Maxing out TSP
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Anonymous
| We are a two government employee (GS) household with a HHI of 150k. Other then making sure we spend less than we make, we have no real financial plan. Right now we are each putting in 5% of our salaries into our TSP to get the full match, but that probably is not enough in the long run. Given we are earning pension credits, should we also be maxing out our TSP or is that overkill or do we need to save even more? |
Anonymous
Honestly, if you're planning to work a full 30 year career at the government, then your pensions + SS + 5% (+match) into TSP will be plenty for a normal retirement starting your 60s. If you are looking to retire early or may leave the government before your full pension or are just looking for a quality of life increase in retirement, then sure start stuffing more money into your TSP. But, if money is tight and you're just trying to make sure you'll be fine when you hit your mid 60s, then you're doing fine with the 10% total (5+5) in the TSP. |
Anonymous
| Max out. You never know what the future holds with pensions. |
Anonymous
| We aren't making the assumption that pension and SS will still be around when we retire. |
Anonymous
+1 Max out, OP. I actually don't think SS will disappear, but the GOP will shrink it as much as they can, and especially higher earners will see lower payments. Put away as much as you can early so you get the benefits of compounding. You can always cut back later but you can never go back and get those early years back. |
Anonymous
| We max ours out. But are you still saving for a downpayment and for your unpaid leaves if you want kids? Those are sometimes more pressing savings concerns. |
Anonymous
OP here. If you are not counting on pension and SS, then it seems like you are suggesting on maxing out the TSPs and then saving a whole lot more. |
Anonymous
| I’d switch to Roth IRAs after hitting that five percent match. If you’re ever in a pinch you can withdraw contributions without penalty. My order of priority is TSP match, max Roth, max I Bonds, max 529 state deduction, then max TSP- but then I’m working on a two year emergency fund. Those priorities will change if I ever get that sorted. |
Anonymous
This is ridiculous. If the Federal Government reneges on its SS and pension obligations then bonds and stocks will probably also be worthless. |
Anonymous
| I would put half of each pay adjustment into the TSP so that you gradually increase the percentage contribution. |
Anonymous
| Max out your TSP. Step one is to max out the company match, step two is to max out the TSP limits. |
Anonymous
| I'd also start putting more in each year. I started like you and boosted it each time I started earning more money. |
Anonymous
It really isn't. Plan for the worst and hope for the best OP. You should max out and invest aggressively (in stocks) if you are young and plan to stay in the govt. I just crossed 1 mil point and kicking myself for not being aggressive and not starting full contribution sooner. Nobody told me when I was young. Don't make the same mistake. |
Anonymous
OP this is what to do. You might be able to rein in spending now and up the % you contribute already but if not, do it as soon as you get a step or COL increase. |
Anonymous
Sure you do. |