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Thread: Who wants to be a Millionaire?

  1. #1

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    Default Who wants to be a Millionaire?

    I found this CNN website that will calculate how long it will take you to reach 1 million dollars that factors in how much you contribute per year and and you can input average interest.

    Example: Deposit 15500.00 per year earning an average of 14 percent interest will be worth 1 Million in only 17 years and 7 months! This doesnít even factor in our matching funds of 5 percent for FERS employees!!

    http://cgi.money.cnn.com/tools/millionaire/millionaire.html?step=result&_tpl=millionairecalc. html&initDepositTax=0&paymTax=0&paymPerYearTax=1&f edTaxRatePct=25&stateTaxRatePct=6.0&initDepositTax Def=0&paymTaxDef=15500&paymPerYearTaxDef=1&intPct= 14&totReturn=1000000&x=53&y=17#calctop

    You can also plug in your current balance and then plug in your average interest earned. It will give you a pretty good idea of how long it will take you to reach your goal. If you play with the numbers, you will find the importance of putting in the maximum amount allowable when youíre starting out.

    My current agency doesnít allow anyone to attend retirement seminars until they are within 5 years of their MRA. As far as Iím concerned, the people who need advice on retirement are our newest employees. I was lucky enough to have a good mentor when I started my civil service career. He took the time to explain the importance of investing over time. He put together a spreadsheet taking my 1985 fed pay and showing me how an account can grow over a period of time. It was very useful information and it helped guide me in my investment strategies to this date.

    The point I would like to make is that, we now live in a time where sharing information with our fellow fed workers has never been so easy. The new employees now have the tools and resources to study investment strategies. They can plug in their current numbers and get an accurate snap shot of their future.

    My mentor and I were using a 1985 IBM computer to crunch the numbers. Itís a real dinosaur compared to todays modern lap tops. We live in the information age today and sharing info is a good thing. Good luck with your TSP investment!


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  3. #2

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    Default Re: Who wants to be a Millionaire?

    I agree 100%. I try to pass on the knowledge to every new employee.

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  5. #3

    Default Re: Who wants to be a Millionaire?

    Quote Originally Posted by Aviator_Guy View Post
    He put together a spreadsheet taking my 1985 fed pay and showing me how an account can grow over a period of time ... My mentor and I were using a 1985 IBM computer to crunch the numbers.
    Boy, that must have taken a lot of time to compute. Sounds like a good use of government resources. :toung:

  6.  
  7. #4

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    Default Re: Who wants to be a Millionaire?

    That 1985 IBM computer was my personal computer and it was put together by a good engineer friend from the college, ďGeorgia TechĒ. It had one of those gigantic 5.25 floppy drives. I think it was using something like DOS 1.01 or something!!

    My son just purchased a new lap top that uses Vista. I think if you timed how long it takes to boot up the new Vista operating system and compare it to the old IBM using DOS, the old IBM might win the race, but Iím happy with these new machines.

    Quote Originally Posted by charmed855 View Post
    Boy, that must have taken a lot of time to compute. Sounds like a good use of government resources. :toung:

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  9. #5

    Default Re: Who wants to be a Millionaire?

    Use this calculator that will do all the TSP variables you can imagine.
    How to get to your million more accurately.

    http://hr.er.usgs.gov/calculators/tsp/index.html
    Official Retirement Date: 06-31-2014!

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  11. #6

    Default Re: Who wants to be a Millionaire?

    Thanks for sharing...I saw this calculator some time ago and revisited after reading your e-mail. With a 13% return, our TSP accounts (wife and I) are projected to hit $1M in 1 year and 17 months. Too bad $1M isn't what it used to be.

    This year I've been following www.thrifttrading.com for our market timing strategy. So far, so good.

    Any thoughts on your own TSP strategy that you'd like to share?

    Ed

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  13. #7

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    Default Re: Who wants to be a Millionaire?

    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

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  15. #8

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    Cool Re: Who wants to be a Millionaire?

    Quote Originally Posted by Ed View Post
    Thanks for sharing...I saw this calculator some time ago and revisited after reading your e-mail. With a 13% return, our TSP accounts (wife and I) are projected to hit $1M in 1 year and 17 months. Too bad $1M isn't what it used to be.

    This year I've been following www.thrifttrading.com for our market timing strategy. So far, so good.

    Any thoughts on your own TSP strategy that you'd like to share?

    Ed
    Hey Ed, I'm feeling pretty frisky after visiting the paid site you use and seeing that I beat them last year by close to 5%! And I'm just a dumb blonde! Thanks! (not an insult to that site, I'm just feeling very fortunate)

    GA

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  17. #9

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    Default Re: Who wants to be a Millionaire?

    For those of us that have saved "Means Testing" could happen. Soon we will have another 50 million new citizens in the lower income bracket. However, they will all pay taxes, and vote. Having a Government Retirement could soon cost you part of your social security, and having a nice fat TSP account even more. For me it's not a problem, for some it could be. Social Security is not in my retirement budget, just in case they reduce it because I'm already drawing a federal retirement check. It's all talk for now, so we shall wait and see.

    Robo

    From article below:


    " Means testing is inevitable, but it won’t be nearly enough. The only practical solution (for the government) is to print the money and inflate the currency. You begin to get the idea of what will happen to those on a pension or invested exclusively in annuities and bond funds."

    Broken Promises
    The Baby Boomer's Lament
    BY TONY ALLISON

    “How do we get around the promise that was made when people got into Social Security? How do you suggest that we tell the American people?”

    Senator Jim Bunning posed these questions to Federal Reserve Chairman Ben Bernanke during his Senate testimony in January of this year. Mr. Bernanke had no real answer, because there is no “happy” answer. The promises that were made for both Social Security and Medicare will not be kept for the Baby Boom generation, at least not with dollars that have any buying power.

    Boomers Must Rely on Themselves

    This is just part of the daunting landscape facing the 76 million-strong Baby Boomer generation as it begins to retire. The whole concept of retirement in America has changed and will continue to change. In the decades prior to the 1980’s, people tended to stay with one company for their whole career, and retire with a deferred benefit pension plan which provided them a certain percentage of their salary for life. Today, the burden has been pushed onto the shoulders of the retiring workers through the 401-k and IRA programs. Most future retirees will have to rely on their 401-k, IRA’s and a meager Social Security stipend to survive a very long retirement in many cases. Unlike the prior generation, most have no idea whether their retirement will end well or badly. Life will be much more uncertain for retirees in the future.

    A series of increases in FICA and Medicare taxes over the past 25 years was supposed to secure the retirement system for future generations. Unfortunately, those surplus funds that flowed into the system have all been spent, replaced with paper IOU’s worth less than the cost of the paper. Future retirees should understand that they can’t count on Social Security. It will be inflated and means-tested into oblivion. And later qualifying ages are already a reality.

    The key point is that for those retiring in the next decade and beyond, the individual is going to be more and more responsible for providing for his/her well being in retirement. Your greatest security will ultimately come from how much you save, how well you invest, and how well you manage your own assets. This is not the message the average Baby Boomer wants to hear, but it is the reality of America in the 21st century.

    Losing Purchasing Power

    The retiree also faces the dilemma of how to allocate the resources once in retirement. Many retirement planners suggest a ratio of 50-70% fixed income, i.e., bonds or bond funds. That may have worked in the 1980’s with unprecedented sky-high interest rates, but rates are now much lower, and inflation is higher than government statistics suggest. After paying taxes and adjusting for real life inflation (7-10%), the retiree on a fixed income is losing purchasing power every year. As inflation continues, the fixed income grows ever smaller in real terms. And don’t expect much tax relief in the future.

    Those who are already retired become trapped in a vicious spiral of declining living standards. If inflation heats up into double digits, the spiral just spins faster, and causes the value of the bonds to drop further, making it very difficult psychologically to sell a large part of one’s nest egg at a loss to reposition the funds.

    No one ever said growing old would be a picnic. But having some understanding of the pervasive level of inflation in the economy, and the potential for a lot more, will allow investors to be prepared for it, and at least partially mitigate its effects.

    Dividend Investing

    One of the ways to hedge against inflation is through stock dividend investing. This may seem an obvious plan, but many people look at fixed income as safer, more reliable and guaranteed. That may all be true, but the overlying problem is the “fixed” part. The fixed income won’t grow, and inflation will eat away at the real return every year.

    Conversely, if you choose a diversified selection of solid, mature companies with a long history of growing dividend payouts, you have a fighting chance. If a retiree has income from dividends of $25,000 in the first year of retirement, the next year it will likely be $27,000, and perhaps even higher. In the words of Professor Jeremy Siegel, “The power of the basic principle of investor return is magnified when the stock pays a dividend.”

    Due to the risk of a much lower US dollar in future years, it may be wise to include foreign blue chip companies in the mix, as well as US multinationals that derive significant earnings from overseas sales. Emphasize industries that have performed the best over time in terms of consistent dividend growth, including brand-name consumer staples, pharmaceuticals, and energy stocks. Dividend investing is of course just one method for hedging one’s retirement portfolio against inflation. I will focus on other strategies in future articles.


    US Dollar vs. Euro

    The Cost of Survival

    As the cost of the basics for survival continues to rise, the retiree’s income must rise at the same rate. How do you think the government with $50 trillion (and rising rapidly) in unfunded Social Security and Medicare liabilities will pay those bills? Means testing is inevitable, but it won’t be nearly enough. The only practical solution (for the government) is to print the money and inflate the currency. You begin to get the idea of what will happen to those on a pension or invested exclusively in annuities and bond funds.

    Saving and budgeting are still very important elements for those in retirement or planning to retire. But how you strategically build a retirement portfolio is even more important. The CPI has been down in just 2 of the last 60 years, and that included many years when the government ran trade surpluses and wasn’t buried in debt. The bottom line is medical care, food, travel, insurance, energy, etc. will cost more a year after retirement, and go up from there.


    Source: Moody's

    Grow Your Portfolio during Retirement

    There are other risks to retirement of course, including allocation risk, longevity risk, and health care risk. But I believe the most pervasive risk facing retired America in future decades will be the risk of inflation wreaking havoc on their quality of life. The ability to grow one’s portfolio during retirement, both in terms of income and principal, will be critical. It may just be the difference between a comfortable life and life on the edge. Status quo vs. Alpo. That may sound harsh, but a debased currency always inflicts the most pain on those with the fewest resources, and no ability to hedge the inflation. See Weimar Germany in the 1920’s and Argentina in the late 1990’s.

    My focus tends to be on the big picture issues, especially those concerning the Baby Boomers. Perhaps this is because I’m one of the 76 million. But the fact is that this is the largest demographic group in the history of our Republic (nearly 40% of the population over age 18), rocketing toward retirement like an unguided missile, with unknown but significant consequences upon arrival.

    Everyone’s needs, goals and dreams are different in retirement. But no matter how frugal or how financially secure, everyone needs to protect their purchasing power. Don’t settle for a cookie cutter approach. Do your homework. Find the plan that works best for you. Don’t be seduced by easy answers. An inflationary future requires recognition of the situation, and proactive planning. This means saving and investing wisely, well in advance of retirement. Anything less is living in denial, which in this case is definitely not a river in Egypt.


    Wishing you a good evening and a prosperous retirement.

    http://www.financialsense.com/Market/wrapup.htm


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  19. #10

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    Default Re: Who wants to be a Millionaire?

    I will have a four tier retirement, 34% high three, real estate, TSP and SSA. But, to be perfectly honest, I have never factored in SSA since the program is a disgrace. You just canít take out more from a fund than you put in. SSA recently sent me a statement and it shows exactly how much I have sent them since 1972. Can you imagine how much my SSA account would be if your contributions were allowed to grow at only a 12% rate? Iím pretty sure I shredded the SSA report, but if I can find it, I will crunch those numbers, it should be a pretty interesting figure.

    My son and I drove to San Francisco last weekend and we took some pictures from Treasure Island. This is an old Navy base and it sits basically abandoned now. It has an excellent view of the San Fran skyline and we were taking pictures from it. I guess if SSA were to not pay out, maybe the feds will settle and give me some free real estate on TI in exchange for not paying out my SSA? They probably sold that real estate for 1 dollar or something! LOLÖ Anyway, good luck with your TSP retirement investing!

    My TSP is the bulk of my retirement port folio. I see my retirement income basically as follows:

    TSP / Personal Investments, 70%
    Real Estate, 15%
    Fed Annuity, 15%
    SSA 0.0%

    Note: As you can probably tell, I support privation of SSA, but only if it is well managed such as the TSP.

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  21. #11

    Default Re: Who wants to be a Millionaire?

    As of today, I will have (hope) made it halfway to my "power account"! Also bumped contributions up to 15%. Found out how effectively it reduced my taxable income so I am not significantly reducing net pay .

    Going to keep bumping it up with hopes of getting to that $15,500 without too much pain.

    At this rate, looks like I will easily get to my Million Dollar target in the next 9 years or less...

    Good luck and prosperity to all!
    Last edited by SkyPilot; 06-01-2007 at 01:11 PM.
    Official Retirement Date: 06-31-2014!

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  23. #12

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    Default Re: Who wants to be a Millionaire?

    Today the Office of Personnel Management (OPM) posted a new "retirement ballpark calculator" on their website.

    http://www.opm.gov/benefits/ballpark/menu.asp

    I tried it-

    Was not as user friendly as other retirement calculators out there, but still, it's not too bad.

    Give it a spin.....

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