You also had a wait period before you could start investing in TSP. I was hired in Oct 1991 but couldn’t begin investing until July 1992, 9 months later. That’s almost an entire year of not being able to invest ☹️.
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That is a real problem with most 401K plans. If there is any kind of required waiting period most people get used to the extra money and it hurts to start contributing. The government did the right thing when they changed it so new employees are automatically started off in the TSP unless they elect not to. A lot of new employees don't even know they have money going in there, so it doesn't hurt. Never had it, so they don't miss it.
If you haven't already, your age now is the best time to max out your contributions to $18500 (or just set the bi-weekly contribution to $711). If you still don't have any hard 'home' requirements like a mortgage or child yet, I would go as far as recommending a lifestyle change to do whatever it is you need to do to save that $18500 per year, regardless of whether its affordable. Make the lifestyle affordable.
I'm 38 and retirement wise, I can say that it doesn't really matter whether I work my way up in Government-work any further. Doesn't matter. In my case I'm at a point where I need to decide whether it makes sense to continue donating $18500 or just the minimum of 5% into the TSP since I can't touch it for other investments for another 20ish years. Its a pretty strange mindset to be in.
Save as much as possible, and also conserve a significant portion of brain power for investing or for something else you love on the side that can generate income!
You figured it out, mbrogz3000. You’ve reached the point that managing your TSP is more beneficial than working to increase your high 3 (maybe soon to be high 5).
I just retired this year at age 56 and my EBIS estimates have been telling me that it has been costing me money to go to work every year since age 51. It’s been hard to stay motivated the last 5 years knowing that. Several co-workers I left behind that have not reached their MRA have come to the same conclusion and have the same motivational struggles I had. Now I just try to remember what day of the week it is.
I reduced my TSP to 5% the last 7 years I worked. Doing more didn’t really affect the TSP total when I retired. Instead, I bought a new car for the wife and a truck for me. I have been driving beaters to work for 34 years so I could contribute more into TSP when I was younger. It’s nice having a new vehicle. The money I put in back in 1987 is doing a lot more for me now than what I contributed in my last pay check. I have found TSPTalk helpful in managing my TSP account. I have been a member of one of the Premium services for a few years and have benefited from the additional insight it provides.
It is not a strange mindset to be in. It eventually becomes reality.
I don't claim to be an expert, but sure. I used to have a much better feel than I do now. What has driven the market for ages is not moving it like it used to. I feel like we are getting dangerously close to a correction, but this is the time of year that stocks generally ramp up. I'm really going to look closely in March 2019 or so.
I don't know what percentage you are contributing, so this may not be helpful. There is a lot of talk here of maxing out at the $18k allowed. Everybody can't do that. You really need to at least be doing the 5% that is matched, or you are leaving money on the table. If you start with that, and as you get pay increases, increase contribution 1% or so a year until you get to 10%, you'll never miss the money. I'm 54 now and I have pretty much always done the 5%. I'd be so much better off if I had increased it in my early years gradually up to 10%. It really wouldn't be a lot of help to do now for me. The bulk of your TSP balance at retirement will be the result of what you contribute the first half of your career and the compounded earnings from that.
I've been in 29 years and contributing 5% and my balance is $704k. If I had been doing 10%, that would have been right at a million.
This is such a good thread! Any updates out there?
Me:
Current Age: 44
Current TSP Balance: $405,000
Years of Service: 26
Planned Retirement Age: 58 (Hopefully)
TSP Strategy: (C-70%, S-20%, I-10%)
Contribution: Max ($19,500 annually)
Grade - GS14
Planned TSP Balance at Retirement: $1.4M
(always open to any tips/advice to make my portfolio better!)
I notice that a lot of you are 100% in the C fund. Is that recommended?
I lied... I forgot I changed my TSP Strategy and cannot figure out how to edit my post anymore.
Here is the current distribution:
TSP Strategy: (C-55%, S-40%, I-5%)
Let me know if anyone thinks I should make any adjustments.
Mine are at
C-34%, S-33%, I-33%
Like you also wondering if that's a good choice considering events in China
Exactly!
Just understand that at the current time, the "I" fund has a high concentration of funds in Japan- it's the stock index of major industrialized nations, and does NOT include any developing markets +(like China, India, Pakistan, etc). It is mostly Japan, along with major European nations. If you are ok with that- that's fine. Japan has underperformed for the last 25 years.