Thanks, but I have done lots of reading on the subject trying to understand why compounding is mentioned so often in regard to the TSP. Even financial advisors mention it but I'm still not convinced that it's a thing. The explanation in your tsp site link doesn't make sense for a TSP account. It perfectly describes how a savings account works though.
On Fri, Jul 19, 2019 at 7:09 AM barbs miandsh2000@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
On Friday, July 19, 2019, 07:54:03 AM EDT, Mike VanAmburgh mjv325@gmail.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:But does money in the TSP really compound? If I have a savings account with a guaranteed 1% return, I earn $10 on my $1000. The second year, my balance is now $1010 and I earn interest on the interest (the $10 I earned last year).How are we earning interest on our interest in regard to the TSP? Considering our account balances are simply (#of shares) x (share price), how does compounding play into that?On Fri, Jul 19, 2019 at 6:15 AM Charles Rupp rupp.charles@gmail.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:The question is: will you make, compounded over time, more money in the TSP than you will pay later in taxes?Roth is post tax but, earning rates being the same, how much interest will you earn on today's taxes that you will avoid after retirement, when you tax liabilities are lower?
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Posted by: Mike VanAmburgh <mjv325@gmail.com>
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