Hello TSPTalk

[Gundam1s]

Hello,
I have had a TSP account since late 2008 when I joined the army. Some financial advisor was really promoting it in a 8 hour long finance class...And now I'm 20 yrs old with at least 10k in my TSP, I contributed the 10K while deployed 09-10, not the best idea when there was the SDP, but I'll know next time. I set my base pay to allocate about 27%, about $530 a month, into my TSP starting this month. (before it was like 6%)

Well thats my story and where I'm currently at. I hope to learn more from you guys and would appreciate any advice you guys have.


Thanks,
Gundam1s

[Nate]

From one soldier to another, welcome to the forum. Starting your TSP was the first smart decision, coming here was the second! Most soldiers who enroll in TSP let it sit in the default "G" fund and forget about it. Theres alot of good resources here! My advice, dont be afraid to ask questions! Welcome again!

[Boghie]

Gundam1s,

Your contributions at your age will make you very happy.

To the tune of about $3.8 Million at retirement age. And you know what... That $6,300 this year will be hard - but when your salary increases over the years it will be chump change. Especially when one factors in inflation.

By the way, I didn't increase your contributions with inflation. If you increase the $6,300 by inflation every year you will end up with $5.5 million.

I think you could live off of $65K (without increasing contributions) or $91K (increasing contributions) while retired.

Time is more important that money right now.

If you can do the 27% now great.
Just do your best to always get 15% in.

[uscfanhawaii]

Welcome, GUNDAM1S!!
We just had another member join just before you, and lots of members commented on his post. For a start, you might want to go look at Yehiah's Longer Term string in Today's Posts to see all those recent posts!
Good Luck! You have already done the first step, which is to put as much into TSP as you can! :cool:

[tsptalk]

Welcome Gundam1s! Your actions tell me you will do very well in life. There's not many 20 y/o's with the foresight to know starting early is the key to big savings. Congratulations!

[Gundam1s]

Thanks for the warm welcome and I am glad to a part of this awesome community.

All my funds have just been in the G fund so I dont know about millions Boghie :cheesy:, but I am going to keep an eye on the other funds and maybe get comfortable gambling with the IFT in the future.

For a single soldier I think its pretty simple to put this much away each month. I do admit its much harder saving money while back in the states...and its SOOO tempting to go and buy a motorcycle, MUST FIGHT URGE!!

I'll read Yehiah's post.

Thanks,
Gundam1s

[Boghie]

Gundam1s,

I don't gamble with my retirement assets.

At your age there is NOT A SINGLE financial advisor that would recommend the 'G Fund'. I did the same thing for the first six years of my employment and have been making up for that mistake ever since. Everybody makes that mistake. Probably everybody here has made that mistake. But, you don't have too:p

If you stick with the 'G Fund' you will end up with about $1.5 Million which will get you about $22K a year after taxes. I call that the 'Alpo Meal Deal Retirement Plan'. When you stick stuff in the 'G Fund' you are using the same investments as Social Security. The 'G Fund' is only a couple of points better than a bank savings account. The 'G Fund' has a normal return of 6.15% (https://www.tsp.gov/investmentfunds/returns/returnSummary.shtml) (but, look at what it has done over the past ten years:worried:)

At your age you can make up for annual drops and even crashes like 2008. You will never get time back. Make your money work for you. The same investment in the 'C Fund' would net you $4.2 Million and about $75K a year in after tax income. The 'C Fund' has a normal return of 9.31% (the last ten years include two dumps which kinda game the stats, but over the last 45 years it has averaged 11.03%).

If you don't panic than the C/S/I Funds are the place to be. You have to accept some negative annual returns - but the end result is so tasty you probably will not have to have any of your money at risk once you reach about 35 years old.

Maybe stick the money in the L2040 till you poke around here some more. You will reach 65 in 2055 so even the L2040 is too risk adverse for you. 20% of that fund is in cash (10% in the 'G Fund') and bonds (10% in the 'F Fund').

[Boghie]

Yikes, the above sounds kinda strong and humorless...

But, I am too lazy to rewrite it:p

[Gundam1s]

Thanks for the enlightenment Boghie, I've known the G fund wouldn't make much and known the other funds ended up with a higher positive interest even with its negative days. I will probably just follow someone on the autotracker until...whenever.

Thanks,
Gundam1s

[nnuut]

Welcome to the Board Gundam1s!
Best of luck with your investments!:D
Norman