Starting next month the TRS Bond Fund will be discontinued and replaced by the Balanced Fund. For educators who are still contributing to the Bond Fund, the same percentage will now be assigned to the Balanced Fund, umless you change your allocation. While the Balanced Fund is preferable to the Bond Fund the question is should an educator contribute to it?
Normally a balanced fund is an appropriate conservative investment that usually has an asset allocation of between 40% to 60% in stocks and the rest in fixed income investments like bonds, money market funds and government securities. However, when TRS offers a no fee 7% interest rate Fixed Fund, why bother? I, for one rather put any conservative investments into a guaranteed 7% return then gamble on the Balance Fund with its allocation of volatile stocks and in our present low interest environment, 2% fixed income investments.
I see the Balanced Fund appropriate for those educators who think stock equity funds.are too risky for their tastes but wants some inflation protection. Otherwise, the TRS Balanced Fund is not recommended by me at this time.
5 comments:
Im 38 years old and still have 17 years (god help me) to go. What would you advise as my breakdown for my TDA? Thanks
At your age. I would put 75% in equities (10% in international) and the remaining 25% in the Fixed Income Fund.
Forget the TRS entirely because they don't offer a after-tax (Roth) option. When you reach 70 years old you will be required to start withdrawing your TDA. You will then be taxed on that money and possibly put you into a higher tax bracket.
Check out the NYC Deferred Compensation Plan offered to all NYC employees. They offer an after-tax Roth option.
To 8:10
I would put it in Fix until you educate yourself.7% is great about the stock
market average return. Read the on the bottom of school daze for ex
can I retire. Read money mag,. kiplinger mag.etc.Join the financial program of UFT.
Don't ask the UFT....they ll tell you resign LOL
Post a Comment