I’m currently 19 I turn 20 next month. I currently have 80% C fund, 10% S and I funds all in stock. I started by placing a chunk of my bonus into the tsp which was about $4,800 and in 7 months that money has grown into almost $17,000 and I’m surprised how fast it’s grown! Extremely happy with my results so far!
Started my career as a GS-5 making $21K. I started contributing 7% to the TSP on day one. I increased my contribution 1% every time I got a raise; a step increase or a grade increase. Today, 26 years later, I am a TSP millionaire and plan to retire at age 57. My wife and I have lived frugally, buying used cars, thrift shopping for clothes, avoiding debt, and living within our means. We prioritized investing for retirement and our daughter’s education over buying “stuff”. We did this while my wife stayed home and raised our girls. She does clean houses on the side, earning about $12K to $15K annually, which helps. With my FERS pension, the Social Security Supplement, and TSP withdrawals, we expect a retirement income 80% of my current government salary. Our income will actually increase once I reach age 70 and start drawing Social Security. God is good. It is possible to have a secure retirement if you start investing regularly and early, even in small amounts.
Currently active and sitting on 140k in my Roth. Got about 5 years to go before retirement. I wouldn’t have to add another dollar and I’d hit 2 million at withdrawal (65 instead of 59 1/2). I’m going to keep maxing till retirement and see how big I can get it to balloon up to.
I like your strategy. You don't panic. If you have a solid multi-year strategy, stick with it after a bad year. I'm not a fan of the I fund or the F fund either. Roth is a good idea if you are young and/or maxed out and could contribute more. By contributing Roth you are effectively able to contribute more in value. In other words $30k Roth is worth more to you retired than $30k traditional because the taxes are already paid. People should look at their own situation and see what makes sense but consider Roth.
I had my TSP investment in the L2040 fund for more than a decade, and THAT was a very bad idea. I realized that the 15 year return on that fund was only 7.59% return rate for a 14 year period. The C fund was at 11.89% for the same time period. That's a HUGE difference. So I went with 60% for the C fund and 40% for the S fund currently. I moved all my investment there and future allocationa. I don't need my TSP for another 18 years minimum so I can handle the risk. I don't need G funds in my current situation! I didn't pay attention to those little details. Thanks to guys like you, now I know what to do exactly. Thanks!
I did the same thing. Mines was in the L2040 for the past 1year in a half. I just switched to C and S fund the other day. I have 25 years before I can retire. I am concerned for inflation and recession that can happen, or, will happen.
I agree that C&S are the ways to go. I recently changed the allocation to 80-20 C and S respectively. Key thing is to do your best to increase your contribution amount every year, especially with the salary increases. Hopefully, you can max it out as soon as possible. Time in the market is key. Contribute early-especially at least 5% so you get the maximum match!
Its April, 2024. Over the years (I am 73) TSP has been an excellent financial deal for government employees. Just remember its a long term approach to help you live out the last years of your life. Other investments along with your TSP are also advisable. And while now you might think you want to retire. Many will still want to be engaged with some type of work or hobby. Have friends of different ages. Ever wonder why sooo many rich people, who are self made, continue to work well beyond retirement age? Because its fun.
Interesting. Having never worked outside the private sector, I had no idea what this was about. Thank you. I learned something this morning. I may never need it, but knowledge never hurts.
Your videos are the best..I'm 5 years from retiring at 58 and made many mistakes over the years after my divorce...I am trying to be aggressive now......
The most important thing is to recognize the mistake. I recognized my $110k mistake and I’m not going back to it. You’ve got this and I’m cheering for your success
Look at the financial situation of some elderly individuals who have nothing saved for retirement. That extra 5-10 hrs per week, or what ever you decide will benefit you in the future. You want to take advantage of compound interest. Just trying to help, at the end of the day you're an adult.
Roth is for Rich. As a CPA, I told my non rich clients to go for the tax benefits now. Basically, put most of your money into a traditional account. If you want to put some in a Roth, put enough in to pay for the tax bill, in retirement, of the tax-deferred (non-Roth / traditional) funds you contributed. Why? 2 reasons: 1) Why would you give up your tax benefits now, in your high income earning years where you have to pay the most tax just so you can not pay tax on retirement where you income is only 60% of what you make now, for the average person, and your tax is also 40% lower?…you’re basically maximizing your tax expense … paying maximum tax, for no reason. 2) For the rich, max away. But for someone of modest income… I would always have the discussion. The client would say, I only have limited funds. My financial advisor recommended investing in a Roth. I would give them their tax return and say … here’s how much tax you owe if you put money in a traditional ($) and here’s your bill if you don’t take the tax deduction and put it in a Roth ($$$), which bill do you want? People don’t realize that they’re apples and oranges. A 5,000 investment in a traditional plan is equivalent to 4,000 in a Roth. You just lost the buying power of $1,000 … because of the tax. The wealthy don’t feel that, only the average person does. The most important thing is to invest … NOT that it’s a Roth. And investing all your money in a Roth in your highest income years just doesn’t make mathematical sense anyway. It’s a scam by the govt to get people to pay more tax now, instead of paying yourself first.
@@Kep19901 it’s not a legal way to cheat taxes. Please go back and reread what I wrote and do some math on this. The main fallacy is that people think $5,000 after tax is equivalent to $5,000 before tax (e.g., tax deferred). Those are not the same things. If you earn $5,000 and then you pay 25% taxes on it…it becomes $4,000. So if i give you $5k and say don’t pay taxes now … you have $5k to invest. If I give you $5k and take out taxes before I give it to you, I’m not going to be giving you $5k. You’ll receive only $4k from me. So now someone who invested tax deferred, before tax, has an extra $1,000 to invest and compound interest that you don’t have. Now if we doing that every year for 30 years…with compound interest… so now compare 30 years of investing $4k to $5k. Compounded by the fact that, based on our current tax system, the likelihood is high that your income will decline in retirement because your income will be lower. And what you don’t withdraw continues to compound interest. So do the math in that and tell me about how you’re cheating the tax system. No sir … you’re being cheated. It just sounds like a good prize at the end, but you end up with less.
Your video and videos like yours have made me think more about my TSP strategy. I think a lot about money and I think going forward I'm going to go use the TSP by going all C fund and put in $700 per paycheck equivalent to picking up 1 share of VOO each week. Of course the TSP is not my only account.
My return is over 20% this year and have been averaging around 15% for several years. Buy low/sell high strategy. I allocate my contributions 70% C, 30% G then if the somewhere in the 2cd or 3rd quarter of the year if the market is down i move my entire G balance into the C and S and buy funds at low price. Ive been getting big returns this way but do whatever works for you. Investigate all strategies
Still in service @ 24 years, with everything in the C fund; planning to get a Civil Service job (reluctantly) towards the end of 2024 only so that I can continue maxing that fund for another 10 or so years. That will take me to 55. From there I will probably off ramp from "working" and focus on passive income generation (which I am also dabbling in....anticipating self sufficiency in 5 years and interest payments being sufficient in that 10 year window); however, if my passive income reaches 15k monthly at anypoint in time I'm done
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I agree with investing in C & S funds regardless of age. As I get older, I still want the higher long term track record of the C fund. I will not shift to a lower performing fund like G because I don't agree that bonds are "safer," especially in a high inflation environment. I will shift less to S and more to C as I get older, but never F or G funds personally.
My strategy is to save and keep 3 years of living expenses in laddered CDs ready to spend the first 3 years of retirement. If you are more conservative, make it 5 years of living expenses.Then put everything else 100% in the C fund, which is on average the highest yielding fund. When you retire, pull funds from your TSP when the markets are up to keep 3-5 years of living expenses in CDs, giving yourself a raise as you desire. You'll always have 3-5 years of liquidity to ride out bad markets. If you go with a Roth TSP, you won't have to worry about RMDs.
Good Q as one of the other major benefits of a Fed retirement is getting to keep FEHB, but getting to retire early and loose that is not a bad option either.
Would appreciate a vid with a strategy to roll over TSP (Roth IRA) to a personal Roth IRA once a person is ready to live off their investments. Fidelity informed me today that individuals can select their own stocks with funds rolled over from another Roth IRA like TSP once it's in the account. All tax free! I like the idea of creating a cash account and diverting the dividends too it once the cash has been reinvested into the personal Roth.
Can you explain more about converting ROTH TSP to ROTH IRA? I'm still confused with converting it to ROTH IRA and be able to pull that money early before 59 1/2? How's that work?
Why do your Investment spreadsheets appear to be backwards, traditional and Roth? You are not allowed to contribute $20k plus to a Roth annually, but you can to a traditional. The chart that shows $6k annual contribution should be the Roth, but you show it as traditional. Please let me know if I’m missing something here. Thank you 🙏
@@lyndajones1133 I agree, but it’s still subject to the 2024 cap of $7k for those age 49 and younger, $8k for age 50 and older ($1k catch up). The excel spreadsheets are not labeled correctly, which means this whole video is incorrect.
@@darrellq6954 If your career path typically takes you to 24% 32% or higher tax bracket favor Roth TSP now and traditional TSP when you reach those higher tax brackets. If you ever drop to 12% FTB favor Roth TSP. If unsure as default consider traditional TSP and $7,000 Roth IRA. In any case strive to contribute as much your income and budget allows and reach max contribution $23,000 to TSP as soon as possible.
I agree we already work enough n majority is taking in taxes. Not mention inflation and cost of living is ridiculous. I hear u with the second job but whatever happen to just living. I guess I’ll be eating sandwiches for next 20 years n praying
I thought i can only contribute up yo $6500 into roth IRA. My salary is under 100k. I'm confused as to how you were able to contribue over 20k into your roth ira. Isn't there a penalty for over contribution?
hey great content! i've been maxing out my tsp for the past 3/4 years but holding it in traditional.. when would you say is a good time to convert it into Roth? Or should i just leave it in traditional until retirement age? i'm currently employed atm and earning my highest in my working career. thanks!
I don’t know when is the right time to convert to Roth because I don’t know your entire financial situation. I’m not personally converting anything until I retire but that’s just me. You may be in a higher tax bracket that might cost more to convert now versus later. Again, it depends on your entire financial picture
@ *keith r* as you're earning your highest in your career you most likely should be favoring contributing to traditional TSP. If you expect an increase in salary to bump to an even higher Federal Tax Bracket you could go Roth TSP now and go traditional TSP once you reach that next FTB. You could complement your max t-TSP with maxing out Roth IRA.
Whats your age and how long do you plan on working/contributing? If youre in your 40s or younger maybe just put 5% or whatever your match is in your traditional balance then try maxing out the roth if you can comfortably. That way when you retire youll have money you can take from traditional on a monthly basis ans youll have a nice nest egg in roth tax free that you can use for large purchases that wont mess with your tax bracket.
I am relatively new to tsp and was elected into a 2050 lifecycle fund, I really need to maximize my investments because I honestly don’t think I can hold out that long😂
Not sure what's going on with RU-vid comment notifications but I should've replied to this. Yes, I'm still 50/50 contributions but C is outweighing S, so I'm going to reassess in a few months to figure out my allocation strategy.
Contribute as money as your income and budget allows with minimum 5% to receive 5% GOV match and as soon as you can reach max contribution of $30,500 year. C Fund as your core or majority holding.
She's "lucky" to be a TSP Millionaire. All she did was ride an unprecedented C Fund wave that lasted 10 years until last year when it tanked. Her TSP is also still way too exposed to volatile stocks in retirement.
I am federal civilian employee first i invested L2040 the loss is greater than earn then i invest C 80% and S 20% same thing still i am lossing money than i transfer my investment 100% to G fund let’s see how it goes
Suggest you read more on investing and historical return trends of the markets. You've not "lost" anything until you sell, put your money in the TSP every month and ride the ups n downs for 30 yrs and you'll have a great retirement nest egg.
May I ask, are you maximizing your contributions to whatever the max is this year? And are you basing your example on the max contribution amount ? Sorry I got lost on that part. Thanks in advance.
Roth all the way, but google your Q as there are many resources and calculators to help you decide. And if you don't make a career of the military consider getting a Fed job after you get out.
Favor contributing to Roth TSP while in relatively low tax bracket and favor traditional TSP when relatively high tax bracket. If making less than $47k or 12% Federal Tax Bracket favor Roth TSP. After 2 years of service you'll receive 5% match if you contribute at least 5% of income.
@@dalecurtis5660 i will start by saying I’m not an expert in finances, but if your retirement is big enough, just allocate more into G 60-40 like you said. The C fund lost a lot of money last year, it should be rising steadily from this year out. But the G fund is always steady, so it’s a safe bet. Better to slightly make money than to lose a lot of it
@@dalecurtis5660 you need to ask yourself if you need the money? why not leave it CSI and start to draw from it in you mid 70s. 24k from an investment account isnt really going to afford you anything more than around $80 a month if you were withdrawl 4% a year starting now, if you waited 10 years at 10% interest with no additional contributions, you would end up with around $62,000 at age 75. 4% withdraw rate then would pay you $206 a month. The choice is yours.
Hi there I have a question I joined military in 2017 I did not changed for blended retirement b/c I did not know . Now on my LES retirement plan it says choice . what does that mean ? Should I still contribute to tsp I don’t get 5% match is it worth it . I thought to put 20 percent Roth and invest in stocks like c/s/f fonds. Any helpful tips for me thank you in advance
So I just realized I am not really utilizing or diversifying my tsp. I have about 6k now n I’m 33 and it’s all been going into the L fund.What advice do you have on where I should diversify my funds to
In no way am I even close to an expert or even well versed. I've only been in tsp for less than a year. However my advice would be to get out of the L funds all together. The channel "Jake Broe" has a bunch of tsp videos and even a video specifically why the L funds are a bad idea. Generally you should have 50-90% of your tsp split up in the C S and I funds, with the rest being in the G and F fund
I can't tell you what to do, nor should any RU-vidr lol but I can tell you that I've never been a fan of the L Fund because of how to allocate their funds. I did a breakdown video on that ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-OJRlVHftqwY.html
IMO skip the L funds, from the day you start a Fed job in your 20s to maybe 3-5yrs out from retirement, all $$$ should be in the C or S fund, ride the ups and downs, don't panic. And max out as soon as you can and at 50 do catch up contributions if you can.
Honestly, financial stuff goes mostly right over my head. I need someone to tell me what each fund is, why I would want to invest in each, how much to invest in each to achieve my goals. I want to maximize my investments, but I don't really care about the details.
I hear ya man and I gotta say I had the same thought until I learned a lesson that my investment was in the wrong fund for years making a minimal return because of my unwillingness to learn. I care about the details now because I can’t ever go back in time to correct my past mistakes
i had the chance to get in to the BRS 4-5yrs ago but i think i cant anymore. i dont have a match at all. any idea if i can still get in to the BRS or anything? im still serving but am a traditional DSG so my retirement is offset 3mo for every 90 days of AD i go on, so i think right now i have it down to age 58.
I stopped contributing into the L-fund and started putting contributions towards C and S funds, but I am not sure if I should move the money from the L fund or leave it in there.. Any advice? I have only been in federal service since February 2022.
I can't specifically tell you what to do, but I encourage you to understand how those L Funds allocate stocks and bonds. I did a several video on that here ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-OJRlVHftqwY.html
@@FIREPsyChat yeah I was maxing out my TSP by Sept each year so would not get matching Oct, Nov, and Dec. this was missed for 5 years. One took the max and divided it by 26 it took me 12 months to max instead of nine months.
Never would keep that much money in the TSP, which has an awful web site and terrible customer "service". I do business with a number of different financial firms, and the TSP is by far the worst except that its expenses are low.
Sorry but just because the website is "awful" and bad customer service does not seem like a reason to not keep money in the TSP, and an active Fed has no choice.
The employer contribution in the TSP as of right now is going to the Traditional portion of your TSP. If you contribute 5% Roth, you get 5% traditional. If you contribute 5% traditional, you get 5% traditional. Just because you work at the USPS, it doesn’t mean the TSP rules are different. The match works the same unless you’re a military member under the legacy retirement system.
tapping into your tsp at 45 would be a finacial disaster LOL i cannot believe sit there and say from a 125K balance you would pull 45k.......great tips. Youd be back working in 2 years.
