Interfund transfer question

Hello Everybody,

I just wanted to pass along to you a question that was sent to me from one of our members. The question is “Should I do and interfund transfer to match the allocation from my check when you post a new allocation?” This topic often confuses people, so I will send it out to everyone just in case you are confused as well. Remember, there is no question that is a stupid question when it comes to your money!  Here is the my answer to the question:

The term allocation is literal. We are speaking of the allocation (or percentage of money) that you have invested in each of the various funds, not the money that you have deposited into Thrift from your check. The money that you have withdrawn from your check should always be 100/G. That prevents you from losing a deposit that’s made into TSP that occurs on a bad day for the market. The money that comes out of your check that goes into the G Fund will automatically be picked up when you do your next interfund transfer. It is better to let it set idle for a short amount of time than to risk losing it on the day that it is put into Thrift. It is very dangerous to have the money that is withdrawn from your check deposited directly into an equity based fund. Of course, that means putting it into the C, S, or I Funds. It should also be noted that there is a certain amount of risk incurred as well when you deposit the money directly into the F Fund (Bonds). You are correct in that you should do an interfund transfer to reflect our current investment/allocation of 10/G, 90/F.  
Have a great day!
Scott8-)

 



Written By

Scott Grimes

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