Howard Marks, “The concept of surviving on average is irrelevant. You have to survive every day. Which means, really, that you have to survive on the bad days.”
Are you a government employee or uniformed services member over age 59.5 looking to lower the overall risk in your TSP as you approach retirement? We can help with this. Consider Sam, age 62, government employee, $600,000 in his TSP plan in the following funds: C fund, S fund, I fund, and G fund. Over the 25 years he has been in the TSP, his returns have been quite good, and as expected, some years were positive, while others were negative. Being as retirement is just a few short years away, he is interested in hedging his downside while still participating in some market upside with a part of the balance of his TSP. In Sam’s case, we did what is called an in-service withdrawal for $300,000, and since the funds went directly into an IRA, it is considered a non-taxable event. We can then select a platform or investments that are more aligned with mitigating risk in bad markets so that his overall portfolio risk (on the total of $600,000) is lower than if he had just left everything in his TSP.