How to Grow Your TSP to $1 MILLION in 2023 | Thrift Savings Plan Investment Strategies

[@giovannymartinez-peralta752]

This is very true. I entered service in 05’ and all I was told is just put 5% and leave it alone. In 2015, and older coworker took time and explained to me, and show me how to really used it. I grew my TSP substantially ever since. Where ever you are Doggie, thanks.

[@Ulysses_21]

I’m about to ship out to BMT on Tuesday (the 18th) and I’m soaking up as much material as I can about the TSP. Thank you for putting these videos out there and inspiring me to plan my retirement at the age of 24!

[@FIREPsyChat]

Hey have fun at the BMT! What's your AFSC going to be? You should get some mail from the TSP once you get to your first assignment or at tech school. Kick ass

[@runbradrun8124]

This is great! Something not mentioned is the fact military service members can contribute up to 22500 annually to their Roth accounts! My wife and I contribute between the two of us 29000 not including the match! That’s more than double what a civilian couple can contribute!!

[@FIREPsyChat]

Nice!!!

[@rogerdoger9939]

This is not correct. A Civilian Federal employee may contribute $22500 annually (2023) and if both spouses are Feds, both can contribute $22500. The IRS limit for a civilian employees 401k is also $22500 This is a combination of the Traditional and Roth accounts. Not including employer matching.

[@invictus_1511]

Not true.

[@rogerdoger9939]

@@invictus_1511 what is not true?

[@invictus_1511]

@@rogerdoger9939 I'm a civilian working for the government. We have the same contribution limits.

[@Mark0p0Lo22]

I'm about to retire very soon and I needed this. Thank you for the info!

[@FIREPsyChat]

Congratulations on your near retirement!

[@RemoDelaCruz]

Great information. Still trying to understand why OPM includes FERS, TSP and Social Security as part of the civil service "retirement" program. Also, I often recommend folks to consider the time value of money since the value of $1M now will likely be less than that 25 years from now.

[@dcrump]

Glad I found this video 🥂

[@punisher6659]

Good info. Especially if you're younger.

[@sangphan09]

Thanks man. I'm one year in my civilian career. I greatly appreciate the content. Looking forward to see more.

[@a-aron7495]

Your High-3 calculation is based off of your “Basic Pay.” As a Federal Employee, basic pay includes: * Base salary, * Shift rates, and * Locality Pay

[@a-aron7495]

In extreme examples you could move to a location with a high locality rate at the end of your career to boost your high 3. A general example would be moving from Kentucky to California for 3 years to get the locality rate and then retire back to Kentucky and enjoy that high pension the rest of your life.

[@bigblue3568]

@@a-aron7495 moving to a high tax state, high gas price state, high price everything state to slightly make a little tad difference in HIGH 3 ??... you would spend way more living in California as you would in Kentucky. That little increase in pension would never make up for the thousands upon thousands spent living in California when you returned to Kentucky.

[@a-aron7495]

@@bigblue3568 you could run the math if you don’t think that’s the case. Some factors to consider are what age you retiring and how long you live past retirement collecting the higher pension. I will agree that costs would obviously be higher initially when you move to that higher COL area. While you may pay “thousands more” on gas, food, and COL, that’s why you are being paid more in locality.

[@bigblue3568]

@@a-aron7495 lets see... GS13 Step 10 in Kentucky is currently $128,043, in San Diego, CA its $145,090 which is $17,047 or 13% more in pay. According to Nerdwallets Cost of Living Calc to maintain the same standard of living you would need to be making $198,922 in San Diego which has a 55% higher cost of living than living in Kentucky but you're only getting 13% more in locality... falling short 42%. Moving to Cally will increase high 3 sure but that works out to and extra $170.47 per year of service. 170.47 x say 34yrs of service at retirement time is extra $5,795 a year in pension than if you had stayed in Kentucky.. IF you live for 30 yrs in retirement that's $173,879 additional.. BUT you had to spend $70,879 ($198,922 - $128,043) more to live there each year. 3 years would be $212,637.. so you spent additional $212,637 in living expenses to get that extra $173,879 in pension over 30 years... so still $38,758 in the hole .. Absolute no brainer for someone who is from California to get the heck out of dodge in retirement but for a federal employee to move there for 3 years to increase their High 3 in retirement is a little iffy.

[@zarifshoeb]

43:28 Very recently in 2024, the I fund was massively upgraded to include a lot more of the developed market and international stocks. So just because it performed poorly historically doesn’t mean it will stay that way after this huge upgrade to the I fund. So might want to look into that and consider putting some of your allocations there. So you and people who are watching might want to look into that reallocate your tsp 😊

[@calvinhaynes5781]

My goal is to have 1.5 million in my TSP account at 62. My fund will have to average 7% per year over the next 12 years to reach this goal. At that point I plan to move 500K into the G fund and leave the 1 million dollars invested in the C and S fund. I will take withdrawals from the G fund for 8 years before I move money from the stock side again (i.e., two buckets). At this time one can’t control where to pull money from within the TSP; do you believe this will change in the future? There is a work around to this issue but it’s not ideal. Thanks for all the good information. The advice you’re giving is priceless.

[@glasshalffull2930]

The fact that you cannot designate which fund to pull from in retirement is one of the worst parts of the TSP.

[@calvinhaynes5781]

There is a work around for this issue but it’s not ideal. I’m hoping that this rule will change in the next decade or so but I’m not getting my hopes up…

[@aladysoldier6604]

Thank you for sharing!!!

[@sammondaw]

2:20 Retire at 55 with 30 years. Only if you are in certain special categories , or under RIF. I retired at age 56 and 4 months ( my MRA, minimum retirement age) with 37 years. Not everyone With FERS can collect FERS pension at age 55 with 30 years. They don't call it MRA for nothing.

[@jlscott7831]

Thanks for this presentation, I had a question with the government in $33 trillion dollars of debt and counting, I wonder where they are going to get the money to cover the interest payments, social security, Medicare, and Medicaid? Do you believe maxing out the TSP is still smart, maybe just get the employer contributions, put the other overage in a brokerage account, max out the Roth, at least when you hold assets over 365 plus days your taxes will go down and you are not charge whatever your tax rate is. Why is your thought on this?

[@alrocky]

What is your rationale for investing in taxable brokerage account instead of TSP?

[@michelleh9794]

They offer training now people just have to sign up for them also there is great podcast called the federal employee financial planning podcast very informative with certified financial planners who specialize in working with federal employees.

[@esenciadelcaribe]

As an E-4, 23 year old, I’m currently investing in C(70%) and S(30%) funds with a 10% contribution. My question is: As every year goes by and rank up, should I increase my % contribution by 3 percent to retire as a millionaire in the next 17 years?

[@sammondaw]

Definitely increase contributions when you can. Market will have its ups and downs over that period of time. No guarantee you'll retire as a millionaire, but you won't if you don't stay the course.

[@glasshalffull2930]

If at all possible, max out your contributions NOW. The most money contributed EARLY is WAY more important as the name of the game is long term compounding.

[@huascarlopez3275]

Excellent advice

[@CSCINF]

Subscribed, Thanks

[@jessicaward377]

How do I schedule the free consultation? The website only takes me to paid sessions

[@FIREPsyChat]

Hi Jessica, this video came out a year ago. Unfortunately we don’t provide free sessions anymore. Please reach out to us by [e-mail] if you have any questions

[@leonelgonzalez3288]

I put all my TSP 50% C funds, 25% on the S fund and 25% on the I fund. Do you recommend to contribute on the TSP roth IRA if so what percentage

[@glasshalffull2930]

The I Fund has performed very poorly since its inception (about half the C Fund). 46% of sales by companies in the S&P500 come from overseas and so the C Fund is sort of an international fund. IMHO, I would drop the I Fund and put that money in the C Fund. As far as Roth, if you believe you will just barely making it at retirement, then I would just keep it in the standard as your tax bracket will ‘possibly’ go down as mine did.

[@alrocky]

What's your current federal tax bracket and with your career path do you expect or reach one or two higher tax brackets?

[@emilyakagi2769]

So great, thank you!

[@laurarayburn]

Thank you for this. Extremely helpful

[@FIREPsyChat]

Glad to help!

[@muffemod]

You have to think though, officer pension is quite different from enlisted pension. One most certainly can live off of officer pension exclusively.

[@FIREPsyChat]

I always encouraged my enlisted guys and gals to commission

[@mcfarofinha134]

@@FIREPsyChat Thats my plan, but thats always a pain in the ass as you know, especially if you have a job that limits free time available for getting a college degree

[@dcrump]

G stands for G-Unit 🤣🤣🤣

[@annmariestaats6488]

Retiring at 57.5 with MRA of 10 years, not planning on taking any distribution until well after age 59.5. I have most money in Traditional TSP but have as of 1 year been 100% in Roth TSP. No tax consequences if I tske any money out of the Roth TSP after 59.5 correct?

[@FIREPsyChat]

Generally speaking, that’s correct as long as you’ve had your TSP open for 5 years. But just to be sure, because we don’t know each other, please make sure to review your TSP account and statements

[@1Mannco]

@@FIREPsyChat Hi, I've had my Traditional TSP for about 19 yrs with $350k in it now at 60.5 yrs old and plan to retire, hopefully, at 65 yo another 4.5 yrs. I thought of possibly after retiring, rolling over the TSP to Fideilty [but leaving some in my G fund] into a Traditional IRA and then doing Roth conversions into my Roth I've had there for over 5 years. My question is "should I now start moving my contributions at work into a Roth TSP" so it will be easier for me to roll that right into my Roth at Fidelity..or just leave it now due to the timing of things now with 4.5 yrs to go, [will I need to have the Roth TSP open for 5 yrs] is it ever to late??..thanks!

[@halward01]

Hi I;m 67 years old retired , can I take myTSP traditional funds out and put into a TSP roth Ira ? I work part time now.

[@evanmillett6857]

Check with a professional but I believe if you make a balance transfer you'll have to pay taxes on them. With the money that's already in traditional being pretax, I think that's inescapable with no benefit to transfer. If you don't need to withdraw and are still able to put currently earned money in a roth IRA, there may be some benefit to future growth being tax free. You're essentially choosing the tax rates now to cash out, which likely are lower than when theyll be whenever you start pulling.

[@mildredwilliams5425]

Is it still possible to gain more when you're mid 50s and still has 15 yrs left in federal employment?

[@FIREPsyChat]

Yes absolutely if you can maximize your contributions every year. You can download my TSP calculator at www.firepsychat.com/resources.

[@harry4420]

Do you think the 2055L plan is good to put all your contributions in? Currently putting 10% with 5% match with the post office

[@FIREPsyChat]

Do you understand well enough on how the 2055L plan works? Because if you’re not comfortable, that’s when you should do more research on the fund. I can’t tell you what to do, and you should never listen to anybody else because what you need isn’t the same as others. I’m doing what makes sense to me based on my situation. I don’t know anything about you and your financial situation so it wouldn’t be fair if I just simply say yes or no

[@alrocky]

L2055 has aggressive allocation with 1% bonds [F&G]. Endeavor to increase your contribution from 10% to 22,500 as soon as possible.

[@harry4420]

@@FIREPsyChat no I don’t know anything. I just seen when signing up for TSP that if I retired around that year I should invest in that so I put 100% of my contributions towards 2055… is that bad? Can you explain please?

[@glasshalffull2930]

IMHO, the L Funds are too conservative for someone who is 30 years out from retirement. I would have all my money and future contributions going to the C Fund and S Fund. There will be ups and downs in the market and this is frightening, but over the long term it goes up and when the market is down your contributions buy more stocks. Now when you get 7 years or so out from retirement, then you can reevaluate your funds.

[@one900hustler]

Thanks

[@andriyeugenekhomyn9923]

Hi there I have a question I joined military in 2017 I did not changed for blended retirement b/c I did not know . Now on my LES retirement plan it says choice . what does that mean ? Should I still contribute to tsp I don’t get 5% match is it worth it . I thought to put 20 percent Roth and invest in stocks like c/s/f fonds. Any helpful tips for me thank you in advance

[@FIREPsyChat]

Hey there great question. I don’t know your entire financial situation so it would be unwise for me to tell you what you should do. Schedule a session with us by visiting www.firepsychat.com/coaching. Generally speaking, investing in the TSP with or without the match is still a good step to take, but your priority might shift just a bit. We can chat more about that if you’re interested.

[@andriyeugenekhomyn9923]

@@FIREPsyChat I am now 48 years I am Army active duty 03 over 4 years of service . God willing I got 16 years to go before I retire . I was thinking to put in tsp 20% of my monthly paycheck or it is too much ? Also to move money into c , s, and I fond. Is it a good strategy?

[@andriyeugenekhomyn9923]

Watching your video right now it is eye opener learning a lot

[@parabellumchambered1649]

17:26 - Incorrect. You do not pay taxes on interest and earnings… that’s the point of Roth.

[@FIREPsyChat]

No, that’s if you’re after 59 1/2. But this particular clip at 17:26 is talking about between the ages of 55 and 59 1/2 under The Rule of 55. If you quit between the ages of 55 and 59 1/2, the Roth TSP contributions won’t be taxed or penalized but the earnings and interest will be taxed but not penalized.

[@Niishkami]

Hello. I’m new here! If your TSP has 2.2mil by the age of 60 why are not withdraw all of your money when you retire? Why are we making 4% withdrawals a year?

[@FIREPsyChat]

Great question. Because I want the TSP to continue to grow while I’m retiring. Assuming that my TSP grows 7% on average per year, with a 4% withdrawal rate, the portfolio will grow the net average of 3% annually. Google search “the trinity study” on the 4% withdrawal rate but keep in mind that “safe” withdrawal rate depends on your retirement age, portfolio allocation, and the total balance. If I take all that money out, it’s no longer growing tax-deferred or tax free.

[@alrocky]

37% federal tax on $2.2M is *$774,332* leaving you with $1,425,668 before paying state taxes.

[@pablodelgado8690]

GGG-Unit fund 😂😂😂

[@Kep19901]

What is your opinion on a 70%S/30%C allocation?

[@FIREPsyChat]

That sounds very aggressive. What do you think?

[@Kep19901]

@@FIREPsyChat I think the same thing.

[@invictus_1511]

I'm 80% C, 20% S

[@1Mannco]

I'm 85% C, 15% G...and plan to retire in 4.5 years at 65, hopefully, but can change. I'll probably increase the G fund every year.

[@glasshalffull2930]

Are you 25 or 55? Either way, an aggressive person might go 70%C/30%S.

[@rootscapital3677]

G- unit 😂