The key for long term investors is how to handle down turns in the stock market. When the 2009 real estate crisis hit, my wife went to her HR department and the clerk there said, "So you want out of your 401k?" (so many were stopping their contributions in a panic). My wife said, "No, I want to maximize my contributions!" By riding out down turns by buying growth funds at discount rates you buy low and maximize the rebounds. Many of her state coworkers dropped out and were too scared to ever get back in. My wife and I did very well with our set it and forget it strategy.
Don't worry about good morning, etc ---sometimes I watch this a week after you post them. Thanks for the topics that you present and your enthusiasm. Not a Fed Retiree - but a Soldier with a TSP and find your information helpful.
My wife has worked for the Commonwealth of Virginia and I am Federal. Her 401k matching is far less (1%?) than my 5% TSP agency matching. However, her pension multiplier is 1.7% rather than my 1.0% (both use top 3 year earnings average).
lets say your pension is 65K well divide that by 4% you equivalent investment balance is 1.6Mil, for life....so the fidelity table is flawed as it relates to federal retirees
DEBT needs to be the base- line question in all financial- planning questions. All other questions sorta subside into murky irrelevance until you don't Owe your "income" to past expenses. A billion dollars in your TSP is worthless if you have a billion dollars in debt. People: Pay off that house. Do NOT (EVER) borrow for an auto-- Or, at LEAST, NEVER LEASE a car.
Don't forget that the numbers in his table for average contribution rate don't seem to include the federal 5% match so the total contribution would add that 5%. The other thing is if you are not in your late 60s you should not be in bonds (G fund). They have been terrible for a long time and are losing ground to normal 2.5% inflation (let alone this winter's ridiculous 6.8% inflation). You need your money to grow in the C and S funds. I hear a lot of people who are improperly afraid of stock market risk because they don't understand what that means. As they close in on retirement tens of thousands of them are realizing they have very little for retirement because they were in the G fund for much of their career instead of C that has grown 11.25% on average each year since 1988. When you look at his table for people age 50-59, it says you should have 10x your current salary saved. Well, if you are in the C fund, the S&P500 will have grown your balance so much you probably will reach or exceed that 10x amount from compounding share growth in the C fund rather than from your paycheck contributions. Let the stock market get you there!
What I seriously need to hire You Folks to help me figure out: Delay SS VS Minimum SS?-- I'm DONE with USPS in 12 months at age 60-- Yes, Until age 62, I'll get the Supplemental, but Then? Do I delay SS & instead take the needed equivalent from TSP in order to "buy time" & max out SS? It's a math question I'm not qualified to answer.
Have I? Yes, according to the first chart I have more savings in my TSP than my age group, if you add my Roth IRA (I keep separate from TSP) and my FERS contributions I exceed the age group ahead of me (50's and on par with the 60's). So according to the second chart, what Fidelity thinks I should have, I am right there for my age group but they have a pretty big jump to the next age group. Funny part of the story is, I had to start over again at age 35. I got laid off from a private sector job in 2013, almost lost my house, and I used up my balance of TSP savings from my active duty military time. In retrospect that was a HUGE mistake, had that money stayed put in TSP and then I added what I'm contributing now as a FERS Civ employee I would have enough to retire right now and I'm not even 45 yet. The catch 22, I could quit working now but I'm not saying I would be withdrawing any TSP until 62, I could let it cook and be a (multi)millionaire. In my current situation, having started over in 2014, I'll still do ok because I make the max contributions to both TSP and Roth IRA every year for the last 4 years. I still stand to break $1M by 62 as long as I average 7% year over year.
Hey Dallen, just got an email for open enrollment for certain federal agencies this month (including mine, ICE) in something called SAMBA benevolent fund. I'll cut and paste the benefits below. I'm going to enroll, on top of my FEGLI benefits and WAEPA benefits, but was wondering whether you recommend enrolling. Seems like a great deal exclusively for certain feds. Also, could you do a video on FEGLI and when it does and doesn't make sense to enroll? Thanks. buddy. SAMBA benevolent fund: Annual premium: $39 ($17,500 coverage) or $78 ($35,000 coverage) annually No health questions asked Death benefit paid immediately Everest Funeral Planning & Concierge Benefit Voya Travel Assistance
The key for long term investors is how to handle down turns in the stock market. When the 2009 real estate crisis hit, my wife went to her HR department and the clerk there said, "So you want out of your 401k?" (so many were stopping their contributions in a panic). My wife said, "No, I want to maximize my contributions!" By riding out down turns by buying growth funds at discount rates you buy low and maximize the rebounds. Many of her state coworkers dropped out and were too scared to ever get back in. My wife and I did very well with our set it and forget it strategy.
Don't worry about good morning, etc ---sometimes I watch this a week after you post them. Thanks for the topics that you present and your enthusiasm. Not a Fed Retiree - but a Soldier with a TSP and find your information helpful.
Glad to hear it Rick!
"Just start"
I think this, by far, is the greatest advice.
We forgive you! 😅😅 Seriously, Good morning is fine. But you can also say, ‘Good Day’ like the Aussies!😃
My wife has worked for the Commonwealth of Virginia and I am Federal. Her 401k matching is far less (1%?) than my 5% TSP agency matching. However, her pension multiplier is 1.7% rather than my 1.0% (both use top 3 year earnings average).
Thanks for sharing!
lets say your pension is 65K well divide that by 4% you equivalent investment balance is 1.6Mil, for life....so the fidelity table is flawed as it relates to federal retirees
does fidelity assume no pension or social security, that makes a big difference...
The government is 28 trillion in debt you should plan for retirement without social security or a pension.
DEBT needs to be the base- line question in all financial- planning questions. All other questions sorta subside into murky irrelevance until you don't Owe your "income" to past expenses. A billion dollars in your TSP is worthless if you have a billion dollars in debt. People: Pay off that house. Do NOT (EVER) borrow for an auto-- Or, at LEAST, NEVER LEASE a car.
Great thoughts!
Don't forget that the numbers in his table for average contribution rate don't seem to include the federal 5% match so the total contribution would add that 5%. The other thing is if you are not in your late 60s you should not be in bonds (G fund). They have been terrible for a long time and are losing ground to normal 2.5% inflation (let alone this winter's ridiculous 6.8% inflation). You need your money to grow in the C and S funds. I hear a lot of people who are improperly afraid of stock market risk because they don't understand what that means. As they close in on retirement tens of thousands of them are realizing they have very little for retirement because they were in the G fund for much of their career instead of C that has grown 11.25% on average each year since 1988. When you look at his table for people age 50-59, it says you should have 10x your current salary saved. Well, if you are in the C fund, the S&P500 will have grown your balance so much you probably will reach or exceed that 10x amount from compounding share growth in the C fund rather than from your paycheck contributions. Let the stock market get you there!
Great points, Thanks for sharing!
What I seriously need to hire You Folks to help me figure out: Delay SS VS Minimum SS?-- I'm DONE with USPS in 12 months at age 60-- Yes, Until age 62, I'll get the Supplemental, but Then? Do I delay SS & instead take the needed equivalent from TSP in order to "buy time" & max out SS? It's a math question I'm not qualified to answer.
Those average balances are pretty low. A lot of people are going to be hurting in retirement if they can even retire.
Agreed, Many people are not as prepared as they'd hope to be.
Another great video. Many thanks!
My pleasure!
Good morning!
Morning! :)
Have you seen the NYT article about the change from 4% to 5% by the founders of the rule?
Yes, that is a good article.
Great video!
Glad you enjoyed it!
Morning in Hawaii
Good morning!
Intro music is too loud.
Thanks for letting me know!
Have I? Yes, according to the first chart I have more savings in my TSP than my age group, if you add my Roth IRA (I keep separate from TSP) and my FERS contributions I exceed the age group ahead of me (50's and on par with the 60's). So according to the second chart, what Fidelity thinks I should have, I am right there for my age group but they have a pretty big jump to the next age group. Funny part of the story is, I had to start over again at age 35. I got laid off from a private sector job in 2013, almost lost my house, and I used up my balance of TSP savings from my active duty military time. In retrospect that was a HUGE mistake, had that money stayed put in TSP and then I added what I'm contributing now as a FERS Civ employee I would have enough to retire right now and I'm not even 45 yet. The catch 22, I could quit working now but I'm not saying I would be withdrawing any TSP until 62, I could let it cook and be a (multi)millionaire. In my current situation, having started over in 2014, I'll still do ok because I make the max contributions to both TSP and Roth IRA every year for the last 4 years. I still stand to break $1M by 62 as long as I average 7% year over year.
Thanks for sharing!
Hey Dallen, just got an email for open enrollment for certain federal agencies this month (including mine, ICE) in something called SAMBA benevolent fund. I'll cut and paste the benefits below. I'm going to enroll, on top of my FEGLI benefits and WAEPA benefits, but was wondering whether you recommend enrolling. Seems like a great deal exclusively for certain feds. Also, could you do a video on FEGLI and when it does and doesn't make sense to enroll? Thanks. buddy.
SAMBA benevolent fund:
Annual premium: $39 ($17,500 coverage) or $78 ($35,000 coverage) annually
No health questions asked
Death benefit paid immediately
Everest Funeral Planning & Concierge Benefit
Voya Travel Assistance
Thanks for letting me know. I'll put this on my list of future videos!