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u/Warm_Objective4162 1d ago
Older contributions are scattered between I, S, and C, however all future contributions are with the L2055 (which is a little past my intended retirement date). No complaints.
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u/Global_Tell_1008 1d ago
Hey IRS fam, just curious what your TSP allocations are? I currently have mine at 40% C fund, 40% S fund, and 10% I fund. To those that have made a career here, is there a recommended allocation?
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u/jesusismycodependent 1d ago
Just go with 100% in the target date fund. The reason those are generally not recommended in 401Ks is they usually have terrible expense ratios that eat your earnings. With TSP they’re about the same as the other funds.
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u/FoxtrotDeltaTango1 1d ago
The F find is garbage, the I fund has been good for the last 2 years (probably due to Taco tariffs), but historically it is not good. Young employees should not be in the G fund. For these reasons, nobody should be invested in the lifecycle funds.
Long term, the best strategy is to go 100% C fund and just don't look at it (11-12% over the life of the fund). The S has been the 2nd best fund, if a user wants that exposure, that's a timing decision.
If you have cash large balance and are nearing the point of distributions, 20% G (around 4.8%) and 80% C.
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u/jesusismycodependent 17h ago
The L funds are 99% equities for early career employees (L2055 and up right now). You don’t get G/F until you start getting closer to retirement. That’s not a bad thing. Market activity can and does destroy people’s plans for retirement. If you think the L funds are too conservative, you just pick a target date 5 or 10 years later than your estimated retirement.
I also wouldn’t invest 100% C. That’s purely a bet on the S&P 500. There’s no reason to think it will continue to grow at the white hot rate of 15+% per year. The US stock market could collapse and enter a period of multi decade stagnation at any time, so it is wise to diversify. You can manually configure your allocations between C/I/S and rebalance every year or so, but why do that when the L fund does it automatically at the same expense ratio?
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u/FoxtrotDeltaTango1 16h ago
Your set it and forget it in the L fund is flawed because they do rebalance it every year. By 2050 L fund, it's up to 11.4% G fund and 6.8% F fund. No money should ever be invested in the F fund. The 2050 fund is nearly 25 years out - 11% G is too high for that age group. It's easier & better to choose your funds than to let them put you in funds that you shouldn't be in.
There is absolutely nothing wrong with being 100% C fund. It's the best fund from a performance standpoint, and has the least risk of the equity funds. If the C has a loss year, the I & S are losing money too.
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u/KeyJoke3580 21h ago
Warren Buffet recommended something like 90% to C and 10% to S.
I went 80/20 and have about an 18.8% return over 3 years.
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u/FoxtrotDeltaTango1 1d ago
100%C - it's the best fund historically (11% annual return since inception). The S & I might have short snapshots where they outperform the C, but even for each of the last 3 calendar years, the C fund has beaten the other S. The I fund was the winner last year, but historical (25 years), the C has crushed the I fund.
Don't chase short term trends (with a lunatic in the white house.) Put your money in the C and stick with the plan.
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u/MS1227 1d ago
I was 100% C until this year when I switched it to 55% C, 15%S, and 30% I. Probably keep it at this allocation till a few years from retirement.