Advice needed from early Federal retirees

Hi Brat! You are wise to take nothing for granted.
"In God we trust. All others pay cash." is a good motto.

John Galt

[grumpy]

Shanna,

I'm a retired fed (at 55) but under CSRS. One thing you should reconsider is the idea of taking an annuity on your TSP account. When I looked into this a few years ago, the annuity provided under TSP was not at all competitive with immediate annuities available on the outside (e.g. Vanguard).

I have left my TSP account in place with the bulk of the dollars invested in the G fund. This is the only fixed income investment in my portfolio. Where else can you earn 4+ percent with no principle risk and full tax deferral?

Grumpy

grumpy,

good point on the TSP annuity. We both have "good genes" as far as longevity is concerned, and wondered if the annuity might be a good deal for us. But if you can just leave the funds in the G account, that's an excellent deal. I suppose that would allow us to pass the balance along to heirs, too.

Thanks

[grumpy]

[quote if you can just leave the funds in the G account, that's an excellent deal. I suppose that would allow us to pass the balance along to heirs, too./quote]

Shanna,

Just to clarify, you do have to begin withdrawals at age 70 1/2.

Grumpy

[azanon]

shanna,

Not sure i saw you acknowledge Alec also pointing out the supplimental SS payment he'll get immediately upon retirement until SS kicks in at 62. My understanding was the suppliment payment is roughly what his real social security payment would be at 62.

Its a wonderful benefit and incentive to retire early as a federal employee. I'm a federal employee as well, and will reach official retirement age at 58.

[yakers]

I think this is an appropriate place to post this as Federal employees will already be looking at this thread and it could be useful to younger planners as well as old f%%ts like me.

What is your TSP asset allocation?
Your age and/or years until expected withdrawals?
Other asset allocation issues?

I expect to retire in 2 or 3 years and began withdrawals in about 6 years. I currently have these TSP allocations:
C fund (S&P500) 40%
I fund (intl index) 20%
S fund (small cap index) 20%
G fund (govt bonds, do not know how to describe it) 20%

I also have about 30% of my retirement funds (about equal to 60% of TSP funds) in an IRA Oppenheimer growth fund (OPTFX) .

I have a few other funds with small amounts, a Roth in Vanguard (VAAPX), some small DRIP stocks and cash in the credit union. But my big ones are the TSP and OPTFX and a mortgage free house and "the pension".

While I would like some safety and the G fund is safe, I assume that the (currently) inflation indexed pension allows more risk, right? That is why I do not have more bonds or other fixed assets. any comments?

[Brat]

You might take a look at FinancialEngines on the web. It's a subscription but they do a great job taking into account all of the factors you mention.

[grumpy]

Yakers,

I agree that the inflation indexed pension allows me to be more aggressive in my portfolio allocation. I am currently allocated as follows:

Equities 75%
Large Cap 43%
Mid Cap 10%
Small Cap 7%
Int'l Funds 13%
Specialty Funds 2%
Fixed Income 10%
Cash 14%

My TSP is allocated:
G Fund 70% (this is my only fixed income allocation)
S Fund 15%
I Fund 15%

The cash allocation is only as high as it is because I am purchasing a new house in 2 months. I do not currently hold any bonds or bond funds. Much of the cash came from a short term triple tax free municipal bond fund.

Background - I have been retired under CSRS for 2.5 years. I retired at age 55. I worked part time as a contractor to my old agency until 6 weeks ago. Now I am fully retired. I do not expect to withdraw anything from the TSP until required to at age 70 1/2.


Grumpy

[yakers]

Thanks Grumpy,

That looks like a fine asset allocation to me. Of course that may mean we go down the tubes together

Cash is OK, as is the G fund and stocks based on an inflation indexed pension.

My remaining personal concern is that I have one son left in high school with unknown college costs. Except for that I am "good to go".

Anyone else what to discuss TSP/retirement allocations?

Hi guys,

My husband's TSP is approx. 75% S fund (SP500) and 25% G fund. He just turned 50 and wants to retire at 56 or 7, depending on how the job is going at the moment. It would seem wise to diversify beyond the SP500- but I'm a much more conservative investor than he is. We won't need to touch the TSP for at least 10 years. He's open to suggestions.

We have our IRAs in Vanguard Bond Market Index (me) and a couple of stock funds (him)- can't recall which ones right now. Our diversification is our different tolerance for risk.

Thanks for keeping the thread going!
S

I meant to say 75% C fund, not S fund. Yakers, you are nicely diversified. It's good that they added the S and I funds to the TSP choices.

[elb]

I have the same TSP allocation as yakers. 40% C, 20% S, 20% I, 20% G. All the advice i've gotten says to use the G-fund as your main bond allocation.

I will dump some cash into vanguards TSM fund next month. I also have 2 old roth's that I am thinking of using for some reit exposure and some other tax-inefficient assets that I havent decided on yet

I have about 20 yrs till retirement and plan on accessing my TSP soon afterwards, maybe using the 72(t) or whatever new method exists at the time.

[daystar]

100% C Fund!

What's diversification and asset allocation?