Reply to Max out TSP, but make too much for Roth IRAs. How else do we save for retirement?

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Reply to "Max out TSP, but make too much for Roth IRAs. How else do we save for retirement?"

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[quote=Anonymous][quote=Anonymous]I know this may be a stupid question and a bit of tangent, but here goes.

If you are a fed and you are maxing out your TSP, why do you need any additional retirement?  It seems to me that you are going to get 25%-30% of your highest income every year to begin with in pension.  Then you'll havea  maxed out TSP.  Will I really need more than that?  Shouldn't the pension count for soemthing in the retirement savings analysis?

TIA[/quote]

Do the math and you'll see this can leave a huge shortfall, that strategy will never work IMO for many people.  I've maxed out my TSP for 26 yrs. and done reasonably well with it (high six figure balance)... using traditional prudent withdrawal rates from the TSP + the FERS annuity + Social Security, I will get only about 2/3 of my current salary.

That is insufficient by most retirement standards, IMO you need at least 75-80% especially if you don't plan on moving to a low cost place to live.  That's why I've put an extra $10-20k/yr in a traditional IRA and taxable investments every year for 25 yrs.  With that we will have 80-85% of my salary and a more than adequate cushion, in fact I may even have 90-105% of my current salary in retirement thanks to this strategy.

Relying on just a FERS annuity + TSP + Social Security is very risky IMO.[/quote]

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