I retired a year ago. My wife passed away 4 years ago. When I retired, I had no mortgage, no car payments etc. I was saving close to 70% of my pay (maxed out the TSP, and just paying day-to-day living expenses). So far, every thing is working out, haven't touched my TSP, pensions are covering day-to-day expense, and I am still growing my checking and savings accounts. I was able to take a vacation to Fiji, and can probably take another vacation to Belize this year. I might even be so bold as to take a trip to Bonaire. (Scuba is a cruel mistress). But, all of my worries about finances when I made the decision to retire may have been for not. I think I made the right decision.
I can easily live off my FERS pension and Social Security and not touch the TSP. Make sound final choices, don't get divorced and remarried 3 times and the TSP can just be your fund for the extras your denied yourself while working.
One thing that is important to remember is what your FERS pension is worth versus the private sector. For example in the private sector you would need 750k in a 401k to equal 30k in FERS pension. This on top of insurance premiums. 600k in the TSP is gravy money. Pension, social security, and savings with little debt will go a long way. Use the 4 percent rule in reverse
Very simple to understand , unlike many federal jobs I worked. I'm surprised that many federal workers don't know when they are eligible to retire and/or don't know how to calculate how much they will get at a certain age or right now if they wanted to retire.
I'm retired with a Military and civilian pension. Have a good VA rating and started my SS at 62. I live in Fl now in a new home that was paid for by the sale of my old home up north. I do not have the need to touch my TSP at this time and hope that I will not have to. It will go to the wife when my time is up, or I will use it on the new younger girlfriend when her time is up. She isn't happy. about that decision.
YOU ONLY LIVE ONCE. you worked very hard throughout your life. take some of that money out, get yourself something shiny or do a once in a life time trip paid for with some of your TSP. Please do something with it. You'll be happy you did.
Thank you for your video I appreciate you pointing out that there is a a Gross amount you get from pension and social security but it’s the net amount that you have to live off., which is always trickier to figure out. When looking at retirement, it needs to be looked at in different stages. Say retirement from age 65 to 72 you are doing ok healthwise. During that time frame you want to be cognizant of your income and maybe only use what you have to , ie 3% because maybe at age 73 you get sick and have more health care cost and need some assistance at home, so you need to take out more money. And let’s say at 78 you need to live in an independent or Assisted living facility, depending on where you live in the country, that can be $5,000 to $10,000 a month. And remember you have to live there in on the Net amount which is always harder to figure than a Gross amount, an add in other expenses you will need to pay, ie cell phone, clothing, do you have a car, etc I am finding this out and/or realizing this as I’m in early retirement and due to an accident and health problems séquela from the injuries. I’m needing a different things and need to figure what is the best living arrangement for the level of care I need but I’m still in my early retirement phase. So the 4% rule works for part of retirement but as your health needs affect your level of care needs, the cost for things effect your living expenses and therefore the amount you need to take from your retirement savings. And again remember that income amount starts as a Gross amount but you have figure out what the Net amount is and add it to all your other Net amounts of income to figure out your monthly income minus your monthly expenses.
I calculate what I need by removing all of the stuff I pay for in my paycheck for most part. The takehome and insurance cost is what matters most. Also taking into account for tax rate in retirement. Then take into account insane inflation but good luck with that.
Respectful recommendation: To more accurately determine if the after-tax amount suffices in retirement: Calculate your present monthly net pay (as You described). Deduct from it those expenses that will no longer have to be paid upon retirement such as 1. Present TSP contribution, 2. Mortgage payment (if Home will be paid for upon retirement) and 3. Monthly Social Security deductilon). Now, compare this remaining amount with the expected after-tax income. If After-tax income is greater, it will suffice.
But looking at my LES there are a few other things, that once I retire, which I won't have to pay for anymore. Medicare deduction, FERS retirement amount and the difference in the amount of FITW withheld from your paycheck, between working and retired status. It's a little hard to figure the last part out until you are actually retired. Great comment though.
I'm happy that I stumbled upon your page today. I've had 100% in C the last quarter and had big gains at close to 17%. But things tanked last week and I lost over $31K. Question: Should I move to something less risky with this crazy Trump/Harris battle or do I leave it and pray for big gains? If moving money is the answer, what do you recommend? I plan to retire at my MRA in March 2026 with 33 years federal service. Right now, I have under $800K in TSP. I certainly could use your help. TYIA
The answer will never be to move money after a loss in the stock market. That's the way to guarantee that it's a permanent loss. Look at it this way, you are now buying shares in the C Fund at a lower price so you will have that much more when the S&P goes back up.
Veterans don’t forget to file VA claims as it can be substantial and is tax free… every penny you are owned/earned apply for it! You earned it in sweat and blood and countless injuries.
Hi ! The 4% rule doesn't assume that you are going to "self-insure" yourself and spouse for long term heath care - is that correct ? Meaning that you need to have maybe $500,000 sitting in the TSP (hopefully converted to a Roth IRA) at some predicted age of 85 years old for both you and the spouse to use in the nursing home. So does the 4% rule become the 2% rule to ensure near end of life you have "some amount" remaining for the nursing home ?
Just stop going to the doctors at 75 and you won’t need to worry about nursing homes at 85. Or do like my parents and have enough kids that at least one will care for you or share the costs of taking care of you.
My husband's retired works part time 25000 a year, 76 years old has a small tsp (250000) don't need the rmd. Whats your advice roll over to ira or keep in tsp of that 250000 in tsp we have 40% in G , 55%in c, 10% in s and 8% in bond fund. We have 300000 in cash a rental property, his and my ss. Any Advice would be appreciated I'm 73 thanks
Great question. There's a ton of factors when giving advice about this. Feel free to schedule a meeting with us to talk about a specific plan and advice. Here is the link: app.hawsfederaladvisors.com/work-with-us
Good stuff, as always. I recently heard that when you start to take out from your TSP, that the withdrawal comes out from each fund. So if half G, half C, then your withdrawal will come out from both. Is that true? Obviously, most would want it to all come out of the cash.
Wife and me both Fed Employees, so 2 pensions. I'm also retired AF. We both have TSP accts (100% in C), plus we'll both take SS @ 62. Goal is 100% + income replacement, retiring @ 57 & 58, bout 4 more yrs to go.
No you don't. If you're close to retirement, then you should have zero debt and no mortgage after the last 30 years as a federal employee. If you've been stuck I GS 5 for 30 years maybe a bit more but every retiree should have a 2 to 3 percent less than $2k mortgage max.
@@tvmac1262 no one has zero debt. There’s taxes, insurance premiums, medicine, gas, car insurance, food, personal hygiene care, savings, HOA, internet, utilities, tithing, cellphone bills all the list goes on and on. Home repairs, car repairs, car maintenance.
I WILL be the first in my family tree to be a millionaire through TSP. I will be satisfied to leave this life if I can leave at least 6 digits among my kids.
Unlikely to 'make more' but possible to net more from no longer making TSP contributions, no longer paying FICA and Medicare taxes, lower Federal, state and local taxes ( will vary from person to person ), union dues, maybe you can take on less 'deluxe' health insurance once medicare becomes the primary payer etc etc
I hate these questions because everyone is different. That being said is there a way to get guarenteed 5% in retirement that is not an annuity and not using cds? I know there is high yield savings accounts but they use money market and not guarrenteed.
You could open a treasury direct account and achieve this with some of the shorter maturity securities but eventually these rates will decline and you'll be back to square one, but it will give you time to search for what is essentially a unicorn - a risk-free high-return security that is entirely structured in your favor.
@@stevebc957 I have been buying some dividend stocks, that have been doing well on the charts as well. Those are risky to me but satisfying when the market is uptrending. Wish it was easy.
I'd also hold off on the REITs until the fed strongly signals they are about to cut interest rates, in the current environment the share price of many REITs is grinding lower and lower. Yes, you'll still derive the income but it is demoralizing to see your capital wither away.
@@stevebc957 Well, the only people keeping the rate cut dream alive is the media. For example just last week on I think Thursday fed says no rate cuts, yet on Monday CNBC has as their first line on website. Stock market up due to hope for rate cut. It's unbelievable how they control the story. Spending insane amounts of money means inflation.
Cost of living adjustments are not tracking actual inflation. If rent prices 10X at the same rate, by the time i retire it will be $20,000 per month for average rent.
Hopefully, before things get too out of control, local governments will restrict the amount of private housing that corporations can buy. That will reduce housing costs. Currently corporations are buying 25% of private housing. This is why home prices and rents are skyrocketing.
we need Trump again to skyrocket our earnings and the economy - I had incredible earnings overall in my TSP for his first term - earning six figures a year with the orange man ! bring him back !!
That had nothing to do with Trump or any policy he had. Which she had no policies, but you were talking about our gains from the Obama economy that Trump inherited and tanked within four years stop giving Trump credit for what Obama did. Trump had the worst economy ever just because he said he had the best. Economy doesn’t make it right. He is the cause of the inflation. We are recovering from now.
You need to take a retirement seminar class money can always be made using the C fund it's only went to two times since it's inception and inflated ghost $$$ 🍊
@@user-oo8qm4nu4g nah I’m good and so is my tsp- just after 30 years contributing it’s clear the rates we earned under Trump vs this lousy administration- Bidenomics it’s working! For who illegals?
I retired a year ago. My wife passed away 4 years ago. When I retired, I had no mortgage, no car payments etc. I was saving close to 70% of my pay (maxed out the TSP, and just paying day-to-day living expenses). So far, every thing is working out, haven't touched my TSP, pensions are covering day-to-day expense, and I am still growing my checking and savings accounts. I was able to take a vacation to Fiji, and can probably take another vacation to Belize this year. I might even be so bold as to take a trip to Bonaire. (Scuba is a cruel mistress). But, all of my worries about finances when I made the decision to retire may have been for not. I think I made the right decision.
My sincere condolences for the lost of your wife. Mind if I ask your age when you retired.
I can easily live off my FERS pension and Social Security and not touch the TSP. Make sound final choices, don't get divorced and remarried 3 times and the TSP can just be your fund for the extras your denied yourself while working.
Same here
When I tell people they will most likely make more money when retired than when they were working, they can hardly believe it.
One thing that is important to remember is what your FERS pension is worth versus the private sector. For example in the private sector you would need 750k in a 401k to equal 30k in FERS pension. This on top of insurance premiums. 600k in the TSP is gravy money. Pension, social security, and savings with little debt will go a long way. Use the 4 percent rule in reverse
This really helped! I projected based on FERS calculation, TSP and SS “today”. Love the secret sauce! ❤
Very simple to understand , unlike many federal jobs I worked. I'm surprised that many federal workers don't know when they are eligible to retire and/or don't know how to calculate how much they will get at a certain age or right now if they wanted to retire.
@BlueSkiesDay I agree , there is no such thing as a dumb question !!
Another awesome video! This information makes me feel better about my future retirement.
Great to hear!
Don't forget to substract state taxes, if it applies to your state. It can be substancial.
Absolutely one of your best videos! Thank you! :o)
Glad you enjoyed it!
I'm retired with a Military and civilian pension. Have a good VA rating and started my SS at 62. I live in Fl now in a new home that was paid for by the sale of my old home up north. I do not have the need to touch my TSP at this time and hope that I will not have to. It will go to the wife when my time is up, or I will use it on the new younger girlfriend when her time is up. She isn't happy. about that decision.
🎉
YOU ONLY LIVE ONCE. you worked very hard throughout your life. take some of that money out, get yourself something shiny or do a once in a life time trip paid for with some of your TSP. Please do something with it. You'll be happy you did.
The ending is “the chef’s kiss” 😂😂😂
One thing to highly consider is the mandatory deductions (RMD's) that will add to your income and force you into a higher tax bracket.
Thank you for your video
I appreciate you pointing out that there is a a Gross amount you get from pension and social security but it’s the net amount that you have to live off., which is always trickier to figure out.
When looking at retirement, it needs to be looked at in different stages. Say retirement from age 65 to 72 you are doing ok healthwise. During that time frame you want to be cognizant of your income and maybe only use what you have to , ie 3% because maybe at age 73 you get sick and have more health care cost and need some assistance at home, so you need to take out more money. And let’s say at 78 you need to live in an independent or Assisted living facility, depending on where you live in the country, that can be $5,000 to $10,000 a month. And remember you have to live there in on the Net amount which is always harder to figure than a Gross amount, an add in other expenses you will need to pay, ie cell phone, clothing, do you have a car, etc
I am finding this out and/or realizing this as I’m in early retirement and due to an accident and health problems séquela from the injuries. I’m needing a different things and need to figure what is the best living arrangement for the level of care I need but I’m still in my early retirement phase. So the 4% rule works for part of retirement but as your health needs affect your level of care needs, the cost for things effect your living expenses and therefore the amount you need to take from your retirement savings. And again remember that income amount starts as a Gross amount but you have figure out what the Net amount is and add it to all your other Net amounts of income to figure out your monthly income minus your monthly expenses.
Don’t forget to add any allotments to your net pay, especially if they are covering loan payments, child support, etc.
And possibly an alimony payment or two?
I calculate what I need by removing all of the stuff I pay for in my paycheck for most part. The takehome and insurance cost is what matters most. Also taking into account for tax rate in retirement. Then take into account insane inflation but good luck with that.
Respectful recommendation:
To more accurately determine if the after-tax amount suffices in retirement:
Calculate your present monthly net pay (as You described). Deduct from it those expenses that will no longer have to be paid upon retirement such as 1. Present TSP contribution, 2. Mortgage payment (if Home will be paid for upon retirement) and 3. Monthly Social Security deductilon). Now, compare this remaining amount with the expected after-tax income. If After-tax income is greater, it will suffice.
But looking at my LES there are a few other things, that once I retire, which I won't have to pay for anymore. Medicare deduction, FERS retirement amount and the difference in the amount of FITW withheld from your paycheck, between working and retired status. It's a little hard to figure the last part out until you are actually retired. Great comment though.
From my tsp, FERS pension, ss, and VA disability comp, I’ll be good in retirement.
Thank you! Very helpful. Looks like I'm good.
Glad it helped!
Thanks for sharing!
Our pleasure!
I'm happy that I stumbled upon your page today. I've had 100% in C the last quarter and had big gains at close to 17%. But things tanked last week and I lost over $31K. Question: Should I move to something less risky with this crazy Trump/Harris battle or do I leave it and pray for big gains? If moving money is the answer, what do you recommend? I plan to retire at my MRA in March 2026 with 33 years federal service. Right now, I have under $800K in TSP. I certainly could use your help. TYIA
Stop touching things and leave it alone. That’s what you do
The answer will never be to move money after a loss in the stock market. That's the way to guarantee that it's a permanent loss.
Look at it this way, you are now buying shares in the C Fund at a lower price so you will have that much more when the S&P goes back up.
As always it’s all relative. There’s no single answer
i have created an Xcel spreadsheet which covers my exact situation. great stuff.
Veterans don’t forget to file VA claims as it can be substantial and is tax free… every penny you are owned/earned apply for it! You earned it in sweat and blood and countless injuries.
Working on my diagnosis
Amen! I have been a VA benefits volunteer for 12 years and a Vietnam Era Veteran. 🇻🇳
Beirut Vet here and have never used the VA for anything.
great analysis
Excellent analysis
This is an excellent video. Great analysis.
Thank you kindly!
Thank you for always giving us advice. I'm lucky to have 150k but I'll be fine from setting myself up via other avenues.
Can you please discuss the inhirited TSP by spouse what best to do with it. and non spouse inhirited TSP
Thank you!!! This was very helpful.
We're so glad!
Awesome as always
Thank you! Cheers!
thank my husband plans to retire from the post office at 57 in 3 1/2 years after 33 years working for the post office
i turn 30 tomorrow! and im at 72k! i think i will smash 1M
Hi ! The 4% rule doesn't assume that you are going to "self-insure" yourself and spouse for long term heath care - is that correct ? Meaning that you need to have maybe $500,000 sitting in the TSP (hopefully converted to a Roth IRA) at some predicted age of 85 years old for both you and the spouse to use in the nursing home. So does the 4% rule become the 2% rule to ensure near end of life you have "some amount" remaining for the nursing home ?
Just stop going to the doctors at 75 and you won’t need to worry about nursing homes at 85. Or do like my parents and have enough kids that at least one will care for you or share the costs of taking care of you.
That's good information
Glad you think so!
My husband's retired works part time 25000 a year, 76 years old has a small tsp (250000) don't need the rmd. Whats your advice roll over to ira or keep in tsp of that 250000 in tsp we have 40% in G , 55%in c, 10% in s and 8% in bond fund. We have 300000 in cash a rental property, his and my ss. Any Advice would be appreciated I'm 73 thanks
Great question. There's a ton of factors when giving advice about this. Feel free to schedule a meeting with us to talk about a specific plan and advice. Here is the link:
app.hawsfederaladvisors.com/work-with-us
And you if u have outside investments you can definitely double triple ur income in retirement
Most people don’t realize that
Good stuff, as always. I recently heard that when you start to take out from your TSP, that the withdrawal comes out from each fund. So if half G, half C, then your withdrawal will come out from both. Is that true? Obviously, most would want it to all come out of the cash.
That is correct
Yes, you don't get to choose which fund the withdrawals come from..
Wife and me both Fed Employees, so 2 pensions. I'm also retired AF. We both have TSP accts (100% in C), plus we'll both take SS @ 62. Goal is 100% + income replacement, retiring @ 57 & 58, bout 4 more yrs to go.
In this economy you need twice that to live. At least 9k net per month
No you don't. If you're close to retirement, then you should have zero debt and no mortgage after the last 30 years as a federal employee. If you've been stuck I GS 5 for 30 years maybe a bit more but every retiree should have a 2 to 3 percent less than $2k mortgage max.
@@tvmac1262 no one has zero debt. There’s taxes, insurance premiums, medicine, gas, car insurance, food, personal hygiene care, savings, HOA, internet, utilities, tithing, cellphone bills all the list goes on and on. Home repairs, car repairs, car maintenance.
Very few people with those numbers would be paying 20% in taxes!! They’d probably be in the 12% federal tax bracket.
Unfortunately, my numbers are very close and our tax bracket is still 22%.
I WILL be the first in my family tree to be a millionaire through TSP. I will be satisfied to leave this life if I can leave at least 6 digits among my kids.
Congratulations!
Great video! Are DOD employees eligible for the FERS supplement if they meet the service years and MRA requirements? Thanks
I believe so.
As long as you meet MRA and are under the age of 62.
We need a 4% calculator that simulates a lifetime.
Is it possible to receive more during retirement in comparison to net pay earnings while employed?
A former federal service co-worker said she makes more retired.
@morganjen1962 thank you for your response.
Unlikely to 'make more' but possible to net more from no longer making TSP contributions, no longer paying FICA and Medicare taxes, lower Federal, state and local taxes ( will vary from person to person ),
union dues, maybe you can take on less 'deluxe' health insurance once medicare becomes the primary payer etc etc
I hate these questions because everyone is different. That being said is there a way to get guarenteed 5% in retirement that is not an annuity and not using cds? I know there is high yield savings accounts but they use money market and not guarrenteed.
I don't think it's recommendable to think that way. I'd go for REITs. Also, I don't think there's a guaranteed 5% interest.
You could open a treasury direct account and achieve this with some of the shorter maturity securities but eventually these rates will decline and you'll be back to square one, but it will give you time to search for what is essentially a unicorn - a risk-free high-return security that is entirely structured in your favor.
@@stevebc957 I have been buying some dividend stocks, that have been doing well on the charts as well. Those are risky to me but satisfying when the market is uptrending. Wish it was easy.
I'd also hold off on the REITs until the fed strongly signals they are about to cut interest rates, in the current environment the share price of many REITs is grinding lower and lower. Yes, you'll still derive the income but it is demoralizing to see your capital wither away.
@@stevebc957 Well, the only people keeping the rate cut dream alive is the media. For example just last week on I think Thursday fed says no rate cuts, yet on Monday CNBC has as their first line on website. Stock market up due to hope for rate cut. It's unbelievable how they control the story. Spending insane amounts of money means inflation.
Cost of living adjustments are not tracking actual inflation. If rent prices 10X at the same rate, by the time i retire it will be $20,000 per month for average rent.
Hopefully, before things get too out of control, local governments will restrict the amount of private housing that corporations can buy. That will reduce housing costs. Currently corporations are buying 25% of private housing. This is why home prices and rents are skyrocketing.
we need Trump again to skyrocket our earnings and the economy - I had incredible earnings overall in my TSP for his first term - earning six figures a year with the orange man ! bring him back !!
That had nothing to do with Trump or any policy he had. Which she had no policies, but you were talking about our gains from the Obama economy that Trump inherited and tanked within four years stop giving Trump credit for what Obama did. Trump had the worst economy ever just because he said he had the best. Economy doesn’t make it right. He is the cause of the inflation. We are recovering from now.
You need to take a retirement seminar class money can always be made using the C fund it's only went to two times since it's inception and inflated ghost $$$ 🍊
Down
@@user-oo8qm4nu4g nah I’m good and so is my tsp- just after 30 years contributing it’s clear the rates we earned under Trump vs this lousy administration- Bidenomics it’s working! For who illegals?
Thorough & helpful info as usual. Thanks!😊📈🧾
Glad you enjoyed it!
@robertmurtle4148 His math is correct: 2000 (Pension) + 1000 (SS) + 1600 (TSP) = 4600 (total) 🙂