The retiree didn’t understand that your portfolio ‘design’ should make it so you NEVER have to try and time the market to avoid losses. The market will go up and it will go down. Assuming most of his money was in the C Fund and his annual withdrawal was $60K, if he had stayed the course, he would have been fine.
Do you think that TSP will ever allow you to pull money from certain funds only and not a little from every fund you’re invested in? I’m 13 years away from retirement
Interesting question. I have seen TSP reps address this before, indicating that they do not see it as an issue for retired feds. Whether this is fully the TSP's position is up for debate. I think it could help, but wouldn't solve, the withdrawal challenges within the TSP. They're not unique though, many 401ks have the same kinds of challenges for retirees.
This idea of moving everything to the G fund is very tempting. I've heard of people doing this. But I've held off over years mostly because there is no way I can time the market properly. I've always felt the need to ride it out and not do anything knee jerk. I don't mind the risk, I can live pretty fugal when I have to. Just always thinking long term. Maybe a subject for a video - when to live frugal and when to live it up.
Great points! Good retirement plans build in contingencies for when markets take a big hit, and knowing how to cut back and where is important. Definitely hold off on using cash for renovations during massive bear markets. Some people choose to use OPM's money...(Other People's Money), that is, a bank in the form of a HELOC (that's my only federal employee joke!). Sometimes HELOC interest can be deductible, just make sure to check with your accountant.
@@eric2394 Probably not, but it depends on what you're trying to accomplish. 100% in any fund is likely not the best strategy. There is a blend of diversified funds that is best suited for a family when they're retired. Unfortunately it's slightly different for everyone, so take care not to use rules of thumb!
