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Or you can now use TapaTalk again!TSP Millionaires
- Thread starter Frixxxx
- Start date
Frixxxx
Moderator
Buy it back, you might as well get some return for your service. I bought 8 years for $3100.....That will be my first month payment to me on my annuity.I found out from other website for this strategy (found by mstrzerg) very interesting with the average return of 42% for the last 8 yrs, then this may help me to become millionaire sooner. YTD gain more than 15% (this beat my estimate of 12% average).
[TABLE="width: 128"]
[TR]
[TD]2004 - 26%[/TD]
[/TR]
[TR]
[TD]2005 - 13%[/TD]
[/TR]
[TR]
[TD]2006 - 27%[/TD]
[/TR]
[TR]
[TD]2007 - 30%[/TD]
[/TR]
[TR]
[TD]2008 - 55%[/TD]
[/TR]
[TR]
[TD]2009 - 85%[/TD]
[/TR]
[TR]
[TD]2010 - 49%[/TD]
[/TR]
[TR]
[TD]2011 - 45%[/TD]
[/TR]
[TR]
[TD][/TD]
[/TR]
[TR]
[TD][/TD]
[/TR]
[TR]
[TD]January[/TD]
[/TR]
[TR]
[TD]3 - F Fund[/TD]
[/TR]
[TR]
[TD]23 - S Fund[/TD]
[/TR]
[TR]
[TD]February[/TD]
[/TR]
[TR]
[TD]12 - F Fund[/TD]
[/TR]
[TR]
[TD]March[/TD]
[/TR]
[TR]
[TD]7 - S Fund[/TD]
[/TR]
[TR]
[TD]April[/TD]
[/TR]
[TR]
[TD]26 - G Fund[/TD]
[/TR]
[TR]
[TD]May[/TD]
[/TR]
[TR]
[TD]9 - F Fund[/TD]
[/TR]
[TR]
[TD]24 - S Fund[/TD]
[/TR]
[TR]
[TD]June[/TD]
[/TR]
[TR]
[TD]1 - G Fund[/TD]
[/TR]
[TR]
[TD]10 - I Fund[/TD]
[/TR]
[TR]
[TD]July[/TD]
[/TR]
[TR]
[TD]3 - C Fund[/TD]
[/TR]
[TR]
[TD]25 - F Fund[/TD]
[/TR]
[TR]
[TD]August[/TD]
[/TR]
[TR]
[TD]19 - S Fund[/TD]
[/TR]
[TR]
[TD]September[/TD]
[/TR]
[TR]
[TD]18 - G Fund[/TD]
[/TR]
[TR]
[TD]October[/TD]
[/TR]
[TR]
[TD]26 - I Fund[/TD]
[/TR]
[TR]
[TD]November[/TD]
[/TR]
[TR]
[TD]8 - F Fund[/TD]
[/TR]
[TR]
[TD]20 - S Fund[/TD]
[/TR]
[TR]
[TD]December[/TD]
[/TR]
[TR]
[TD]3 - C Fund[/TD]
[/TR]
[TR]
[TD]23 - I Fund[/TD]
[/TR]
[/TABLE]
ContrarianJeff
Member
This was posted over 2 years ago. Any update on these numbers? (I couldn't find them.) I found this article from February of this year which said there were, at that time, 208 TSP millionaires.
News Articles: 208 TSP Millionaires Enjoy a Big Return in January
Kaufmanrider
Member
Buying back your military time will not effect your Fers Retirement eligibility date. It only effects your retirement dollar amoung. I bought mine (6 years) back early paying 25 bucks a month. The 6 years are credited to the tail end, i.e., will boost my retirement check by 6% when I retire.
The longer you wait to buy your military time, the more interest you pay.
Boghie
Well-known member
Nice to see the rolls of the Millionaire Club grow by 133 people in just one year...
As a note, all the bubbas yammering about aging folks no longer paying taxes and just drawing down Social Security might want to look at this new factor. The early adopters of 401(k)s are just now retiring - and they pay income tax on their withdraws.
Frixxxx
Moderator
Who's the $4 million fed? - FederalNewsRadio.com
From this year.....But their milllionaire number is also 208 in Feb 2012.
But a nice letter from a guy who started in TSP.
DreamboatAnnie
Well-known member
Hi SWAVET, Have you tried this strategy found by mstrzerg?
Boghie
Well-known member
Frixxxx,
The simplistic study doesn't quite answer the question either. For example, what about all the folks who start their careers in Federal Service, build up their initial nest egg in TSP, and then roll that over when they move to the private sector.
The beauty of the 401(k) [and, thus, TSP] is that you own it. You can move it when your career changes and when opportunities arise.
By the way, I think many will easily clear a million at retirement age. A 6% return (or 3% over inflation) results in me hitting that mark at retirement. And, I am not SES, will never be SES, and haven't rolled in a previous IRA or 401(k).
Frixxxx
Moderator
Hey thanks for getting me to look up the numbers:
So here ya go:
Last year, we ran an article about the 208 millionaires that are enrolled in the Thrift Savings Plan. That is good news but here is an update: There are now 562 millionaires in the Thrift Savings Plan.
LINK
562, I'm only a third of the way there, but I'm trying!
Hey Boghie, I'm like you, in it to win it......I think the number will grow over the years, but hey, the nest egg never needs to be all in TSP, does it!
Frixxxx
Moderator
Hopefully more than those just setting up to milk the SS train!
Boghie
Well-known member
Frixxxx,
We will be seeing 'compounding gains' in the count of millionaires in TSP. It only makes sense. With the balances you and I are talking about in our middle class accounts (and yowser, these guys got to the mil mark in 25 years) a one percent move is a very nice move. Kinda like a week at the old rock quarry, eh
. With compounding on that scale a mil is very approachable... Just gotta be in to win. A little Alpha helps a bit. Seeing a looming downturn helps a lot. Don't need it though. Just gotta be in to win...
Reading the link you posted makes me wish I was smarter as a youngster. I didn't really start investing in TSP till I was screwed by President Clinton's tax increase. I had those two bills of take home income spent and he left me with a $50 hole instead. Kinda pissed me off, but all for the better. Learned how to game 'Grabby Sam the Goober Molester'...
For those (FWM:cheesy
who think it can't be done, here is how it is done:
Age: 24
Salary: $24,000/year
Inflation: 3%
Invest in C Fund: 11% Return (see linked article, this, or any study of S&P 500 returns - Amoeba, are you listening)
Contribution: 10%, increasing with inflation ($2,400)
Match: 5%, increasing with inflation ($1,200)
Total Contribution: $3,600 at age 24, increasing with inflation
Results:
25 years in (Age 49 and the time it took the folks in the article to accumulate a mil): $581,547
Age 60: $2,004,428
Age 65: $3,095,597
At retirement, this chap will be able to pull about $80K (in today's mullah) a year till s/he croaks at 90 driving his or her boat into a bridge pylon or something. If our Winnebago Hero re-balances to safety at age 60 and earns 5% from then it will be a tad less. This DOES not factor in the FERS pension or the Social Security benefit.
Does saving 10% sound that hard. Maybe you want the Gubmint to keep investing your assets in its spending binge and earn the G Funds 5%. Then the numbers are as follows:
Age: 24
Salary: $24,000/year
Inflation: 3%
Invest in G Fund: 5% Return (see linked article, this, or any study of S&P 500 returns - Amoeba, are you listening)
Contribution: 10%, increasing with inflation ($2,400)
Match: 5%, increasing with inflation ($1,200)
Total Contribution: $3,600 at age 24, increasing with inflation
Results:
25 years in (Age 49 and the time it took the folks in the article to accumulate a mil): $251,834
Age 60: $557,312
Age 65: $725,776
Annual Income: $11K - Yuk and double yuk...
See what your Social Security tax (12.4% of Gross Income) (ahem, I mean investment) and your FERS pension (15% of Gross Income) are doing for you. Me thinks they is doing it TO us.
Boghie
Well-known member
No Burro,
When your asset base is high enough (say $100K) the compounding effect is amazing. 10% of $100K leaves you with $110K. 10% of 110K leaves you with $121K, and so on. Equities have their ups and downs, but with time they clear that 10% (and more). You can gain Alpha by missing on some of the big downturns or by market timing the corrections. I do better with the big ones. See recent - rather crappy - history. Market timing corrections is much harder - some would say dumb. So, right now I am in the Dumb Bunny Club:nuts:
Basically, you have to gut out the contributions early on when they don't seem to be doing anything for you. Then you hit a sweet spot and thank yourself for gutting it out. And, if you miss a 2008 you are on your merry way - you don't even have to make equity returns at that point. Easy street. So keep on keeping on...
uscfanhawaii
Active member
Except Roth!! For the young Feds out there, it is really worth looking at whether you want to get the tax deferral now (with Traditional TSP) or possibly have a Million Bucks tax FREE when you retire. Makes you think!!
uscfanhawaii
Active member
a million in the TSP come retirement would be nice.
YES!!! That's my goal....and should be all TSPers' goal!! :nuts:
Frixxxx
Moderator
Thanks for the analysis Boghie, always welcomed!
My current projections for my retirement:
Retirement age: 57 - 31 years service
FERS (31%) = 37,200 yr
Air Force = 24,000 yr
TSP annual WD (5%)= 50,000 yr
My expectations are to make over $1M in TSP
I do have other investments and returns will be nominal. My wife is already in line to receive full SS benefits.
I do not even count my SS as it will probably be taxed away. I also can have the ability to extend my years of service if necessary.
So, let my TSP become a million dollars as soon as possible!
Boghie
Well-known member
Ironic thing about having a million dolllars in your TSP account at retirement...is that if you take a "conventional" 4%/yr withdrawl every year....it comes out to $40,000/yr.
The same as someone a GS-12 step 10 working from age 23 thru 65 (42 years) getting over 40% of their hi theree (near 100K). That also comes out to...$40,000/yr.
But that FERS 40,000 gets inflation adjusted every year...so after 5 years it might be 45K-47K...while your 4% withdrawl from your TSP million would still be 40K. (lol)
Still, a million in the TSP come retirement would be nice.
FWM,
A GS04 Step 1 makes about $24K a year. I am using a GS4 salary, having that chap save 10% for his/her retirement, and having him/her augment TSP with the cost of living increases (inflation).
I am not using GS12 salaries in this computation. This chap ends his/her Federal Service at a GS04 Step 1.
The annual withdrawl is in today's dollars and is adjusted for inflation.
The BIGGEST problem with a 401(k) is that folks don't invest in it early enough. They (I, and probably the rest of us) miss out on at least one cycle of compounding that compounds on itself from day one. When I joined Federal Service none of the HRO folks knew what they were doing. They were sad about the change from CSRS to FERS and talked FERS down. My best guess is that most of us woke up in our mid-thirties. That same chap would have to contribute $7,200 (with match) to clear about $70K a year if he started contributing at age 35. See how that works. That is why most of us will not see the gaudy $3 Million or whatever...
The BIGGEST problem with a pension is that you are hoping politicians will not adjust it 20, 30, or even 40 years from now. Maybe even make an adjustment while you are retired and on a 'fixed' income. Nice of President Clinton to tax Social Security benefits for those with a better blend of Alpo.Last edited:Similar threads
