TSP transfers
Moderator: Aitrus
TSP transfers
Hello all,
Question for you experts. When I change my allocations, should I also transfer my funds as well? Example, My allocations were 50% C, 50% S with my tsp funds respectively in each fund. I just changed my allocation to 100% I. Should I transfer all my funds to the I as well? I need some clarification on that and what the ramifications are if I change my allocation but don’t transfer my funds.
Question for you experts. When I change my allocations, should I also transfer my funds as well? Example, My allocations were 50% C, 50% S with my tsp funds respectively in each fund. I just changed my allocation to 100% I. Should I transfer all my funds to the I as well? I need some clarification on that and what the ramifications are if I change my allocation but don’t transfer my funds.
Re: TSP transfers
Contribution Allocations only affect new money going into your account. Interfund Transfers move the money that's already in your account.
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Re: TSP transfers
Andrewg wrote:Hello all,
Question for you experts. When I change my allocations, should I also transfer my funds as well? Example, My allocations were 50% C, 50% S with my tsp funds respectively in each fund. I just changed my allocation to 100% I. Should I transfer all my funds to the I as well? I need some clarification on that and what the ramifications are if I change my allocation but don’t transfer my funds.
I know a lot of pros recommend 100% allocation to G, in case the market goes sideways inbetween IFT's
Re: TSP transfers
I think the market is going sideways, but even I am not dumping my allocations into G. I IFT'd into G and F recently, but my allocations are 25% C, 25% S, 25% I, 25% F. If the market drops, my allocations will buy those cheap; and if it doesn't I'll at least have a little bit of money catching growth (until my next IFT).KatManDrew wrote:Andrewg wrote:Hello all,
Question for you experts. When I change my allocations, should I also transfer my funds as well? Example, My allocations were 50% C, 50% S with my tsp funds respectively in each fund. I just changed my allocation to 100% I. Should I transfer all my funds to the I as well? I need some clarification on that and what the ramifications are if I change my allocation but don’t transfer my funds.
I know a lot of pros recommend 100% allocation to G, in case the market goes sideways inbetween IFT's
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- Posts: 9
- Joined: Wed Sep 11, 2019 6:20 pm
Re: TSP transfers
But if your 100% allocated to G, your buying price is at lower risk automatically. You can then choose to buy cheap if the market dips, and you'll get more shares at the lower price if you have a small stash in G to transfer.Horaenaut wrote:I think the market is going sideways, but even I am not dumping my allocations into G. I IFT'd into G and F recently, but my allocations are 25% C, 25% S, 25% I, 25% F. If the market drops, my allocations will buy those cheap; and if it doesn't I'll at least have a little bit of money catching growth (until my next IFT).KatManDrew wrote:Andrewg wrote:Hello all,
Question for you experts. When I change my allocations, should I also transfer my funds as well? Example, My allocations were 50% C, 50% S with my tsp funds respectively in each fund. I just changed my allocation to 100% I. Should I transfer all my funds to the I as well? I need some clarification on that and what the ramifications are if I change my allocation but don’t transfer my funds.
I know a lot of pros recommend 100% allocation to G, in case the market goes sideways inbetween IFT's
Re: TSP transfers
One of the problems with this method is that you could sit in the G Fund for a long time while the market climbs. Then the market drops, but not below the point it was at when you decided to start putting money into G. Let's say that it climbs 20% while you wait, then drops 10%. Do you buy in? Or do you take the chance that it'll drop some more?
Or would you have been better off just buying in slowly over time, accepting that you'll buy higher at some times, and be happy when you happen to buy at lower?
This question comes up now and then. Here's my usual response when somebody asks about it:
Or would you have been better off just buying in slowly over time, accepting that you'll buy higher at some times, and be happy when you happen to buy at lower?
This question comes up now and then. Here's my usual response when somebody asks about it:
Doc-Rush,
I did a short study a couple of years ago on the plusses and minuses of contributing under different scenarios. In short, here's what I found out: mathematically, you end up paying less per share if you build up a stockpile of money in the G Fund and buy in when prices fall a lot. You end up paying a lot less per share, but it only works with small accounts.
The problem with this scenario is that it can be quite a long time before you get a fall in prices deep enough to justify buying in with your saved up funds, and the stockpile needs to be big. In the meantime, that money has been sitting in the G Fund, earning next to nothing. And while your money has been sitting, the market likely has risen so far that even a significant pullback of 10% or more simply takes the prices back to the point where you first started putting money into the G Fund. So while you pay less per share, you also end up missing out on earnings during bull markets.
Then there's the size of the account. The larger the account, the less the saved cash makes a difference in the numbers. In the end, the math says that the difference to a large account is so small as to be a wash. Mathematically, the strategy of saving money for a large purchase of stocks during a pullback works only when the amount of cash to buy more stocks at a discount is around 5% of the total value of the account and the stock pullback is at least 12%. If either figure is smaller, the math says it's not worth your time and emotion of saving the money and deciding when to buy in.
My advice for a seasonal investor: just match your contributions to the seasonal pattern. It's the best balance of dollar-cost-averaging and time management.
Seasonal Musings 2022: viewtopic.php?f=14&t=19005
Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
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Recommended Reading: http://tspcenter.com/forums/viewtopic.php?f=14&t=13474
Support the site by purchasing a membership at TSPCalc! https://tspcalc.com
Re: TSP transfers
Even as a non-seasonal investor, I agree with Aitrus. Sometimes it's appropriate to move your funds (IFT) to the G fund because market indicators are pointing to weakness or a correction, but if you set your bi-weekly allocation to the G fund you will need constant maintenance of putting that money where you really want it to go and you will miss out on growth markets.Aitrus wrote: ...The problem with this scenario is that it can be quite a long time before you get a fall in prices deep enough to justify buying in with your saved up funds, and the stockpile needs to be big. In the meantime, that money has been sitting in the G Fund, earning next to nothing. And while your money has been sitting, the market likely has risen so far that even a significant pullback of 10% or more simply takes the prices back to the point where you first started putting money into the G Fund. So while you pay less per share, you also end up missing out on earnings during bull markets...
Re: TSP transfers
Which index does the f fund follow?
Re: TSP transfers
iShares Barclays Aggregate Bond Fund (AGG)Andrewg wrote:Which index does the f fund follow?
Fund Prices2024-04-16
Fund | Price | Day | YTD |
G | $18.19 | 0.01% | 1.24% |
F | $18.58 | -0.32% | -3.33% |
C | $79.08 | -0.21% | 6.34% |
S | $76.95 | -0.41% | -0.18% |
I | $40.73 | -0.98% | 1.37% |
L2065 | $15.67 | -0.50% | 3.66% |
L2060 | $15.67 | -0.50% | 3.67% |
L2055 | $15.68 | -0.50% | 3.67% |
L2050 | $31.50 | -0.44% | 2.93% |
L2045 | $14.38 | -0.41% | 2.81% |
L2040 | $52.59 | -0.38% | 2.72% |
L2035 | $13.91 | -0.35% | 2.60% |
L2030 | $46.37 | -0.32% | 2.50% |
L2025 | $12.95 | -0.18% | 1.90% |
Linc | $25.31 | -0.14% | 1.64% |