I have seen federal employees make many mistakes when it comes to their TSP unfortunately.
Because of this, I’ve been able to put together 10 things that every federal employee should avoid in relation to their TSP.
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Cooper Mitchell helps federal employees better understand their benefits and helps them retire on their terms. Using financial planning and investment management through Cooper is able to tackle the issues that are unique to federal employees.
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You are so right when you say: it might cost you a little bit now but can pay off in the long run".
1. Not invest at all
2. Not contribute more than the match
3. Not earning the 5% match
4. Investing entirely in the G fund
5. Not seek professional help for tsp
The first 25 years of employment I contributed max allowed and never looked at it. Didn't see any of the drops and was pleasantly surprised when I finally looked at it. Now I can hopefully retire at 30 years.
My TSP loan costed 50.00 and it helped with my down payment of a house. That is priceless when the per check payback is only 84.00 and it got us out of the renting situation and we have gained more in equity compared to what the TSP could have returned in a little over 2 years. And the 84.00 goes right back into the TSP. Trust me borrow against it to get out of renting!! And in between paying it back and gaining equity I’ve also raised it up 2% more.
I made 40% over the last 12 months in my TSP. Yes, we're in a bull market and lots of investments are doing great, but 40% inside what is basically a 401k is awesome. I'm split C and S fund, going for aggressive growth to retire in the next 15 years. G fund…not for me. Same with F and I. Performance is far too low to expect good returns, although in a downturn G and F are much safer. For the long-haul, I'm in for returns and ignoring downturns because during a downturn, I'm buying more at a lower price.
But what if you borrow from your TSP to use it to invest in something and make more? For example, borrow enough for a down payment to house you're going to use to rent or house hack. You can use the extra cash flow to pay back your borrowed amount quickly if done right.
Yes, You should leave your your money in TSP after retirement because of its low cost and high return. Even after retirement there should still be some money invested in stock market. I have made decent return on L2050, C and S funds, S funds do fluctuate a lot, so if one can not take share price dips, L funds are better option. By the way I am retired and fully invested in just mentioned funds. Thanks for good advice.
I just got hired and I am 24. I have no idea where to start from please make a video for federal employees don’t any about savings
Great advice Coop!
love that intro
How do you seek professional help with the TSP allocation of investments? Is there a number to call on the TSP website for this? Also, thank you for putting this video together!
Good simple advises. However, number 9 is not really correct. I day trade futures and trust me you can not day trade the TSP. At best you can Swing trade the TSP, which I do only after the market has drop by more than 20%. Day trading is when you get in and out within the same day, with TSP you can only move the money 2 times in a month with a 3rd time being only to the G-Fund, so yeah this is more Swing trading. My recommendation is not to try to Swing trade it, because you don't have the flexibility to enter and exit the market at specific levels. However, I did came up with a good strategy to beat the C-Fund and I will give it here for free. All you do is keep your money in the C-Fund and when there are big drops like -20% check to see if the S-Fund is lower than the C-Fund by at least -7%, when this happens move your money to the S-Fund. Then sit back and wait. You want to make sure the S-Fund rise by at least +7% passed the C-Fund from the date you did the transfer and when this happens put your money back to the C-Fund and just keep it there and just repeat.
If you are on fedral owcp can you invest in tsp
This was a very informative video. Outstanding advice. Thanks!
Why is there not a money market fund option within the TSP?
Ay Coop,what my allocation b in my TSP. It presently is allocated G55,C33,F10,S1,I1 % responsibly. I m retired. Thank u in advance.
2 years before I escaped the soulless work world is I moved everything in the the G fund. No regrets. What I calculated is stable. 2 years to retirement is not the time for risk.
Thanks Coop
#9 reason, timing the market. As Dave Ramsey says, you’ll never get hurt if you don’t jump off the roller coaster. That’s how people lose their money they get out of the market at the wrong time , after they already lost the money. Stay in the market until it comes back up again.
Thank you.
How does the matching factor in with hitting the input cap? Say with the new Military active duty matching, is the $19,000 cap only hit with my own funding then the matching can add more beyond the cap or will the 19k cap hit with my input plus matching input?
Max out TSP from day one, 100% in the C fund, leave it there until you retire…
TSP no no’s … with Nicolas Cage
Can they take TSP for child support backpay? Somehow my ex wife found a way to finagle some more money out of my life and I was always paying money to Child support but somehow i was in court and they took it from my TSP. I had to pay the taxes at the end of the year for that. I need to go back and see if I can make her pay for that or get money back from the government for that. anyway. they took half my TSP savings right out. still fuming about it.
Very few people know that most can still purchase a traditional or Roth IRA outside of TSP even if you have maxed out your annual contribution limits. You can then roll your outside IRA into your TSP, and increase your earning potential; along with the additional tax savings. By maxing out my TSP, catch up contributions, buying an outside IRA and writing off some business expenses, I fell into the 12% tax bracket in 2018.
Hello Cooper, I will be eligible for retirement in approx. 4 years . Who can I contact for financial advice?
Need a tailor… worse fitting jacket ever.
you make gym equipment videos and retirement videos?
I had to take a loan out to pay some CC bills. Didn’t want to, but repayments are less than the interest payment along with principle payment.
Very helpful Cooper. Thanks for the information.
IF ONLY People would spend as much time studying investment information as they do watching "TV" with no sense of purpsoe.
** Retiring would be a joke
** Becoming a millionaire would be a joke
** So many things people think are important would be ABSOLUTE JOKES
1. Why wouldn't you max out your TSP if you can? A Roth IRA is guaranteed to have higher fees than the TSP, max the TSP then open a 6k roth ira.
2. Why would you convert your TSP to an IRA while still working? Once again you're pretty much guaranteed to pay more in fees.
If you leave the Gov't, rollover your TSP into another qualified plan…say an annuity and return to the government at a later date, will you be penalized because you are once again a govt employee?
I have 6k in g fund now what ? ugh. How do I make sure I'm being matched 5% , I need instructions.
Interesting topic. On the TSP loan subject. As a young soldier I began investing into a Roth TSP very early. Now I'm into my 30s and chose to take a TSP loan out to fund a realestate investment opportunity. I chose to use the standard 20% down as this was an investment property. The loan satisfied much of that down payment. As such, I was able to control the full value of the home for an investment vehicle which, in the two years I have run it, has paid back well and beyond what those funds would have done in the TSP.
As general advice, I believe it to be sound. However, as with all investments, having a deeper understanding of the math behind investing is far more important than following general rules. But for the general audience, general rules are good to start with.
Thanks for sharing your knowledge.
he has it confused – ATSP loan and a TSP withdrawal is different. a loan you do not pay IRS penalties
Is this the same guy from Garage Gym Reviews!?!
Great advice but your video is so DARK! It looks miserable. Light up the background.
Hey cooper! Im currently going through AIT right now. I just started investing into the Roth TSP. If i retire in the army, i will be 45. Will i be able to get paid by my Roth Tsp as soon as i retire??
This guy goes garage gym reviews, love his channel lol
Great advice! Especially letting people know that it's important to put 5% into TSP with the new BRS. I know this was published before that came about but maybe you saw it before anyone else!
Your video stated you shouldn't day trade. This is not correct, since we can only move money twice in one month.
I need more advice cuz this tsp thing is complicate I got so much question like. How do I get my tsp started? Where do I go? How much money would I get back in 20 year in the military service after investing 10 percent for 20 year during active duty at a age of 38? I am joining the military at a age of 18 but I’m 17 I’m starting next year so..
FERS retiree here. Contribute the maximum amount to the TSP Roth only. It’s best to pay your taxes when you’re young and working hard, not when you’re retired and don’t want the man controlling your withdrawals by pressuring you with taxes and penalties. Also contribute to a Roth IRA, if you can. NEVER take out a TSP loan. If you can’t save enough for a down payment on a home, then wait until you can. Get a second job if you want a mortgage that bad. And don’t buy a house unless you’re damn sure you’re going to stay put and stay married, if applicable. And go for a 15-year fixed. You’d be surprised how much interest you pay on a 30-year mortgage. Aside from a TSP Roth and a Roth IRA, keep your “extra” money in a savings account. You’ll have the freedom of withdrawing whenever you want and how much you want without paying any income taxes or penalties.
Where can I get information on contacting a financial adviser??
Thank you for the video. Tough question… When doing both Roth and Traditional, if you choose 6% each (6%x2), youre really investing 12% of your salary, correct? Reason I asked is, I was told if you hit the 18500 too soon, the match stops early, and you dont maximize Federal match. Sounds incorrect, but apparently they only match the same amount over the entire year, it is not in relation to how quickly you contribute.
So is it possible to invest 5% in G Fund and 5% in another fund?
Sound advice people
#10! I was going to roll my tsp over to my fidelity roth IRA