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Old 05-29-2014, 05:05 PM   #21
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When you guys say 40/60 or whatever...are you saying 40% stock, 60% bonds...or vise versa?
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Old 05-29-2014, 05:40 PM   #22
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Traditional listing order for asset allocation is equity/bond/cash.

Others will be along shortly to quibble with the above.
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Old 05-29-2014, 09:33 PM   #23
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Traditional listing order for asset allocation is equity/bond/cash.

Others will be along shortly to quibble with the above.
Not to quibble with the above, but perhaps due to naiveté I have always had trouble figuring out the order too. That explains why I usually give my asset allocation as "45:55, equities:fixed". I do this to clarify in case I have it backwards.
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Old 05-30-2014, 06:59 AM   #24
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Thank you Wahoo and W2R. I could go something like 65/55/40 and have more money to invest, too! Ha!

The thing is with the newer retirement system, (FERS, of which I am), a person needs to be savvy on money, markets and how to handle their money. CSRS...you don't need to. With FERS, you need to watch what the markets are doing and managing your investments. Most do not invest enough of their income and do not put in the stock side of the funds for better long term growth. G will not give growth and many put most of their money in that most of their careers, because they are worried about losing it. I think a lot of the FERS workers will be waking up too late and realizing that they will not have enough to live on. I know most of a FERS person's retirement...maybe 2/3...will come from TSP. All those people will be working into their 60s and waiting on Social Security because they did not think ahead and educate themselves. And they even get 5% matching. There are no real programs out there to educate workers to get with the investing program when they come on board. You have to learn to do it yourself and knowledge is crucial.

Now with CSRS...all you have to do is show up at work, do your time, go for the promotions, and retire with your annuity. No worries about the markets, investing and an account. You get your retirement with COLA no matter what happens. Another recession...no problem. And if you are smart enough to be investing in the TSP, you will be way farther ahead and could retire on 80% of salary in 30 years instead of slaving away for, (what is it), 42 years to get to an 80% annuity.

Opps...Sorry for the rant...but that's the way it is out there...

You done good Marty. CSRS and TSP. I would go something like 50/50 or more stock side. Just my opinion. And do the shuffle when things look bleak.

And about life cycle funds...Interesting take by Scott Burns...Maybe another reason to do it yourself and manage your money more hands on...Opinions please!...
Target Mutual Funds: Oops, They Glide the Wrong Way, Scott Burns | uexpress
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Old 05-30-2014, 07:18 AM   #25
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I like Scott Burns and his couch potato investing system. I know a number of Fed's I work with that follow his advice.

His "Margaritaville" is the basic Boglehead three fund portfolio. Simple, yet effective.

AssetBuilder - You Can Be a Couch Potato Investor in the Federal Thrift Savings Plan - AssetBuilder Inc., Registered Investment Advisor
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Old 05-30-2014, 07:44 AM   #26
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The thing is with the newer retirement system, (FERS, of which I am), a person needs to be savvy on money, markets and how to handle their money. CSRS...you don't need to. With FERS, you need to watch what the markets are doing and managing your investments.
With FERS you do have to be disciplined and make the necessary contributions to TSP but I don't think you really need to be all that market savvy. Unless you're real close to retirement just set up automatic deposits into a L fund of choice and let it be. Trying to maneuver your funds around to account for changes in the market will be a losing cause for most investors.
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Old 05-31-2014, 04:25 PM   #27
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I'm retired FERS. At the earliest possible moment, I rolled my entire TSP account out to an IRA type account that could invest in real estate. A sample purchase: 2 bedroom, 1 bath, 1 car garage, red brick, about 3 mile from the college. Bought early 2013 for $77,500, rented for $805/month. After tax, insurance, etc. it’s dumping around $7000 (9%) a year tax-deferred into the account. Since we don’t need the money yet, I keep putting it back into improvements in the house. Compare this to an annuity from the TSP program.


https://www.tsp.gov/planningtools/re...lculator.shtml


If at my retirement I had chosen that option, and allocated $77,500 to it, and wanted an annuity for my lifetime, which would continue for the wife's lifetime, TSP would only have offered a FIXED annuity of $306 per month or $3,672/year (4.7%) . No inflation adjustment. If the wife and I both died (say in the same car accident) the kid would have gotten nothing.



With the rental inflation is again rising the dollar value of the the house, and I could probably raise the rent, and the kids has a prospective inheritance.



With the money in an IRA type account, if you want you can pick the same investments as within the TSP, but the options are LOTS wider.
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Old 06-01-2014, 05:00 PM   #28
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"Now with CSRS...all you have to do is show up at work, do your time, go for the promotions, and retire with your annuity. No worries about the markets, investing and an account. You get your retirement with COLA no matter what happens. Another recession...no problem. And if you are smart enough to be investing in the TSP, you will be way farther ahead and could retire on 80% of salary in 30 years instead of slaving away for, (what is it), 42 years to get to an 80% annuity."

Hi Redbugdave .....to get 80% of salary under CSRS takes 42 years too. At 30 years it's only 56.25 of your top 3. Yippee it's payday time!
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Old 06-05-2014, 01:09 PM   #29
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"If I was still in TSP I'd be 20% in each, G, F, C, S, I, for a 60/40 split, I am about 70/30 now in my roll over IRA due to owning a few individual dividend stocks.

20% each would have averaged 8.76% per year for the last 10 years. Only 100% S fund would have beaten you. But you'd have to suffer through some serious losses from time to time.

Here is the 10 Yr Compound for the G, F, C, S, and I from the TSP Website. 3.39% 4.65% 7.44% 10.43% 7.08%"

What am I missing? When I average the 10 Yr average compounded return of all funds I come up with a return of 6.6%, not 8.76%? Is it that the 8.76% is before inflation and the compounded returns are after inflation?
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Old 06-05-2014, 01:22 PM   #30
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Now with CSRS...all you have to do is show up at work, do your time, go for the promotions, and retire with your annuity. No worries about the markets, investing and an account. You get your retirement with COLA no matter what happens. uexpress[/URL]
CSRS was a pretty good deal, but there has not been any new CSRS employees for about 30 years. It's an old plan that is ancient history and slowly dying out just like private sector defined benefit plans.
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Old 06-06-2014, 01:15 PM   #31
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Fers/csrs

One underappreciated issue with FERS is in addition pensions ~ 1/2 of the old CSRS system, there is no COLA until age 62 and then a reduced COLA (up to 1% loss) each yr after. That will result in a substantial loss in pension over a 30-40 y period. If you do the math based on past inflation, in 30 yrs a FERS pension could easily be reduced 30-60%. Still better than no pension so not complaining, but retirement in the later stages will likely depend heavily on TSP.
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Old 06-06-2014, 02:52 PM   #32
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"Now with CSRS...all you have to do is show up at work, do your time, go for the promotions, and retire with your annuity. No worries about the markets, investing and an account. You get your retirement with COLA no matter what happens. Another recession...no problem. And if you are smart enough to be investing in the TSP, you will be way farther ahead and could retire on 80% of salary in 30 years instead of slaving away for, (what is it), 42 years to get to an 80% annuity."

Hi Redbugdave .....to get 80% of salary under CSRS takes 42 years too. At 30 years it's only 56.25 of your top 3. Yippee it's payday time!
Well, technically, it takes 41 yrs, 11 months to get to 80%, but who's counting?

I only made it to 72%, but that's enough, time to go!
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Old 06-06-2014, 04:39 PM   #33
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"If I was still in TSP I'd be 20% in each, G, F, C, S, I, for a 60/40 split, I am about 70/30 now in my roll over IRA due to owning a few individual dividend stocks.

20% each would have averaged 8.76% per year for the last 10 years. Only 100% S fund would have beaten you. But you'd have to suffer through some serious losses from time to time.

Here is the 10 Yr Compound for the G, F, C, S, and I from the TSP Website. 3.39% 4.65% 7.44% 10.43% 7.08%"

What am I missing? When I average the 10 Yr average compounded return of all funds I come up with a return of 6.6%, not 8.76%? Is it that the 8.76% is before inflation and the compounded returns are after inflation?
I agree with your, 20% each. I am in the same boat as your in retirement, 60/40 in the Paul Merriman Ultimate Buy and Hold and 24 dividend paying stocks puts me at 71% stocks, 29% bonds.

I calculate the last 10 years 20% each as 8.08%, from a website that tracks the actual 20% each return annually. Maybe dividend reinvested?
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Old 06-06-2014, 07:46 PM   #34
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One underappreciated issue with FERS is in addition pensions ~ 1/2 of the old CSRS system, there is no COLA until age 62 and then a reduced COLA (up to 1% loss) each yr after. That will result in a substantial loss in pension over a 30-40 y period. If you do the math based on past inflation, in 30 yrs a FERS pension could easily be reduced 30-60%. Still better than no pension so not complaining, but retirement in the later stages will likely depend heavily on TSP.

That's a good point Ragna. That's why we need to be proactive about our TSP and also have IRA's, too. Social Security will help and it has COLA, too. Most of my fellow employees did not contribute to any IRA's either. It's going to be bad for them unless they have inheritances waiting for them in the future.
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Old 06-08-2014, 09:04 PM   #35
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Well, technically, it takes 41 yrs, 11 months to get to 80%, but who's counting?

I only made it to 72%, but that's enough, time to go!
I'm with you...only made it to 72%. When I went to HR the specialist asked me, didn't I want to get 80%.... LOL, NO!
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Old 06-09-2014, 07:34 AM   #36
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I'm with you...only made it to 72%. When I went to HR the specialist asked me, didn't I want to get 80%.... LOL, NO!
Well yes, I'd love the 80%, I'm just not willing to work another 4 1/2 years to get it!
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Old 06-09-2014, 08:43 AM   #37
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I moved all of my TSP funds into the L-Income fund. I can already tell I'm not going to be satisfied with such a conservative position. Re-evaluating. My main concern is when I'm no longer able to make contributions.....starting in about 3 weeks. Currently I'm contributing $1000 every 2 week pay period, but only have 2 of those remaining.
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Old 06-09-2014, 03:58 PM   #38
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And remember Marty...when you get your lump sum payment for AL...go ahead and put it into IRA's for this year if you have not maxed them out already.

Also, the way I look at it...you will be needing your TSP for about 30 years and you might as well be letting it grow all the time. Just keep the money invested in the best funds depending on the market cycle if you don't roll the money over into Vanguard funds like Wellesely, etc.
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Old 06-09-2014, 07:38 PM   #39
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TSP allocation in Retirement

I confess I spent way to many hours studying TSP fund allocation early during my 25 year career. I read a lot of the Bogleheads's material and became convinced I did not want to waste my time and energy chasing short term gains and time the market. Rather, I wanted a simple plan that would transition between my working career and my retirement years.

I finally decided Age minus 10 was the appropriate bond allocation for me considering my FERS pension and social security. I set it at the beginning of each decade and rebalance once per year on my birthday.

Ages 20 to 29 = 10% G-Fund / 90% CSI Funds (example only: S & I Funds not available until 2005)
Ages 30 to 39 = 20% G-Fund / 80% CSI Funds
Ages 40 to 49 = 30% G-Fund / 70% CSI Funds
Ages 50 to 59 = 40% G-Fund / 60% CSI Funds (Current allocation at 2014 retirement age 51)
Ages 60 to 69 = 50% G-Fund / 50% CSI Funds
Ages 70 to 79 = 60% G-Fund / 40% CSI Funds
Ages 80+. = 70% G-Fund / 30% CSI Funds

I have done well enough for me and I sleep better at night.
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Old 06-09-2014, 09:16 PM   #40
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TSP allocation in Retirement

I confess I spent way to many hours studying TSP fund allocation early during my 25 year career. I read a lot of the Bogleheads's material and became convinced I did not want to waste my time and energy chasing short term gains and time the market. Rather, I wanted a simple plan that would transition between my working career and my retirement years.

I finally decided Age minus 10 was the appropriate bond allocation for me considering my FERS pension and social security. I set it at the beginning of each decade and rebalance once per year on my birthday.

Ages 20 to 29 = 10% G-Fund / 90% CSI Funds (example only: S & I Funds not available until 2005)
Ages 30 to 39 = 20% G-Fund / 80% CSI Funds
Ages 40 to 49 = 30% G-Fund / 70% CSI Funds
Ages 50 to 59 = 40% G-Fund / 60% CSI Funds (Current allocation at 2014 retirement age 51)
Ages 60 to 69 = 50% G-Fund / 50% CSI Funds
Ages 70 to 79 = 60% G-Fund / 40% CSI Funds
Ages 80+. = 70% G-Fund / 30% CSI Funds

I have done well enough for me and I sleep better at night.
Federal LEO, are you equally invested among the CSI, as in 20% each fund? Looks like you have no F fund (bond).
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