Thread: Upcoming Talk

Interest appears to be out there. One personexpressed concern:I was reassigned to a swingshift Monday but will carry on with the talk anyway, I told him.

If there is time and interest, we will talk about life outside of TSP. I thinkthat after the TSP is fully-funded, an individual could set up a Roth and max that out. It is easy to manage a Roth, you can do things with it you can't with TSP, and once maxed a mix isbest. Right?At my house we set one up for her this year.

My outline looks like this:

* Three-legged stool;FERS in a nutshell.

*Quick derivation showingTSP should equal(4 to 6) times H3.

*How to get there. Table of expected balance at 5-6-7-8-9% average return on an average salary of $50,000 after 20 years with 5-10-15% contribution.

*Noting that these are real returns and that inflation-protection is a must, I shall haveproven that the G-fund isinadequate, and that some form of stock investment is required.

*Risk and Return --60G40C vs 40G60C. Spaf, you remember this. C varies by +/-10% while G always goes up 5%. 60G will protect you from 90% of the downside risk while generating 70% of the return compared to 100C; and 140% of the return compared to 100G.

*Display my allocations: 35G 26C 26S 13I. Whys and wherefores; rebalancing.

*L-funds vs do-it-yourself.(My recommend is L-fund now, DIY later.)

*IRS limits and Catch-Up contributions; front-loading, etc.

*The result should be that in 20-25 years they are swinging a club like yours, Birchtree, having fun trying to decide what to do first -- go to Europe or to Hawaii. "The alternative is a trailer in Punta Gorda. Think it over, your future self will thank you."

Dave

Well I think that is a terrific package, simple and not too long. I also agreee that the next thing to think about after maxing the TSP is a Roth, then after tax investments. Very brave to talk to coworkers and friends, actually harder than pitching strangers, I think. Hope it goes well.

The talk went well. About five people showed up and we had a lively discussion Monday -- I scrubbed Tuesday because of another meeting in the conference room. I gave them my message which was really just two points when you boil it down: be prudent and pay attention.

Be prudent? By that I meant that if you are 100% in one fund or another, you are gambling not investing. Investing means managing a portfolio. A balanced portfolio will make money in just about any environment. As we are in it for the long haul we can expect to meet ALL environments eventually, so prudence is always a good thing.

Pay attention? By that I meant that once a balanced portfolio is set up, it needs to be rebalanced at regular intervals. I do so monthly. This will control the downside risk by assuring that no one fund comes to predominate the portfolio's earnings. I used the idea that we are not the sole beneficiaries of our TSP and that we will create widows and orphans one (sad) day. We do not want to impoverish them tomorrow by making poor decisions today. Be prudent!

I recommended the L-funds for those who don't actively manage their account, then DIY once retirement is in sight. Sighting range is five years.

In a couple years we will do this again and I will talk about how to get your money OUT of the TSP.

Dave

Your colleagues are fortunate there is someone in their midst who would take the time & make the effort to share about utilitzing the TSP to their best interests. Congratulations for your success! I would bet that in the near future as word speads thru the facility, that you are asked if you tapedthe program,or if you will be doing it again in the near future! :^

Glad it went well.


"I used the idea that we are not the sole beneficiaries of our TSP and that we will create widows and orphans one (sad) day. We do not want to impoverish them tomorrow by making poor decisions today. Be prudent!

I recommended the L-funds for those who don't actively manage their account, then DIY once retirement is in sight. Sighting range is five years."

Like the message, most Govt people are responsible people and appealing to their responsibilities is appropriate.

I also strongly agree that if someone is not going to manage their TSP account they should use an L fund.