Am I Planning Right?

Sue is investing in a thrift savings plan. Is there a better way?

QUESTION: Sue has been putting money into a thrift savings plan in the G fund. Should she move that money, and to where?

ANSWER: If you are going to be in this plan for longer than 5 years, put 60% in the C fund, 20% in the S fund and 20 in the I fund. C is the common stock, basically a growth stock mutual fund. It’s modeled after the S&P 500, so basically whatever the stock market does in general, it will do. That’s the most conservative of the 3 and has the best track record. The S is small company, so it’s smaller and newer and more volatile companies. It’s like the party fund. This I is international, which is tied to international companies and stocks. It’s the least performing of the 3, but all of those have done better than the G fund.

Don’t do it because I said to, though. Do it because you understand it. Between those 3, you can pretty much count on 10% to 12% growth over a long period of time.