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My pet peeve is watching my younger co-workers got out to eat for lunch everyday, when they could brown bag their lunch and invest the extra money into their TSP. Going out to eat once in a while is OK, but everyday, sometimes more than one meal per day, seems too extreme to me. Wait until they retire and see how much less it will be than if they invested at least $25 per week.
Get the 5% Match
Save 3-6mos Household Expenses/Emergency Fund
PAY OFF ALL debt ASAP; carry less than 10%
INCREASE Retirement Investment
Save for Home/Car Maintenance
Save for College
INVEST more in Retirement
I max out my TSP contributions including 50+ age catch up contributions, 100% C Fund which has performed very well over 23 years. Had some extra cash so I put it in a Schwab taxable account S&P indexed fund, for which I used post tax dollars, have to pay capitals gains taxes on the dividends every year, and no matching of course. I believe the advantages of the taxable account (besides the TSP-like very low maintenance costs) is being able to withdraw without taxes since it was already taxed twice? The TSP is much better due to tax deferment, generous agency matching, and no tax on unrealized gains. Will have to pay taxes when I draw down my TSP, but by then I will be in a much lower tax bracket.
Agree with everything you said but I didn't pay off my bad consumer debt before maximizing this last January because my wife and I will be selling our home this month and I planned on using those profits to payoff all bad consumer debt and down-payment on new home. Curious on your thoughts with that strategy
This is a great perspective. Once you get beyond the match (taking free money should be a universal 'heII yeah!') it is definitely all about priorities. there is no one size fits all beyond that. In our case, we max out and still put a little bit away for college. but if we had to pick because money is tight, we would prioritize retirement because there are scholarships and loans for college and no such thing for retirement. and i'm of the belief that one of the best gifts you can give your kids is your own financial security because that's one less thing for them to worry about as you age.
Rule of 55 allows access penalty free only for the TSP funds not outside IRA’s. So retiring early is still an option with the TSP
Once upon a time, my mail stop at Lockheed Missiles & Space Co. Sunnyvale, CA was AFPRO/TMF. My federal coworkers and I would say it stood for "Too Much Fun" being a chapter in a Clancy novel. Enjoy LIfe!
Put your eggs in different baskets folks, I have 2 outside Roth IRA's in Fidelity & Vanguard and only contribute 10% to the TSP, in case I need cash right away and the rain starts pouring, have a an all cash acct. that can be used to check-mate Murphy's law.
Haws, you got this right!
If you had your kids after your late 30's or early 40's, you can use your Roth TSP as a vehicle for saving for college. At 59 and a half, you can withdraw tax free just as your kids are in college. The benefit is that most schools don't count retirement accounts as assets in determining aid but they do consider 523 plans as assets .
The match doesnt count against the max though correct?
Can you explain the new Social security change from age 62 to 67. If I'm retiring at 56.5 with 39 years will I get supplement till just 62 or will I get it till I'm able to claim social security ? If not, then I'm forced to work till I have 50 years of service. That's not good. Still wondering how they can change my retirement as I approach 1.5 years left. thank you michael
A tsp is an emergency fund, loan when you need it without applying. Max that baby and forget it!
I am not maxing out my TSP but am putting more in to help lower my tax burden. I have very few other options.
Get the matching amount. That's 100% the best advice. After that pay off any debt that accumulates faster than your investment can grow. If you don't have high debt though, buy buy buy while it's low.
Anybody know if when on your pension and the social security supplement, does also taking your TSP by a set amount monthly affect your pension or social security supplement dollar amount?
I have a taxable brokerage account I contribute 200 bucks a month too. Tsp is great, but I want access to some of my money.