Thread: 2 Percent Social Security Tax Cut

Originally Posted by alevin

poker, you are so far ahead of the game already if you're maxing out only 4 yrs into employment and are young enough to anticipate 26 years more in front of you.

obviously you understand what you're up against way more than i ever did til after i already had 10+ years skin in the game. congratulations on understanding so quickly and having capacity to do the max so early as well.

Thanks for the kind words Alevin, actually I've been with the TSP for 13 years contributing 5% for the first 5 years, and 15% up until 2009. Last year, I started listening to Dave Ramsey (podcast) and started following his principles, "living on less then what I make" and paying cash for everything. I started accumulating some cash and wanted to do some investing, low and behold, I found this wonderful site. Now I'm maxing out my TSP and my roth account with money left over to invest in real estate. My life has changed dramatically, I finally feel that I've taken control of my financial future.

Originally Posted by driz

The thing is for most of us in the retired or ready to retire category we weren't allowed to "max out" for many years. The system allowed us to up the ante 1% a year for a long long time which really stunk in my case. We also didn't have the the ability to move funds or do any of our own changes which equally stunk.
Fast forward you young guys have the world at your feet and the ability to max out as best you can before you get to the age where you reach those plateaus of being hammered by kids in college and similar extreme expenses. Toss in an ex wife and you could find yourself being hardly able to make much of a contribution at all. If you have already plowed a pile of cash in there you will have that working for you regardless of what happens afterwards.
Taking advantage of something like this 2% is the best way to up your ante painlessly. Other than this, grade and step increases are the best way to increase contributions. Use them all, live at least a pay grade below your means and you will be amazed how the money accumulates. You will be thanking yourself deeply in 20 years. Keep your eye on the prize!

Thanks Driz for your kind words of wisdom also. I read some where that did a calculation on how much it would cost to raise a child until they are 17. It was some astronomical number like 250K!! Not sure if I can afford a child right now, but I can imagine how much the "ex" would have cost you: alimony, child support, and half of almost everything you own including your TSP account! I learn something new everyday.....