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Keeping Up with Your Retirement Funds is a Current Effort

We live in a world where we are concerned about the now. We tend to forget to think a bit more long-term than that next term paper or assignment. But we should think long-term about our retirement funds. Govies need to be aware of them and particularly what the Thrift Savings Plan (TSP) has to offer.

Kim Weaver, Director of External Affairs for the TSP at the Federal Retirement Thrift Investment Board, sat down with Christopher Dorobek on the DorobekINSIDER to discuss some changes to the TSP program and funds.

Before we begin to dive into the newest updates though, here is some background on some of the funds:

The lifecycle funds, also known as L Funds, are what Weaver calls the “Efficient Frontier” because they are designed to post a return at an optimal risk level.

In contrast, the G Fund can be seen as the ‘never have a bad day fund’ as it is the least risky one, but it isn’t seen as efficient for long-term growth.

Alright, now onto the updates!

The first point Weaver made was to inform people about which funds went down and which had gone up. As of the end of September, the G Fund and the F Fund were up and the C, S, and I Funds were down for both September and year to date.

“People shouldn’t panic though since this is a long-term plan,” Weaver reminded us. “They should look at their investment plan and their risk and return desires.” If you feel like you need to change, “the L funds are there either as a place for you to put your money in or you can look at the L funds and you can customize how the money is invested.”

Additionally, she provided some updates on future withdrawal options. “In July the board approved us to broaden our withdrawal options. However, it will take legislation. So I’m sorry to say it won’t happen immediately,” Weaver said. However, in the end it will provide “a lot more flexibility so that you are not forced to roll your money out of the TSP just to get more access to it or easier access to it,” she said.

Weaver’s last update delved into changes in fund defaults for new employees. “As of September 5th, any new federal employee is defaulted into the age appropriate L Fund which gives them the diversification in their asset allocation that is appropriate for their age,” she stated.

Finally, Weaver addressed a common concern for investors – the Office of Personnel Management (OPM) breach. “If you are a federal employee, your name, address, and social security are going to be the same for the TSP as it is for OPM – you can’t do anything about that. But, your TSP account information and account numbers are not shared with OPM or other agencies. So if OPM and/or other agencies lose data, it is not going to be TSP specific data,” Weaver said.

Nonetheless, Weaver provided some advice about basic cyber hygiene. “Everyone’s passwords are a pain to keep track of, but it’s always good to go in and update your password, make sure you are paying attention, and be careful because obviously there are lot of bad guys out there on a whole bunch of different sites trying to get your personal information,” Weaver said. She also reminded us that, “It requires a lot more thought about your daily operations than you really want to do sometimes, but it’s well worth it.”

And if anybody wants more information about some basic online security provided by TSP, you can find it here.

Remember: your retirement funds and security are not things to put off until tomorrow. Work on them today (and every day). It also helps to keep up-to-date on how your funds are doing. So come back next quarter for our next update on how TSP is changing and improving!

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