TSP Millionaires

[tsptalk]

Are you still looking for a woman, Mike? Sheesh! Maybe I'll hook you up with one of the fabulously rich women who took that class and paid attention.

 

[Mike]

Are you still looking for a woman, Mike. Sheesh!

Yeah, surprisingly, I am. I've been pursuing a good-looking ward clerk for awhile, but it hasn't led anywhere... yet.

Maybe I'll hook you up with one of the fabulously rich women who took that class and paid attention.

If a federal employee is "fabulously rich", an investigation by OIG will soon follow.

 

[Frixxxx]

Wait, is this turning into a dating service on top of a financial site?


HAHAHA:laugh:

 

[alevin]

The TSP has always said they didn't want the responsibility for teaching HOW to invest. I actually can see the logic in that. BUT it would have been nice of them to have enough forethought to teach us how to assess our longterm needs in early career, so that we could actually set quantitative goals soon enough to get there.

AND if they had highlighted the availability and utility of the calculators that would help us to measure and assess personal progress towards the goals. But no, all they ever said was "save", and "OBTW, anything outside of G carries risk of loss".

Once we knew those two things (long term needs and how to measure progress getting there), we'd have had much earlier recognition that we needed to figure out better how to hit what we're aiming for. those tools are now there, but its a little late for us mid-late career people and still had to discover the problem on our own pretty much.

which is why I have become an intermediate-term trader and paid the house off so I'd be able to save more faster, still not quite to stage of putting in catch-up contributions yet even tho a few years into age-capability. almost there tho.

 

[tsptalk]

You said something, alevin, that got me thinking. I was thinking that the gov't would have to pay for a class, which would not go over well (taxpayer money) but if the TSP paid for it, that would be different.

It could come out of the small fees we pay which would slightly increase our cost basis, but they make enough money off of us tobe able to pull that off.

The problem is, what would they teach? We have hundreds of people here with dozens of different strategies.

 

[SWAVET]

What do you all think that tsp will come up with something (training material) for comparison the different between tsp and next year ROTH tsp?

Is there anything that tsp will allow me to use my tsp $ to pay for tax to convert to Roth tsp since I can't come up with almost $50K to pay for tax.:laugh:

I want to become tsp millionaire:embarrest:, but don't want to pay tax at the end. All I want (dream) is to increase 1% (accumulation) every month with my current $ in tsp account.

 

[Frixxxx]

What do you all think that tsp will come up with something (training material) for comparison the different between tsp and next year ROTH tsp?

Is there anything that tsp will allow me to use my tsp $ to pay for tax to convert to Roth tsp since I can't come up with almost $50K to pay for tax.:laugh:

I want to become tsp millionaire:embarrest:, but don't want to pay tax at the end. All I want (dream) is to increase 1% (accumulation) every month with my current $ in tsp account.

It's all about balance, If you set a goal to have taxable income at $50K/yr, then you can balance it out with the types of investments you have. If you say you don't want any taxes when you retire, you need to move to a state that doesn't tax federal retirements.
You will also need to invest in Roth IRA.

Setting a goal will force your hand. I'd love to hear your goals and see if those line up to one of those "millionaire" rankings!

 

[Aviator_Guy]

I just hope the new employees understand how lucky they are to be able to put away up to 22.5K per year… When the TSP started out you could only put in only 10% of your base… Oh well, at least I feel good about being in the 10,000 crowd, but Dude, my Hats off to the participant with 3M… I would like to know if they were one of the marked frequent traders like myself who caused the TSP board to limit IFT's?? LoL… I'm still waiting to see all the money the TSP board has saved by limiting our IFT's...

 

[Mista_Magee]

I just hope the new employees understand how lucky they are to be able to put away up to 22.5K per year… When the TSP started out you could only put in only 10% of your base… Oh well, at least I feel good about being in the 10,000 crowd, but Dude, my Hats off to the participant with 3M… I would like to know if they were one of the marked frequent traders like myself who caused the TSP board to limit IFT's?? LoL… I'm still waiting to see all the money the TSP board has saved by limiting our IQUOTE]

...and to add insult to injury..remember when we had to call TSP before the 15th of the month in order to IFT on the first of the following month? Remember when the funds had no share prices? We've come a long way only to go backwards with the IFT limit. I only wish I had discovered tsptalk before the current IFT limit, probably could have made some smart moves to increase my earnings and may not have lost 55% in 08-09. Never re-couped it all because when I finally made IFT's it was to sell low and buy high (losing shares) or to IFT into the fund that was about to lose the most plus I made a one-time withdrawal in 09 after retirement. It was as bad as Suze Orman said it could be....all this happened during the year I retired and immediately afterwards. Who would have guessed, after all those years? Oh well, Money under the dam.

 

[ArchAngel]

I just hope the new employees understand how lucky they are to be able to put away up to 22.5K per year…

Oh, I understand. I also understand that it's impossible to put that much away when 22.5K is over half my annual salary. Maybe GS-12 will happen by the time I do retire!

 

[Frixxxx]

Oh, I understand. I also understand that it's impossible to put that much away when 22.5K is over half my annual salary. Maybe GS-12 will happen by the time I do retire!

Actually, about $60.00 a week with 8% performance a year will get you close. As you get promoted or pay increases, you can add to that. The trick is to discipline yourself to pay yourself first. Remember, the more you put in the less taxes you pay and you have more money anyway.

Play with numbers and set up a budget. If you want to have a million dollars when you retire, then it will take perseverance and patience.

 

[Boghie]

ArchAngel,

I would recommend the use of tools like www.dinkytown.net or Quicken and learn to play with the numbers. Over time you can get quite sophisticated with future financial projections.

Here are some numbers:
Assumptions: 30 years old
Inflation: 3.1%
Average Return: 8%
Current Balance: $0
Gross Salary: $42,000 (from your earlier comment)
Assume you will increase contributions with inflations and retire at 65 years old and you will croak at 85

Scenario 1:

• Your Contribution: 5% = $2,100 (Cost you about $1,780/year. About $68/pp)
• Employers Match: 5% = $2,100
• Annual pre-tax income: $26,223/year inflation adjusted to today's dollars
• Holdings at age 65: $1,017,794

Scenario 2:

• Your Contribution: 10% = $4,200 (Cost you about $3,560/year. About $136/pp)
• Employers Match: 5% = $2,100
• Annual pre-tax income: $39,335/year inflation adjusted to today's dollars
• Holdings at age 65: $1,526,691

Scenario 3:

• Your Contribution: 15% = $6,300 (Cost you about $5,350/year. About $206/pp)
• Employers Match: 5% = $2,100
• Annual pre-tax income: $52,446/year inflation adjusted to today's dollars
• Holdings at age 65: $2,035,589

And, if you invest in the equities markets with the normal 9% return your numbers are:

• Scenario 1: $34,505/year, $1,246,000 holdings
• Scenario 2: $57,751/year, $1,869,000 holdings
• Scenario 3: $69,010/year, $2,492,000 holdings

Thus, ArchAngel (and the rest), you will be in the seven figure club if you take care of yourself. Plus, do not expect Social Securiity or Pension benefits to be as currently advertised - and DO NOT VOTE for someone who will make a grab at (or tax) your 401(k) contributions or holdings.

Finally, there will be those who will state that one cannot attain 8% gains. The fact is that the 35 years from 1975 through 2010 the average annual return in the S&P500 (your 'C Fund') was 13.36% with a CAGR of 11.87%. In that time we faced an oil crunch or two, the Iran Hostage Crisis, Stagflation, Carter I, Beruit, Lebanon, Shuttle Crashes, Contragate, S&L Failures, tax increases, tax decreases, the DotCom crash, 9/11, the Credit Crash, and now the European Sovereign Debt Crash and Carter II. Not all of those years were great.

For fun, if you get 13% (don't count on it - count on 8%) here are the numbers:

• Scenario 1: $89,330/year, $2,934,000 holdings
• Scenario 2: $133,995/year, $4,400,000 holdings
• Scenario 3: $178,660/year, $5,867,000 holdings

Tasty.

Time is more important than contributions at a point.

 

[Pill]

Nice post Boghie!

Thanks.

 

[ArchAngel]

Wow, thanks for the info Boghie! Now I just need to adjust it for age 44. Going to be quite a difference I suspect, but that's what I get for not starting until then.

 

[bmneveu]

I started at age 23, as an E-3. I am now 24, E-4, and plan to continue contributing 10% minimum. I'm too lazy to do the math, lol...

 

[rikarus]

A lot of folks only what to talk when they hit it big and hard, making buku bank, but I’ll share, I am not afraid to show my folly and hopefully learn before I am too late.

I would advise everyone who is new to take their investing seriously, and max out contributions, it may be tough but worth the effort! I started with the FAA in 1989, and left things in buy and hold mode to present, not depositing the max, and not paying attention to the fund cost me dearly. Instead of the 10K club with 500k+, I am sitting on a paltry 210K after 23 years of contributing and being in the ‘I” band for the last 11. These sites and the highly intelligent and motivated people on them have a ton to offer, and you should educate yourself to the max and not rely on anyone or anything but yourself to look out for you in the end.

Fortunately for myself, I decided to take my destiny into my own hands and it's certainly not to late to prosper (I estimate I will work at least 16 more years and bought back my active duty time so at 60 I will be 42 years fers) and I am maxing contributions, and managing my investments versus relying on someone to do it for me. Worst case scenario is that I am broke but at least can point a finger at myself instead of looking the fool, but with as much education, research, and effort as I can muster I more than likely will do well. By now means some crazy fortune 500 guy, but I wont starve!

 

[Boghie]

Archangel,

It doesn't look real good. You've gotta max your contributions out.

Anyway,

•Scenario 1: 5% Contributions, 5% Match, Salary $42,000, 44 years old, Retire at 65, 3.1% inflation
•Scenario 1: 10% Contributions, 5% Match, Salary $42,000, 44 years old, Retire at 65, 3.1% inflation
•Scenario 1: 15% Contributions, 5% Match, Salary $42,000, 44 years old, Retire at 65, 3.1% inflation

8% Average Return - Blend of maybe 30%F with the rest in C/S/I

• Scenario 1: $10,616/year, $268K holdings
• Scenario 2: $15,924/year, $403K holdings
• Scenario 3: $21,232/year, $527K holdings

9% Average Return - Blend would be largely C/S/I

• Scenario 1: $12,726/year, $300K holdings
• Scenario 2: $19,089/year, $449K holdings
• Scenario 3: $25.452/year, $600K holdings

 

[burrocrat]

Oh, that sucks.

You mean 10 years of diligence gets you an extra million?

If I could turn back time...

 

[ArchAngel]

Oh, that sucks.

You mean 10 years of diligence gets you an extra million?

If I could turn back time...

You and me both.

 

[wavecoder]

hoping to join the club! I'm looking at 27-34 more years till retirement (depending on whether i decide to buy my military time or not), and shooting for 5 million as my goal. Currently have my TSP maxed out, but don't know if it'll stay that way, especially if I'm getting married or buying property sometime soon.