Pill's Account Talk

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Thanks Bullitt, I felt I started my federal service and investing late in life (28). So I felt I needed to really get busy. 34 now. It’s never too early to start, and just because you don't make allot doesn't mean you can't contribute more. I'm a GS7! You have to learn to keep your debt low (pay it off) and manage your money. It sounds simple enough, but learning takes experience. And I'm still learning. My past would blow people away, so any one can do it!

For the past year I have been wondering if I should contribute less to max out my ROTH IRA. Currently I contrib 2k to the ROTH. I want to max it out however I have some debt I am trying to knock out.

Any one, please chime in. Should I/WE be maxing out our ROTH IRA first then TSP? I would love others thoughts on this. Hearing pro’s and con’s of others really helps motivates me to action.
 
Do you get the match on TSP? If I had it to do again I'd get the matching 5% and then max out the Roth and then come back to TSP with any more I could contribute.
 
Pill,

Invest in TSP at least to the match.

If you are in the 15% tax bracket then max out a Roth IRA. If you are in a higher bracket the decision is harder.

The nice thing about retiring with some assets in tax deferred accounts and some in a Roth is that you can choose which account to take retirement funds from. If we are in a low tax environment take assets from your TSP account, if in a high tax environment take from the Roth assets.

Now that I think of it, if your tax rate jumps for any reason move more contributions to TSP, if your tax rate shrinks move more to the Roth.

Kinda like a DCA.

And, you get to tell the politicians that you can adjust and overcome...

By the way, I am picking you in my Quinnella for taking this years TSP Cup. I think an asset allocator will take the prize:)
 
Good advice Boghie. I have to sit down and think this out. For me, and I think you guys would agree:

1. Contributing to TSP is simple.
2. IFT's for us asset allocators is also simple. Just put down the % in each fund and boom, you're diversified and allocated. Try re-balancing a portfolio outside of TSP filled with ETF's. What a nightmare.

I do tend to do more 'market timing' in the Roth IRA since I don't have to worry about taxes with it's infinite investment options. Finally, I just don't see the Roth IRA staying completely tax free in 2037 when I'm eligible to begin drawing from it.
 
Thanks Boghie!

Another angle I wasn't looking at, thanks for your input.

I just can't say enough about his site. Tom and board members Merry Christmas!

I think I am going to make the change this year. I plan to max out my ROTH IRA (Vanguard) and just ease back on my TSP a little. I eventually want to max both ROTH and TSP. Right now I can't afford both due to a recent move to please the Mrs. by moving by family.

I just saved 3k (usual minimum for Vanguard) for junior’s college, now what? I am not sure how to invest it. A few options but I’m just not sold yet. Open to suggestions…
 
So I just logged into TSP to see when my contribution went in, and I noticed that one went through on 5/12(Wednesday) however on this payday I get screwed as it went through 5/27(Thursday) after a big day of gains.

Has any one else noticed this? Is there an answer why?

Thanks.
 
I noticed that mine usually hit on Wednesday night and would be there on Thursday morning but recently it hasn't shown up till Friday morning. I thought I was losing my mind. I have no idea why.
 
Pill,

Did you change banks? I get my IFT contributions settled one day before documented pay day (Fridays). Thus, Thursday nights prices are used for purchase. Learned that the hard way via Quicken. Took a long time to figure it out.

But, two days in advance? That is odd.

My wife gets access to her salary earlier than I do. I think the money flows into cash holding accounts and the bank migrates it into your account from that. So, her credit union moves it into her account before my bank moves mine. Maybe the same for TSP?
 
It also depends on what day your payroll is processed.

Examples: If my admin staff processes early (like last week because of the holiday weekend next to the pay dates) we submitted payroll on Thursday before noon eastern. My money went in on Wed.

The payroll before that we did not submit payroll till Monday morning after the pay period was over and the money did not him my account till the following Monday.

Normally we submit payroll on Friday and money goes in on Thursday.
 
I only brought it up because after a huge day I wanted to see when I bought in and looking at the Most Recent Transactions it showed the first deposit of the month being on Wednesday 5/12 but on this instance it was Thursday 5/27 after the run up. Here was the share price difference.

12.7591 C 17.0298 S 15.6852 I Fund

13.1834 C 17.7446 S 16.4510 I Fund

.42 gain .72 .77 gain

It would have been nice to have gotten lucky and made the gains. So I would assume it all depends on how fast the computer processes the payments. Since I can only see the last two deposits it's hard to gauge how many times it has gone through on a Wednesday. I could have $300 plus on the day, only to lose some of the missed gains on the next day. Maybe next time it will work in my favor!
 
-Update on what day my contribution goes into my account.

Last week my tsp contibution went into my account on Wednesday again. But earlier in the month it was on Thursday.
 
I have noticed this occasionally. This month it was on the 1st (tuesday) and the 14th (monday which is usual).

I have not tried to find a pattern to see if it has something to do with the end of the month or is some vast conspiracy. :suspicious:
 
Does any one know what percent the last 5-10 years of salary increase has been?

When running numbers and retirement estimates I think using 3% as an estimate of annual increase is a bit inflated giving the last few years. However I can not find the history of increases.

Thanks in advance.
 
Pill,

Its been tough. Annual inflation is 3.1%. SWAVET's 4% seems good to go because I have heard that average wage inflation exceeds price inflation - that is one of the problem with Social Security.

Anyway, tools like Quicken just subtract inflation from return to get their inflation adjusted numbers. The goal should be to pop a certain number of points above inflation and kinda ignore the actual number.

If you are retiring soon (this year) I would use 1.5%. Anything greater I would use the real number.

By the way, I started frequenting this site because of your activity. We have/had a similar investing philosophy. It would be nice to hear more from you...

LateR

Pill said:
Does any one know what percent the last 5-10 years of salary increase has been?

When running numbers and retirement estimates I think using 3% as an estimate of annual increase is a bit inflated giving the last few years. However I can not find the history of increases.

Thanks in advance.
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