TSP Still Grow Once You Retire

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DustyOH
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TSP Still Grow Once You Retire

Post by DustyOH »

I was wondering if TSP still continues to grow with whatever you have invested it in once you retire? Right now all of my money is in C S and I accounts. Can I keep it all in these once I retire or does one not make anything once reaching retirement age. I know myself and the government stops contributing but does the money also stop gaining?

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mjedlin66
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Re: TSP Still Grow Once You Retire

Post by mjedlin66 »

Your money will continue to grow after you retire. Ibelieve you can also still make IFTs.
Owner/creator of TSPcalc.com - "Know your numbers"

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repinda808
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Re: TSP Still Grow Once You Retire

Post by repinda808 »

Welcome DustyOH,

While the contributions stop, your account is still affected by whichever fund your assets are allocated to. Your money will not "stop gaining".

Welcome to the site and best of luck!
2020 Seasonal Strategy 86299

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TSPsmart
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Re: TSP Still Grow Once You Retire

Post by TSPsmart »

You can keep investing and moving funds around. But remember, the stock market (C, S and I funds) have lost over 50% twice since 2000. Once you are close to retirement or in retirement you should not be fully invested in the equity funds.

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jimcasada
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Re: TSP Still Grow Once You Retire

Post by jimcasada »

I currently have two accounts: one is for my current civilian job and one is for my retired Navy. I can't tell any difference in the two regarding how they operate and function, except that I no longer have contributions going into my Navy account. I usually make the exact same changes to both accounts when changing funds around.

spooner4
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Joined: Sun Dec 25, 2011 9:17 pm

Re: TSP Still Grow Once You Retire

Post by spooner4 »

Yes, Been out 12 years, my TSP has nearly tripled in value..

mindofmush
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Re: TSP Still Grow Once You Retire

Post by mindofmush »

TSPsmart wrote:You can keep investing and moving funds around. But remember, the stock market (C, S and I funds) have lost over 50% twice since 2000. Once you are close to retirement or in retirement you should not be fully invested in the equity funds.


Why not? What is this assumption based on?

If you have been successfully managing your TSP account with a seasonal strategy making 10% to 13% a year, why would you quit? (Out of fear that the market might go down?)

Why should you stop making money managing your nest egg just because you stopped working at your regular job? Do retired people become stupid and ignore a source of their retirement income?

The TSP.gov website has some nifty calculators that show how many more years of monthly withdrawals you get if you continue your seasonal strategy instead of moving all or part of your money to the G fund. (The safe fund that makes no money after inflation.)
mo meng, mo ching (which loosely means: no money, no life)

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mjedlin66
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Re: TSP Still Grow Once You Retire

Post by mjedlin66 »

mindofmush wrote:
TSPsmart wrote:You can keep investing and moving funds around. But remember, the stock market (C, S and I funds) have lost over 50% twice since 2000. Once you are close to retirement or in retirement you should not be fully invested in the equity funds.


Why not? What is this assumption based on?

If you have been successfully managing your TSP account with a seasonal strategy making 10% to 13% a year, why would you quit? (Out of fear that the market might go down?)

Why should you stop making money managing your nest egg just because you stopped working at your regular job? Do retired people become stupid and ignore a source of their retirement income?

The TSP.gov website has some nifty calculators that show how many more years of monthly withdrawals you get if you continue your seasonal strategy instead of moving all or part of your money to the G fund. (The safe fund that makes no money after inflation.)


Because stocks are expected to return 8% (or 10 to 13 as you say) only in the long term. The assumption is that the market will always recover from crashes eventually and in the long term you will still average 8% per year. However, if someone is in retirement, they may not be around long enough for their stocks to recover from a crash. You can weather a crash with 20 years to go. You cannot as easily weather a crash if you are 75 and depend on your TSP for income.
Owner/creator of TSPcalc.com - "Know your numbers"

skiehawk11
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Re: TSP Still Grow Once You Retire

Post by skiehawk11 »

I agree strongly with asset allocations being different depending on the scenario. If a person depends on their 401k/TSP for a certain amount every year in addition to their pension and social security, the best way is to determine if your balance can support that number.

For instance, if a person needs 20,000 dollars a year from their TSP; conservatively estimate a 50 percent drawdown of the portfolio in a 100 percent small value stock allocation. The drawdown will be dependent on the historical or a monte carlo simulated drawdown.

In the scenario above, a 4 percent withdrawal rate means (20,000/.04) a minimum portfolio balance of 500,000 dollars at any given time. That means the actual portfolio amount required is 500k +(500k*.50) = 1 million dollar balance.

Edit: Adjusting for inflation and other parameters will change the actual numbers.

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cswift01
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Re: TSP Still Grow Once You Retire

Post by cswift01 »

skiehawk11 wrote:I agree strongly with asset allocations being different depending on the scenario. If a person depends on their 401k/TSP for a certain amount every year in addition to their pension and social security, the best way is to determine if your balance can support that number.

For instance, if a person needs 20,000 dollars a year from their TSP; conservatively estimate a 50 percent drawdown of the portfolio in a 100 percent small value stock allocation. The drawdown will be dependent on the historical or a monte carlo simulated drawdown.

In the scenario above, a 4 percent withdrawal rate means (20,000/.04) a minimum portfolio balance of 500,000 dollars at any given time. That means the actual portfolio amount required is 500k +(500k*.50) = 1 million dollar balance.

Edit: Adjusting for inflation and other parameters will change the actual numbers.


Looks like Jack Bogle suggests that keeping 75% in stocks and 25% in bonds is great for retirement. He's 50% each as he feels that's very conservative (of course he's 89 years old!). He also suggested that if you are young, to put 100% in stocks. I've got another 30 years before retirement, so I'm for that 100%.

Best,

Me

skiehawk11
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Re: TSP Still Grow Once You Retire

Post by skiehawk11 »

cswift01 wrote:
skiehawk11 wrote:I agree strongly with asset allocations being different depending on the scenario. If a person depends on their 401k/TSP for a certain amount every year in addition to their pension and social security, the best way is to determine if your balance can support that number.

For instance, if a person needs 20,000 dollars a year from their TSP; conservatively estimate a 50 percent drawdown of the portfolio in a 100 percent small value stock allocation. The drawdown will be dependent on the historical or a monte carlo simulated drawdown.

In the scenario above, a 4 percent withdrawal rate means (20,000/.04) a minimum portfolio balance of 500,000 dollars at any given time. That means the actual portfolio amount required is 500k +(500k*.50) = 1 million dollar balance.

Edit: Adjusting for inflation and other parameters will change the actual numbers.


Looks like Jack Bogle suggests that keeping 75% in stocks and 25% in bonds is great for retirement. He's 50% each as he feels that's very conservative (of course he's 89 years old!). He also suggested that if you are young, to put 100% in stocks. I've got another 30 years before retirement, so I'm for that 100%.

Best,

Me


I concur cswift. I am generally 100% S Fund (30+ years before retirement) in my TSP and utilize dollar cost averaging (spreading risk over time). I've lowered my allocation last month to 60 percent S Fund and 40 percent G Fund due to the S&P 500's P/E ratio being in the 90th percentile range (Overvalued). I'll re-adjust next month if needed. I still have my contributions going 100 percent S Fund.

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repinda808
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Re: TSP Still Grow Once You Retire

Post by repinda808 »

skiehawk11 wrote:I agree strongly with asset allocations being different depending on the scenario. If a person depends on their 401k/TSP for a certain amount every year in addition to their pension and social security, the best way is to determine if your balance can support that number.

For instance, if a person needs 20,000 dollars a year from their TSP; conservatively estimate a 50 percent drawdown of the portfolio in a 100 percent small value stock allocation. The drawdown will be dependent on the historical or a monte carlo simulated drawdown.

In the scenario above, a 4 percent withdrawal rate means (20,000/.04) a minimum portfolio balance of 500,000 dollars at any given time. That means the actual portfolio amount required is 500k +(500k*.50) = 1 million dollar balance.

Edit: Adjusting for inflation and other parameters will change the actual numbers.


Skiehawk,

I'm not sure if I'm reading it wrong, but 500k + (500k*.50) should = 750k. I'm not sure I quite undertand where the 1 million dollar balance came from.
2020 Seasonal Strategy 86299


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repinda808
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Re: TSP Still Grow Once You Retire

Post by repinda808 »

skiehawk11 wrote:repinda808,

You're right. It should be 500k/.50 actually. Thanks for the catch. :)


Cool skiehawk,

I wasn't sure whether I was missing something in the equation. I'm so newbie at stuff like that.
2020 Seasonal Strategy 86299

mindofmush
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Re: TSP Still Grow Once You Retire

Post by mindofmush »

skiehawk11 wrote:I agree strongly with asset allocations being different depending on the scenario. If a person depends on their 401k/TSP for a certain amount every year in addition to their pension and social security, the best way is to determine if your balance can support that number.

For instance, if a person needs 20,000 dollars a year from their TSP; conservatively estimate a 50 percent drawdown of the portfolio in a 100 percent small value stock allocation. The drawdown will be dependent on the historical or a monte carlo simulated drawdown.

In the scenario above, a 4 percent withdrawal rate means (20,000/.04) a minimum portfolio balance of 500,000 dollars at any given time. That means the actual portfolio amount required is 500k +(500k*.50) = 1 million dollar balance.

Edit: Adjusting for inflation and other parameters will change the actual numbers.


I believe that adding a 50% drawdown or any drawdown to the 4% withdrawal rule is simply a way to talk yourself out of retiring because you think you won't have enough money. William Bengen, inventor of the 4% rule,
included the historically worst "drawdowns" in his calculations to establish that a (40% bond/60% blue chip stock) portfolio would last at least 33 years. He also assumed that you would pay somebody to manage your portfolio so that your returns would be no more than the industry average of 8% (before inflation).

Geoffrey M. Zimmerman, CFP wrote an article on Investopedia about a retirement plan that deals with stock market corrections/recessions quite well. The plan divides your money into three parts: the investment portfolio, a liquid reserve/emergency fund of 12 to 36 months and a regular checking account to pay the monthly bills. You refill the reserve fund each year from your investment portfolio based on how well your portfolio did; if you hit your target return then replenish the reserve fund, if not then wait till next year to allow your investments to recover. Over the 20 years, stock market corrections haven't lasted longer than 2 years, 36 months of reserve/emergency fund should allow you to invest in 100% stock for higher returns. (Even a buy & hope investment strategy could recover and do well.) skiehawk11, you already maintain a two year emergency fund as well as your TSP (and other investments) so you're already set up similarly (except for the direction of cash flow); you can see how a smaller nestegg can survive market fluctuations without impacting needed income.

When I was 30ish, I assumed that I couldn't retire ever because there wouldn't be enough money. After fighting debt for decades and finally paying everything off including home mortgage and using fedsoftware's retirement program, I found that not only could I retire at MRA 56 but that I was financially well off to retire at 60. Now I can choose to stay or leave whenever I want; I've got my FI money (though most people call it FU money).
mo meng, mo ching (which loosely means: no money, no life)

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Fund Prices2024-03-27

FundPriceDayYTD
G $18.14 0.01% 1.00%
F $19.09 0.26% -0.68%
C $82.11 0.87% 10.42%
S $82.19 1.48% 6.61%
I $42.68 0.56% 6.21%
L2065 $16.38 0.84% 8.36%
L2060 $16.38 0.84% 8.36%
L2055 $16.39 0.84% 8.36%
L2050 $32.73 0.71% 6.94%
L2045 $14.91 0.67% 6.56%
L2040 $54.37 0.63% 6.20%
L2035 $14.34 0.58% 5.77%
L2030 $47.66 0.53% 5.35%
L2025 $13.14 0.31% 3.40%
Linc $25.60 0.24% 2.79%

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