Planning for retirement means managing risk Published Oct. 30, 2008 By Brandice Armstrong Tinker Public Affairs TINKER AIR FORCE BASE, Okla., -- Manipulating the money market and planning a worthy retirement fund is complicated even in a stable economy. In an unstable market, seemingly all bets are off. Tinker officials said that doesn't have to be the case. When planning for retirement, the Thrift Savings Plan, a civilian retirement savings strategy, could offer Tinker personnel a reasonably-secure future, officials said. Combined with the contribution limits changes for 2009, the TSP may prove to be more profitable than previous years. But then again, there are no certainties. "Any time someone invests their money, there are always risks associated with gains," said Jim Mannon, 72nd Force Support Squadron chief of Staff and Associates Employee Relations Element. "Sound advice is to always diversify investments." The TSP, much like a 401(k) account, allows civil service employees the opportunity to put a portion of their earnings into up to five lettered funds to accrue money for retirement. Money set aside for the savings plan is not subjected to taxes until it is withdrawn. The five primary funds -- G, F, C, S, I, plus the L -- range from bonds to stock index investment funds. The "G" Fund is the most secure of choices, and offers the lowest risk with the lowest rate of return. Whereas, "C," "S" and "I" Funds are stock index investment funds. They offer the highest risk and, potentially, the highest rate of return, according to the program literature. Mr. Mannon said employees should choose a fund based on their own comfort zone and goals. He said not to get caught up in the economy's current status, which always fluctuates. "Anytime you invest in a TSP-type account, you have to invest for the long haul," Mr. Mannon said, "the market will always have its ups and downs. The best advice is to spread your risk and gain based on where you want to try to be when you start considering retirement." Regardless of the market status, it is ill-advised to withdraw money from the savings plan. "Many people want to take their money out now," Mr. Mannon said. "Most advisors recommend this, not to get in the trap of selling low and buying high. Historically, every time the market has gone through one of these periods, they have made money in the long run." The Internal Revenue Service has approved an increase in contribution limits for 2009. An individual can contribute as much as $16,500. Prior to the change, an employee could contribute up to $15,500. Furthermore, the catch-up contribution limit for employees ages 50 and older has increased by $500, from $5,000 to $5,500. Before any decisions are made, Mr. Mannon said an individual should speak with a financial specialist. "They are the best ones to provide the pros and cons, and the impact to potential earnings," he said. To make contribution changes, go to the Employee Benefits Information System Web page at the Air Force Personnel Center Web site. For more information, call Kimberly Ginn, in the 72nd FSS Civilian Personnel office, at 739-7516.