By Mike Miles
January 25th, 2013 | Uncategorized
Q. With a 300 percent increase in the money supply since 2008, I believe inflation will have a devastating effect in the years to come. Is there any recommended Thrift Savings Plan strategy to prepare for it if it occurs? From the risk information on the TSP website, it appears inflation will have a negative risk on all of the TSP funds.
A. The C, S, I and G funds should be the most resistant to inflation pressure.
October 15th, 2012 | Uncategorized
Q. I assume a high inflation rate is in our near future, based on the high amount of money being printed. I also assume the economy could go into a greater depression when all the corresponding actions take place — high inflation, high interest rates, market crash, possible dollar collapse. Is the G Fund going to be safe through all of this? With it being a government-backed bond, what if the government defaults on all debt and can no longer borrow to keep the economy from collapsing? Is any money in the Thrift Savings Plan safe? Basically, can I move everything to the G Fund and be safe through the upcoming collapse?
A. In the event of a catastrophic collapse of our economy, society and government, nothing is safe.
October 3rd, 2012 | Uncategorized
Q. Your Sept. 24 column in Federal Times made the suggestion to increase allocation in the G Fund at the expense of the other funds, including the F Fund. I have not normally been heavily invested in the F Fund in my 25 years. However, with the F Fund having the second-highest return of any fund since its inception (5.86 percent); that it has never had a negative yearly return; that there is a continually declining performance of the G Fund; and the low probability that interest rates will go up any time soon, I see the F Fund as a safe haven. With the G Fund barely keeping pace with inflation, the small risk to stay invested in the F Fund seems low risk. Am I missing a key risk factor?
A. Hmm. So, you think I’m exactly wrong? I guess it’s possible, but not very likely. The fact that the F Fund has performed well in recent years and that interest rates are near zero (falling interest rates fueled the F Fund’s rise) mean that the risk in the F Fund is relatively high. The G Fund offers a yield close to that earned by the F Fund but without the risk of loss. That’s my rationale. If I understand you correctly, yours is that what has gone up will keep going up?
May 8th, 2012 | Uncategorized
Q. I’m preparing to retire and trying to learn about TSP options and the outside world with investing my life savings. I have most of the outside world telling me to pull it out now — I’m 61 — because the G Fund is not even keeping up with inflation. I also have looked into investing some of it in a program called Diversified Stock Income Plan with Wells Fargo. Under $200,000 will cost me 1.5 percent every year if I invest in this program. What do the experts say about the advice I am getting?
A. This expert says: “Don’t be a sucker!” There is no better place to invest your retirement money than the TSP, period. Start by avoiding taking advice from salespeople who are more concerned about their interests than yours. Leave your money in the TSP as long as possible. If you have IRA money, move it into your TSP account.
June 21st, 2010 | Uncategorized
Q: I have all of my Thrift Savings Plan money in the G Fund, but I am worried about inflation. Is there any way to buy I Bonds or other inflation-indexed securities through the TSP?
A: Not yet.
April 28th, 2010 | Uncategorized
Q: I like to make plans for my savings and would like to know whether the contribution limits will be increasing for the Thrift Savings Plan and the TSP Catch-up contribution plan for 2011 and 2012.
A: The limits are indexed to inflation, and we won’t know whether they’ll be increasing until the inflation figures are in.