for new thread.