Thanks for the advice
Thanks for the advice
If you are disciplined, and that is a must, and rates are low, go with the longest mortgage possible and put the difference between what you would be paying with a 15 year mortage, and what you are paying in a 30 year mortgage, into a stock fund. The theory being a mortgage is the cheapest money you can borrow, and if you think that you can obtain a return in the market higher than the interest rate you are paying on your mortgage, then it's a "plus" game.
Your mortgage deduction will be higher, and if you put it in a tax deferred IRA, it reduces your taxes that much more.
But if you go buying cars and boats with the money, it's a losing proposition.
Something to consider.
40 years old, $250k in TSP. Some other retirement funds (IRAs, etc). Basically max contribution at this point, but didn't max my whole career (though always made sure to get full matching).
31 years old with 4.5 years of service. 30k in tsp and currently contributing about 20% between my contributions and a loan repayment. I feel like a got a late start to my retirement savings so I'm trying to play catch up!
Investing: Did not start till I was about 32 (What a waste, I would not have to contribute a dime if I started earlier)
Expected Balance at age 65 (using Quicken and DinkyTown.Net):
- Age: 65
- Expected Return: 8% - Done better, but being conservative and considering I will be more conservative at age 60 or so
- Expected Inflation: 3% - For quite some time now it has been in the 2's. That is very nice...
- Expected Balance: $1.4 mil - $1.5 mil
- Expected Annual Withdraw (20 years): $75K
- Expected Annual Withdraw (30 years): $60K
However, unlike my retired military friends, I will have to pay for my medical insurance and I will only receive a pension from age 65 onward (if that is when I retire) and I do not receive commissary privileges nor VA loans and some other niceties. However, I did get a good match and I do not have to hope that a future politician will honor promises of past politicians. Personally, knowing what I know now, if I were a young military dude I would much prefer a matching TSP to the pension. It would transfer for those who get out before a pension, it would not be in view of politicians seeking cash, and I can watch my assets rather than having them slammed into the G Fund. Just my two cents.
Lookin' up at the 'G Fund'!!!
At age 32 I had a couple of thousand all in the G Fund and not contributing a dime. Yowser. You are doing well. Just don't stick it in the G/F or anything earlier than the L2040 unless we are crashing (and then only move to safety if you move before the crash - you don't want to lock in losses). If you sit in the G Fund you will get another Social Security check when you retire, the F Fund will bump it up a little bit. Those funds set you up for the Alpo Meal Deal Retirement Plan. Also, don't count on future politicians honoring promises of past politicians. You are at an age that you should not care if you get a pension or Social Security. Just consider it either lost money or your tip money at retirement.
Just guessing - based on your numbers - but you will be able to retire on about double your current gross income. Keep investing as you are but only in C/S/I while you are young. If your numbers include a timeframe of minimal or no investment than you will be enjoying your golden years with a Winnebago and a boat with a captain and good scotch. Yummy...
Finally, get into this sites AutoTracker. Not for the smack and competition - unless that is your cup of tea. But for an understanding of how well your account is doing without the pollution of your contributions. At your age and account balance those 20% contributions will dramatically skew what you think your performance it. You should be shooting for 8% - 12% per year. The S&P500 will get you there. That is the C Fund...
Lookin' up at the 'G Fund'!!!
I'm 38 and have about $70k so far, but I've only been in 3.5yrs. I also have an IRA.
Thank you Boghie! I like the sound of a winnebago and boat! I'll look into the auto tracker, I haven't had a chance to play around with it yet
27 and $38k aiming for 40 by end of years...
I also own a house with 15 years mortgage @2.125% planning to use as a money maker after I retire from the military, or sell for a profit.
I worried about my financial futures a lot, so much that my psychologist say its not normal. I plan on retiring when I am done with my military service.
First, I want to say thanks to Tom for that great idea by Rick Edelman.
To stay on topic, I'm currently age 40 and have just under $89K in my account. I'm pretty aggressive with my account, and even the 10-year historical return rates on the TSP site will show that it's possible to average 15-20% per year - even in bear market years. I'm actually not a fan of TSP, namely because the lag time required for IFTs and because of the 2 IFT/month limit. If it wasn't for agency matching, I wouldn't add a penny to my account and would instead put it in my Ameritrade account. Alas, I contribute 6% of my pay - just a little more than the amount needed to get the max amount of "free" money added in by Uncle Sam.
I'm hoping to have $100K in my account by the end of this year, and at least $2M - if not $3M - by the time I retire.
Advice for newer employees: high interest will get you a MUCH higher account balance over the long run than large, regular contributions with a lower interest yield. If you really want to be well off when you retire, it can definitely be done. But you have to do some homework and actively manage your account yourself. Don't just stick your money in the G Fund (which typically will barely even keep up with inflation, if at all), and don't expect the Lifecycle funds to do all the work for you. When the C, S, and I funds go into bear markets, your account balance will go down with them even though you're in the L Funds.
70C/30S as of 12/15/2014
I am very very surprised that some of you guys been saving for 20+ years and have not been millionare or close to there. Which make me think if I am saving enough :?
S&P 500 (C fund)
||Dow Completion (S fund)
||EFA (I fund)
||Bonds (F fund)