Wednesday, January 31, 2007

Are Federal Employees Investing too Conservatively?

Yes, Uncle Sam's employees have a pretty good deal, overall. But the study of the TSP referenced in the WP article below gives the numbers: about 29 percent are investing with a "no risk/low risk" approach; about 59 percent "moderate or balanced", and about 11 percent investing with more risk. The conventional rap on government workers is that they work for the government for career stability. I think that is probably partly correct, but if more than 11 percent of federal workers are relatively young, when you need, need, need to be getting your investing off to a good start, then they are potentially unnecessarily courting the risk of underfunded retirement. And the rest still need to be investing in a way with an age-appropriate allocation to equities, to make that money grow. The TSP is a fine plan, and there are some pretty good things to work with in it.

Stephen Barr - Careful Retirement Investing -

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