Started at 32 yrs old....will this work?

[marka1620]

Greetings all,I have about 11 years in the federal system (started @ 32 yrs and 44 now) and would likesome feedback. I am currently in the L2030 fund and my current TSP balance isabout $105,000. I contribute 25% of my base pay-GS-9, which equates to about$1230.00/month with the 5% match. It has only been the last year or two that Ihave raised my percentage up into the 20+region. The previous years I probablyaveraged about 12-15 percent/year I would guess.

I don’t see myself working past 60 and I'm being aggressive now, seeing how Istarted so late at 32 years old. I was thinking about switching over to theL2040 or L2050 fund to be more aggressive and hope for better returns. Obviously, Iam aware of the risks. But, I figure I stall have 16 years in the government so time is on my side.

Does this sound stupid and I hate to think I'm handicapped starting at the ripe old age of 32.

Thanks for any help or feedback

 

[Frixxxx]

Good Job Marka!

Awesome to see you aggressively investing for your future. You identified the need for investing at about the time most people do. My calculations (with no change in salary or contributions over 16 years) show you will be in the $800,000 range upon retirement.

I hope you get promoted and increase to the yearly max. Also remember that if you are maxed at 50, you can do another $5,000 in catchup contributions. Which could get you another $50,000 by 60.

Keep up the good work. Although, just staying in the L funds may not be the best way to stay to the positive earning side all the time.

If you have $800,000, a 5% withdrawal a year yields $40,000/yr for twenty years.

If you make 5% a year then your principal doesn't go down......

 

[nnuut]

No problem I started when I was 33. Welcome to the Forum marka1620.
Best of luck
Norman

 

[wavecoder]

I started at age 30, so 32 definitely isn't too late. I don't know anybody who started saving for retirement from 18, and rarely people in their 20's who started seriously putting money aside to retirement. most of em were saving money for alcohol binges on the weekend like me haha. most shape up in late 20's / 30's so I think you're not starting late by any means.

good luck man!

 

[Boghie]

2040 would probably be the highest risk you could take if you are not watching the market often (weekly or daily). 2050 could very well put you in the poor house if the market goes south in 2025 or so.

 

[Birchtree]

Go with 500 the largest companies (SPX) which is the C fund and you should hope it doesn't go up too fast - you want time to dollar cost on the way up acquiring as many shares as possible. Remember, it's not the price that makes you wealthy but the number of shares you own.

 

[uscfanhawaii]

Welcome Marka!!

I also started at 32.....when FERS and TSP started, I switched from CSRS. (Not many did.... :nuts: ) And, as I have said to other new TSP Talkers, I always stayed with 33C/34S/33I and dollar cost averaged over time. When prices went down, I bought at lower prices, so when it bounced back, I really shot up! Only lately have I started to manage by balance more closely, since my bi-weekly contributions are now dwarfed by changes in market prices.

I would encourage you to be aggressive now, since you still have a lot of time to recover from any downturns. L2050 is not out of the question....especially considering that you may still be in TSP for 20+ years AFTER retirement!! All equities like I did is not for everyone, but again, you have plenty of time to recover, so equities now followed by easing off some later, may be something to consider.

Good Luck! And congratulations for your diligence so far, and your foresight for the future!!

 

[Bullitt]

Stick with what you have and stay the course. Keep contributing, it's the only thing you can control. I guarantee you're doing better than 98% of the coin flippers out there.

Aggressive, risk, conservative.... these are all ploys by wall street brokers to make you think you're running a race or something. "Be aggressive out there, go get 'em". Yeah, right. Advertisers on CNBC make money in commissions whether the market goes up or down.

 

[dannyboy]

I don’t see myself working past 60 and I'm being aggressive now, seeing how Istarted so late at 32 years old. I was thinking about switching over to theL2040 or L2050 fund to be more aggressive and hope for better returns. Obviously, Iam aware of the risks. But, I figure I stall have 16 years in the government so time is on my side.

It's like the others have said, Put the max in that you can within reason? If at all possible, invest in other funds, C,S,I, and keep an eye on tha market or maybe invest in a TSPTALK strategy program?
I plan for the doomsday scenario: I may have to work past 70, I think we all will? Our debt to China gets so big, they foreclose, SSA will be cut in half at best, our taxes will triple, etc. Save now and roll-the-dice in the C,S,I is your best shot for the problems coming our way?