I am a recently commissioned Second Lieutenant trying to decide now how I will manage my retirement savings while I have some time to figure it out. I have done a fair amount of research on allocations for both my TSP and for a Roth IRA. My plan is to max the TSP and do full Roth IRA contributions as long as I can afford it. My planned allocations are as follows.
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70% C Fund, 20% S fund, and 10% G Fund in my TSP.
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80% FZROX and 20% FXILX in my Roth IRA.
In regards to the TSP, my thought here is that I want to prioritize growth, and thus stick with the the more aggressive C fund for most of my portfolio, but diversify a bit with the S fund and then hedge my bets by investing a small amount in the G-Fund. I am not risk-averse but I do feel a bit better having at least some of my portfolio invested in less volatile securities, acknowledging that this will probably decrease my ROI later on.
In regards to the Roth IRA, with the more flexible withdrawal rules and the very nice zero expense ratios that Fidelity offers on their index funds, I have a fairly standard 80/20 split between the total US market for stocks and the international market. I understand I could put all the Roth IRA contributions I could make into the TSP, but I like having the additionally flexibility and investment options of the Roth IRA so plan to max it every year.
I appreciate any feedback on this plan. I do have some past experience in finance and accounting, but I lack experience and figured it doesn't hurt to ask some questions here.
Posted by uchumi23
1 Comment
Assuming you’re ~22-30, don’t do G. No need until you’re closer to retirement.
A 80/20 C/S split is decent. Gives you decent exposure to most markets.