Retirement Planning

[Rex]

Back when I was in bootcamp we enrolled into the Thrift Savings Plan, and put 100% of our contributions into Gov. securities. Now that I'm out of bootcamp I have access to change the percentages. I have the option to spread it out among Gov sec., fixed, common, small capital stock, and int'l stock. We were advised to put 50 into Gov, and 25 into small cap and int'l.

Just looking for more advice on how to spread the contributions, and other retirement planning.

 

[fogg88]

The advice you were given is pretty weak. They're saying put 50% into a very conservative option, and the other 50% into the riskiest options? You can potentially lose out both ways. Obviously, the international and small-cap (usually techs) are risky, but you also run the risk of missing out on gains by keeping your money in gov't securities.

How old are you? If you've still got at least 7 years until retirement, you need to get some of that money into regular large cap growth funds. (I'm assuming that's what their 'common' option is?) It's all about your own risk tolerance, but if you're under 50 still, I'd say a general split-up of 50% large-cap, 15% int'l, 15% small-cap, and 20% gov't would be alright. Some people will say "The market sucks now, don't invest in stocks!", but right now is the opportunity to buy low, so you can later sell high.

...just my two cents worth. (I used to work in the 401k / 403b / 457 world.)

<waiting now for the doomsayers who say the U.S. economy will never 'recover'. >

 

[Rex]

Thanks for the input. I'm 18. 19 next month. I got a long way until retirement.

 

[fogg88]

No problem!