How to Hurt Your TSP During a PandemicawsDONOTREMOVE
The stock market crash over the last month has scared many Thrift Savings Plan investors, who are worried about their investments evaporating into thin air due to the latest global crisis.
Kim Weaver, TSP’s external affairs director, states that inter-fund transfers were experiencing a dramatic surge. This was limited to merely 5% of their total participants, she said. Over 95% of all participants had chosen to do nothing. She stated that the TSP’s current priority was to remind people of their original plan and the need to stick with it through tough times like these.
It is okay to be worried about your savings, given how shaky the US stock market has been over the last few weeks as a result of the COVID pandemic that has swept the globe. A lot of investors are concerned about not being able to reach their retirement goals on time.
Please note that if you are not certain of your ability to retire safely with your finances in order, you should consider staying on in your career. Quitting your job is well within your control and you can always rescind the retirement application. The OPM states that employees can withdraw their application provided the effective separation date has not yet been passed. This rule cannot be violated unless the company has a legitimate reason, which has been explained in writing. To put it simply, you can always go back unless the company has a particularly good reason why you should not be allowed to do so.
No doubt that your retirement application processing will be slowed for a considerable amount of time due to the current pandemic disrupting services everywhere. If you are worried about your finances and do not have an emergency fund for the next 3-6 months, you should delay your retirement plans until things are stable.
In case you are asked by your financial adviser to move all your money from your TSP, before retirement, into another account, make sure they have a concrete reason for asking you to do so. This is not a move that can be made lightly and plays a crucial role in affecting your retirement.
Make sure that all your investments have been rebalanced accordingly to support your retirement. While that doesn’t necessarily mean that you’ll have complete immunity to market volatility, you should ensure that your savings have been allocated to stable investment avenues from which you’re able to make steady withdrawals for retirement income- income that isn’t linked to market returns.
Consult a financial expert to learn more on how you can keep yourself from the risks of major market swings. Make sure your portfolio is diverse enough to weather through such storms.
Also, TSP has another word for investors who are on the brink – The markets may start moving back up again by the time you decide to liquidate your investments. Missing out on such upswings could result in your portfolio’s results underperforming that of the market’s average return. Do not deviate from the plan and you will be fine. The Benefit Coordinators THE Federal Short Term Disability Insurance!