Retire at age 56? You don't get your SS benefits till you're 62. Did you take the FERS supplement?
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On Apr 11, 2017, at 12:55 PM, Gary tweet_pa@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:For me when I started working under the FERS system I had to wait a year to start saving money in my TSP. Then for a number years I was capped at 10%. I did the best I could to save as much as I did in my years. I am not rich but I did manage to retire at my minimum age of 56 thanks to my military by back and living within my paycheck. I would imagine that higher salary earners should have no problem getting above the 1 million make in TSP.Sent from my Verizon 4G LTE DroidOn Apr 10, 2017 12:26 PM, "sarah_oz@yahoo.com [TSP_Strategy]" <TSP_Strategy@yahoogroups.com> wrote:
TSP investing: What would Einstein do?
By Mike Causey |
April 10, 2017
Historians can't agree whether Albert Einstein, one-time government employee, actually said that "compounding is the eighth wonder of the world," or words to that effect. But if his federal job (with the Swiss Patent Office) had an investment option like the Thrift Savings Plan, odds are Mr. E=MC² might have wound up as a millionaire by investing from day one, investing steadily, taking advantage of the government 5-percent match and the miracle of compounding.
Many, if not most, of the current crop of TSP millionaires did it the hard way. They didn't bring money into government from their outside retirement accounts. They invested for decades, stuck with the C and S funds (stock indexed). Those under the CSRS system didn't qualify for the 5-percent agency match. But over time they hit the seven-figure number. More are added each month as their account balances edge over $999,000. And while looking at the tables is fascinating, and helpful, hearing from an actual TSP millionaire is gold. Which is why the email below was such a treat. Check it out:
Mike:
You have recently written about federal government employees with $1 million-plus TSP accounts.
I am one of them. How I got there is important. I started saving immediately when I joined the government 28 years ago. First, I contributed enough to earn the match (free money after all) , then every time I received a raise, I added some of it to my contribution until I maxed out. I never missed what I didn't have on hand. At 50, I took advantage of the catch-up benefit.
Throughout, I invested in a balance, diversified set of investments (C, G, and I). I knew I was investing for the long haul, so I weighted toward stocks (e.g. the C fund at about 70 percent). And I didn't pay attention to the daily market fluctuations . I stuck to my strategy through the market highs and lows. I never tried to time the market or react to changing market prices, because I knew I was in for the long haul, where fluctuations inevitably smooth out.
And then I benefited from the power of compounding. How powerful?
Here is what my last TSP showed:
"Your Lifetime TSP Contributions:
"Traditional $285,745
"Roth $34,654
"Catch Up $33,780
Total $355,179."
That's right, my contributions of $355,000 turned into $1.1 million over 28 years.
I know someone wrote in and said you should not write about millionaires in the federal government as if somehow federal workers were given free money. I think the above example shows that is hardly true."
—Anon
The good news is that the number of TSP millionaires went from 3,000 to 5,559 last year. And more are moving into the $1 million club every month, thanks to the large number with balances in the $700,000 to $999,000 range. Statistics and charts are fine, and helpful. But hearing from actual millionaires is very neat. Let us know when you hit the $1 million mark, and how you did it.
Posted by: Gary <tweet_pa@yahoo.com>
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