Topgun514's Account Talk

[Cactus]

We are thinking of doing the same thing with CD's that are maturing and USAA want's to renew them for next to nothing.

To answer your question, your agency is only going to match your contributions up to 5%. That means they'll kick in $2000 if you are making $40,000. As for your contribution, you still have to pay for certain fixed expenses: Social Security, Medicare, FEHB, etc., but you can put the rest into your TSP until you max out the annual limit. That is $17,500 for 2013. You want to stretch your contributions out over the whole year because your agency stops paying matching in the pay period you stop contributing.

If you are over 50, like me, you can elect to also contribute a Catch Up contribution of up to $5500. This is handled differently from your regular contribution, and if you don't max out your regular contribution by the end of the year they return your entire annual Catch Up contribution to you. That's a pain. I wish they would just lump them together so we don't have to keep track of everything down to the dollar.

So the max addition of capital for your example would be: 17,500 + 2,000 + 5,500 = $25,000.

 

[ILoveTDs]

Their is no matching if you are military or CSRS. Only those under the FER retirement system get the 5% matching

 

[RealMoneyIssues]

Their is no matching if you are military or CSRS. Only those under the FER retirement system get the 5% matching

oh, ok, didn't know that... sorry (but then again, if he is new, he has to be FERS... right?)

 

[Stoplight]

Topgun,

Go to the TSP web site, and do a search on "deferral limit"...check out the PDF Fact Sheet ("Annual Limit on Elective Deferrals")...lot's of good info in there to answer your questions !

I've heard of people trying to front-load their TSP, but I always chose to adjust my pay period deductions to hit the max (with catch-up, later in my career !) over 26 pay periods...but then again, I'm a "belts-and-suspenders" kinda Guy

Good luck, and keep asking/learning !!!


Stoplight...

 

[Topgun514]

Thank you everyone.

For clarification...I am 24, so no catch up yet. Also, I am currently poor, but once I am done paying off college loans, this seems like an idea for me!

I just don't know what I want more, early retirement (playing my cards right and trying to travel the world by mid 50's would be awesome) or owning my own home.

For more clarification, I am not a trust fund baby, get money from anyone, or any of that, so even making very little $$ currently for the gov, I have never had so much money! I have no idea how to manage for the future as it has never been a family topic of conversation. I am extremely good at budgeting however because of my upbringing- hence why 50K in student loans should be gone by the next few years.

Thanks for everyone's responses!

 

[Stoplight]

Thank you everyone.

For clarification...I am 24, so no catch up yet. Also, I am currently poor, but once I am done paying off college loans, this seems like an idea for me!

I just don't know what I want more, early retirement (playing my cards right and trying to travel the world by mid 50's would be awesome) or owning my own home.

For more clarification, I am not a trust fund baby, get money from anyone, or any of that, so even making very little $$ currently for the gov, I have never had so much money! I have no idea how to manage for the future as it has never been a family topic of conversation. I am extremely good at budgeting however because of my upbringing- hence why 50K in student loans should be gone by the next few years.

Thanks for everyone's responses!

Well, IMHO, you're WAY AHEAD of most people your age !!! The youngsters I talk to today, have no clue...but YOU'RE thinking about something more than the day-after-tomorrow...KUDOS to you !!! We were ALL in your shoes, at 1 point ! I suspect you'll do well, and I wish you MUCH SUCCESS !

Are you military, or a new Fed civilian ?


Stoplight...

 

[Topgun514]

Well, IMHO, you're WAY AHEAD of most people your age !!! The youngsters I talk to today, have no clue...but YOU'RE thinking about something more than the day-after-tomorrow...KUDOS to you !!! We were ALL in your shoes, at 1 point ! I suspect you'll do well, and I wish you MUCH SUCCESS !

Are you military, or a new Fed civilian ?


Stoplight...

Thank you very much.

Fed Civilian: Was a SCEP intern and transitioned straight after graduating last year. Very excited about my opportunities ahead.


Also, keeping this tsp related, 50% L2040, 15% G, 10% F, C, S, 5% I. I am amazed at how money grows in these compared to the G fund.

 

[ILoveTDs]

You got big raises coming the next three years?

 

[Stoplight]

...and what GS series ?

Stoplight...

 

[Sensei]

Hi TopGun,

I think a popular sentiment around here is to sock away as much as possible early on. Just remember that most of the people who post here are in their 40s, 50s, or beyond, and the fed career is going to be their reality through retirement. At 24, though, how certain are you that you will stay in your fed job? I think that's important to consider. If there's a chance you might earn a degree, look for a better paying job, maybe go to the private sector, then do you really want to devote almost half of your salary to the TSP right now? $17,500 would pay my mortgage for a year. It would pay most people's rent for a year. It sounds like it would pay down your student loan debt very efficiently as well. I'd say to at least contribute 5% so you get a full 5% agency match, and then pay off your debt ASAP. When that's done, if you're still a federal employee, then continue making your debt payments to yourself in the form of increased TSP contributions.

Good luck!

 

[Stoplight]

Sensei,

GREAT points ! But you gotta admit...there are WORSE choices for a career path than being a Fed !

Stoplight...

 

[ILoveTDs]

I was trying to somewhat get to sensi's point, get the 5% matching and then pay off debt. If your new and on say a 7, 9, 11 targeted route, you will probably buy a house soon. I would suggest 15 year - pay the mortgage down as fast as posible.

 

[Topgun514]

Ahhh-- News to me today. Sell in May and go away?

Is this true, should I move everything to G and F until May 20 and buy in on the low?

To answer questions:

I plan on staying with the Feds currently, but I do see myself looking for other prospective jobs in the pacific NW- most likely would be going Fed to State or Fed to Fed though. The private sector is very exciting but I am not currently looking; pay can be much better and the next year worse and then you can be let go. I have a stable job, live in a great city for what I love (skiing, biking, camping, outdoors: Salt Lake City) and it is so cheap to live here, minus a few quirks on the "nightlife scene," it's home to me.

My GS is currently embarrassing. GS-5, 6 in 2 months, GS-7 in a year, 8, two years, then 9 with steps. But, my boss is grooming me for a GS 12-13 specialist job so that is why I am putting in my time. I also love my current job, the freedom it allows me (just got back from Japan, heading to Thailand in 5 months!, Vancouver for Xmas, then hopefully Europe next April). Few people can actually love there job, so I am lucky.

 

[jpcavin]

I was trying to somewhat get to sensi's point, get the 5% matching and then pay off debt. If your new and on say a 7, 9, 11 targeted route, you will probably buy a house soon. I would suggest 15 year - pay the mortgage down as fast as posible.

If you can buy a home or refinance at today's interest rates, it doesn't make sense to pay off mortgage. Better to pay off higher interest debt, establish emergency fund and then put the rest of your money in higher insterest bearing investments. Just my 2 cents.

 

[Topgun514]

Couldn't handle the heat, IFT to 70% F, 30% G. Keeping my contribution allocations the same so I will be buying low, but moved my current amounts to G and F.

On May 20, I will do another IFT to my old platform (50% L2040, 15% G, 10% F, C, S, 5% I). I will probably do the same in October too.

 

[Scout333]

If you can buy a home or refinance at today's interest rates, it doesn't make sense to pay off mortgage. Better to pay off higher interest debt, establish emergency fund and then put the rest of your money in higher insterest bearing investments. Just my 2 cents.

Just my 2 cents worth. Why buy a house in today's market? During the housing boom the house was considered an investment. Not so much these days. Early in your career may be more beneficial to be flexible to move for career advancement, etc. Why not rent and put your money towards paying student loans and other higher interest debt? Once that is done put your money in investments more likely to provide a better return.
The earlier in your career you can start providing for retirement the more your money will work for you. Wish I had someone to tell me that year's ago. As always put your money where it will provide the greatest return. JMHO All the best!

 

[bmneveu]

On May 20, I will do another IFT to my old platform (50% L2040, 15% G, 10% F, C, S, 5% I). I will probably do the same in October too.

I don't mean to pick on ya but going 100% L2040 will give you almost the same exposure. The L funds distribute across the G, F, C, S and I funds already. If you want the most exposure and diversification for your age, 100% L2050 will get you there. That one is geared for the most risk/reward for us youngin's :laugh:

 

[jpcavin]

Why buy a house in today's market?

Does the market really matter that much? Personally, I pay enough taxes and I like the tax write off. Money applied to rent doesn't count for anything (i.e. ownership, taxes, etc) I may as well be throwing away that money. Two, it builds equity over time. Although not a good idea to borrow against it, I like to have that option. Regardless of the value, it's nice to have the security of owning shelter. Now you have 4 cents...

 

[Mcqlives]

Does the market really matter that much? Personally, I pay enough taxes and I like the tax write off. Money applied to rent doesn't count for anything (i.e. ownership, taxes, etc) I may as well be throwing away that money. Two, it builds equity over time. Although not a good idea to borrow against it, I like to have that option. Regardless of the value, it's nice to have the security of owning shelter. Now you have 4 cents...

I agree and add 2 cents...buy a duplex pre-construct cost and have it built to spec. or buy an existing duplex and fix up. live in half and rent half. Tons of tax write offs on rental property maintenance. Talk to a good tax guy/gal (no...the place with the statue of liberty costume or other big chains typically are not the best tax places)

 

[Topgun514]

Well I left the good ones on a bad day, only to have the next day fully rebound. Lessons learned are always worse than knowing.