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Hi everyone, looking for some advice. I had trouble finding a good job in my early 20s thanks to the the last financial crisis and only started to seriously save for retirement in the last few years. Now, I'm working a government job with relatively low pay for the field but nice benefits and job security in crises like this one. The facility I'm based out of will close in a few years, but I'm pretty confident I'll be able to find another job by then. I have a Roth IRA that I've been putting as much as I can afford into since 2012 or so - maxed out for the last four years - and a very healthy emergency fund, enough to continue living at my current standard for 3-4 years. I also have a Thrift Savings Plan that I've been putting a significant amount into for the last four years, as I'm trying to catch up for not having had any sort of 401k throughout most of my 20s. The weekend before the coronavirus started to take its toll on the economy, I moved about half of my money from the F, C, and S funds (Fixed Income Index, Common Stock Index, and Small Cap Stock Index) to the G fund (Government Securities). Because of that and another transfer to the G fund the following week, I've had minimal losses. 1) I got lucky, I know, and you shouldn't try to time the market. Knowing that, what's the best way to proceed right now? Move the money back from the G fund into the F, C, and S funds with the understanding that even if things continue to fall in the short term, in the long run it will likely be better that way? 2) Should I be investing more of my emergency fund? At this point even if we go into a recession I don't think I need to worry about losing my job, so even being very risk averse it seems reasonable to cut it by half or so. 3) After maxing out my Roth IRA and TSP, what's the best use of any additional funds? I read some of the literature from the OP but am not clear on the best next step.
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Mar 24, 2020 17:47
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| # ¿ May 22, 2024 06:24 |
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Sorry for the delay in responding, but I wanted to thank everyone who offered advice.pmchem posted:Good job on the move to G. Thanks, I tend to avoid the target funds as at this point in my life I prefer to put more in the C and S funds and less in the G, F, and I funds than any of them allocate. (I'd like to have more in international stocks, but from what I've seen about the I fund it looks like there are better ways to do that than through the index the TSP uses.) Hoodwinker posted:1) Yes, this is ideal. Your asset allocation and investment schedule should be fixed, or at least only changing with changes in risk tolerance and not due to market conditions. You can dollar-cost average or lump sum, but either way you should bring your money back into the market at the asset allocation you've determined based on your timeline. Okay, that's pretty much in line with what I was thinking. Thanks for the advice! Yeah, my e-fund is way larger than it needs to be. There are many reasons for that, but a major one is that I never feel like I have the time to sit down and really consider where my money is to the extent that is warranted. With everything that's going on right now, that just might change. WithoutTheFezOn posted:Atahualpa, there is a small detail to keep in mind whatever you decide to do. With the TSP, during any month you’re only allowed to make two interfund transfers. After that, the only transfer you can make is into the G fund. Thank you, I was not aware of that.
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Mar 26, 2020 15:45
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Some more questions about I bonds: 1. If you withdraw after one year but before five years, the penalty is losing the last three months of interest. How does this interact with the fact that interest is normally compounded semiannually; do you just divide the applicable interest rate by twelve to get the interest for any "leftover" months? For example, let's assume that your initial investment was in November 2020, so interest was added to your I bonds at the end of October 2021 and when the 7.12% rate was announced in November 2021 it kicked in immediately for you. You withdraw in March 2022, so you're losing the interest your I bonds would have earned from December 2021 through February 2022 but still getting the interest for November 2021. When you withdrew, would you get an instant 0.5933333333% (7.12% / 12) increase in the value of your I bonds over how they were valued at the end of October to account for November's interest? 2. Is there anywhere on TreasuryDirect where you can easily track how much of the value of your bonds you can withdraw without penalty and how much would be subject to the 3-month penalty? 3. I bonds have a fixed rate that's added to the interest rate throughout the life of the bond. The fixed rate was as high as 3% back in the late 90s/early 00s but has mostly hovered around 0% in recent years, although it did rise to 0.5% as recently as 2018/2019. What determines when this fixed rate is raised/lowered? Just whenever the Treasury Secretary or whoever decides that people need more/less of an incentive to purchase I bonds, or are there specific factors that go into it?
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Dec 29, 2021 23:58
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Crosby B. Alfred posted:That doesn't sound like too much work. I'm trying to think how I'd organize things... 60/40 or 80/20? Getting caught up on this thread, this reminded me of something I've been wondering about : is there any reason to keep money in your checking account rather than a HYSA if you're not immediately about to use it for a payment and don't use your debit card for purchases? I used to keep at least $500 in my checking account at all times for emergencies, but I switched a while back to keeping $25 in there and haven't had any issues. I've also been paying for things like rent/credit card bills out of my checking account all my life because that's how I was taught, but it seems like most of those things have the option to pay directly from the savings account these days - ATM withdrawals included. I'm wondering if it would make sense to forget about the checking account entirely (outside of maybe certain large purchases) and just pay bills/rent directly from my savings account. I use Ally if it makes any difference.
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Jul 4, 2022 17:53
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Motronic posted:So leave what you want in your checking account. It's fast and easy to transfer money to it. I use mine as a clearing account basically and keep whatever I feel is a sensible amount in there and transfer more as necessary. Thanks, I had the feeling the answer was something like this (and I forgot about the 6 transaction per month limit! Not that I would exceed it anyway) but wasn't sure if it was still true these days or more like one of those things that was sound financial advice 30 years ago but hasn't been updated for a modern context.
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Jul 4, 2022 18:14
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How is it determined what year a 401k contribution is applied to - your official payday, when you are actually paid, when the pay period ends, or something else altogether? Or is this one of those things where it depends on your company/payroll processor? Context: I'm a federal employee and have set up my TSP contributions to hit the $20,500 limit by the end of the year. However, I just checked my paystubs and my contribution for the last pay period of 2021 is being included with my YTD total for 2022, so I'll need to adjust my contributions for the remaining pay periods. The last pay period this year ends exactly December 31st, so the pay period ends in 2022 but we won't get paid until 2023. I'm trying to figure out which year my contribution for that pay period will count towards.
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Nov 23, 2022 15:38
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Huh, it looks like the most recent contribution was made on 11/15, which is none of the above (one day after I was paid, two before the official pay date). Thanks for the tip though, can extrapolate from there to see that the pay period 26 contribution will likely be counted towards 2023.
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Nov 23, 2022 18:25
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incogneato posted:I have no idea if this sort of thing is agency specific, but mine sent out an email that had this info in it: Thanks for the info! I'm pretty sure it would be the same across agencies. (And mine definitely didn't send out anything about it, I have to pay very close attention to my email in my current position and would have remembered something like that.)
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Nov 25, 2022 19:12
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I'm thinking about switching to a HDHP for the first time and had some questions about HSAs: 1) Do HSAs all follow the same basic rules or does it vary depending on the provider? Asking because at least initially I'd like to basically treat the HSA like another tax-advantaged space for investing and only dip into it if necessary, and I feel like I've seen someone ITT mention that their HSA makes it hard to invest the funds. 2) This may answer the previous question but I just found an OPM FAQ that says, "your HSA custodian or trustee may only offer some... types of investments" and "you may choose to keep the funds with the health plan's trustee or move to the financial institution of your choice". Is there any downside to doing this, and is there a generally preferred trustee that offers low fees and the flexibility to invest the funds as you like? (The insurance I'm looking at is through GEHA, which appears to use HSA Bank for the trustee.) 3) The HDHP in question contributes $900 to the HSA; does that count towards the $3850 limit for 2023? And if I switch trustees, could it have any impact on receiving those contributions?
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Nov 29, 2022 20:53
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Thanks to everyone who answered my questions about HSAs!KYOON GRIFFEY JR posted:Unless there's a really compelling reason to switch trustees, I'd probably leave it with your employer's designated trustee. Yep, those are the main things I'm worried about; I've been trying to research it but keep finding all sorts of conflicting information. For example, I've read in several places that HSA Bank no longer has a monthly fee, but then I found an investopedia article from just last month saying that it has a $2.25 monthly fee for balances below $3,000. And I've also seen some articles saying there's a $25 transaction fee for investing in Vanguard/Fidelity funds but others saying that's incorrect. laxbro posted:3. Yes. I would just open a separate brokerage. Fidelity HSA seems to be the gold standard these days but I'm sure there are other decent options. HSA bank is a pain to deal with. Out of curiosity, could you expand on what makes HSA Bank a pain to deal with?
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Dec 2, 2022 18:54
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If Congress fails to pass a debt ceiling increase later this year that would obviously be catastrophic in a lot of ways. But are there any types of assets that would be especially negatively impacted? A friend was asking me about something she had read saying that T-bills would be fine as long as everything is sorted out before they matured but you could be screwed if they mature while the US is still in default. Is that accurate? I'm also wondering about I bonds and the TSP's G fund; I'd assume they'd be okay in the long run (relatively) as long as the US doesn't remain in default, but is that a reasonable assumption? (I am aware that it's very unlikely to happen for various reasons including basically everyone involved having a financial stake to avoid it. But her question has me wondering and maybe also a bit leery of some T-bills I was planning to pick up this week.)
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Feb 21, 2023 17:22
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My HDHP contributes $75 to my HSA at HSABank each month, just want to confirm: 1) HSABank's site says there is no minimum balance required and no transfer fees, so there shouldn't be any problems (taxes, fees, penalties) if I just pull whatever's in it over to Fidelity each month, correct? I keep seeing recommendations to do it as a rollover but from what I understand that seems to be mainly to avoid transfer fees and minimize the amount of time the funds stays uninvested (and I'm not investing until they hit my Fidelity account anyway), and it seems more complicated + can only be done once every 12 months. 2) I learned a few months back that TSP contributions count for the year you were actually paid, so for example whatever I paid in pay period 26 of last year counts towards this year's limit since payday was in January. The HDHP contributions to my HSA each month occur a few days after the start of the next month, so should I expect something similar here? (I.e. If the $75 for December isn't paid until January, does it count towards the 2024 limit instead?)
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Mar 6, 2023 19:46
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Edit: Forgot to mention, thank you to everyone who answered my questions about HSAs.MockingQuantum posted:But that would require me interacting with TD's terrible site, lol. I hear this a lot but honestly? I bought T-bills on TD as a test run last year and again a few weeks ago and found it to be very simple. If you've already got an account for I bonds or whatever then it takes maybe 2 minutes and the interface is way easier for me as a layperson to understand than Vanguard's. BuyDirect -> select Bills -> select the duration and auction date on the page drk screenshotted, amount, and whether you want to schedule a reinvestment -> done. Atahualpa fucked around with this message at 04:33 on Mar 9, 2023 |
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Mar 9, 2023 04:27
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drk posted:Bought a 1 year brokered CD @ 5.35% today (issued by Schwab, purchased at Vanguard). Its FDIC insured and non-callable. There's also an 18 month at the same rate. I was looking into this yesterday afternoon on Fidelity, but am I missing something or do they just not offer CDs between the 9-month and 2-year range? I can see them on Vanguard, but I currently only use that for my Roth IRA and I'd rather use my existing taxable account with Fidelity if possible. For reference, here's what's showing for me on their site right now: 
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Mar 18, 2023 18:19
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TSP question: I recently switched my TSP contributions from traditional to Roth; is there any way on the TSP site to tell the total funds in your traditional TSP vs. Roth TSP? Looking at the account summary it appears to only break them down in terms of contributions (with a separate row for gains that I assume combines both) and I don't see that info elsewhere either. I checked my last quarterly statement and it appears to show the total Roth balance under the "Your Balances" header but it would be nice if there were some way to check the current breakdown as well. Related, is there any way to invest existing funds in the traditional portion differently from funds in the Roth portion, or does changing the allocation of one necessarily change the other? As far as I can tell it's the latter, but I can't think of any reason it would need to be...
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May 2, 2023 18:17
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drk posted:haven't looked at T-bills too much lately cuz I* have enough of them, but this isnt bad for this weekend's auction: I hadn't looked at CDs recently for similar reasons, but the top 3-month to 2-year CDs have been hovering around 5.30-5.40 for the last couple of days since I started checking them again. Pretty nice rates either way - especially if you can snag the call-protected ones at 5.40% I keep seeing some banks put up in small batches.  Mu Zeta posted:If you know the date you purchased it just use this Hm, interesting. So if I'm reading this correctly, if I sold this set of I bonds on September 1 then I would end up with $11,208? I've been using them plus some I bought the next month to supplement my emergency fund and originally planned to just hold them until at least the five-year mark unless I needed to dip into them, but looking at the numbers it seems like it would make a lot more sense to re-evaluate in September/October and possibly pick up some T-bills or CDs instead if rates on those remain close to where they are now. (This is all money in the "back end" of my emergency fund, so it's okay if I can't liquidate it for 6-12 months.)  Any downsides to doing this that I'm overlooking? Only one that comes to mind is that since you're limited in the amount of I-bonds you can easily purchase each year, it'd be better to already have money there than to try to get it back in at a later point if interest rates rose again and you wanted to take advantage.
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Jun 9, 2023 23:38
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I received an email about Multi-Year Guaranteed Annuities from a company that sometimes sends out retirement/investment stuff to members of my union. From a bit of research it sounds like these are very similar to CDs: a fixed-rate asset with specific duration where you know the exact rate at time of purchase, but with slightly different tax implications, issued by insurance companies rather than banks, and not FDIC-insured. Are there any other downsides I'm overlooking? The rates I'm seeing medium-to-long-term MYGAs are on par to moderately better than what I've been seeing for callable CDs and way better than anything I've seen for call-protected ones. Also, the email says "Principal Protection: Sleep easy knowing your initial investment is secure" but I haven't been able to find anything about how the funds are protected aside from the fact that they're not FDIC-insured. Is it just by the issuing company, and you'd still be screwed if they go belly-up?
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Jul 1, 2023 00:28
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Democratic Pirate posted:Any recs on the best set it and forget it HYSA? I’m getting in the weeds and probably just need to choose one with a bank I’ve heard of. Thirding Ally - been banking with them for years and only had good experiences. MJP posted:Elements FCU does 4.25% APY if you're $10,000 or over. Ally is also up to 4.25% as of yesterday BTW.
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Aug 2, 2023 18:17
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spwrozek posted:Sold off my 2021 I Bonds. Not a bad return over the 21 months. Probably will buy a 13 month treasury with the money. LOL, I was planning to do the same after getting home from work today and 
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Sep 1, 2023 23:41
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I asked here or in the Federal Government Jobs thread a while back about whether TSP contributions count towards the year the pay period is associated with or when you actually get paid (e.g., the official paydays for pay periods 26 and 27 this year will fall in 2024), and the answer was when you get paid. Is it safe to assume that the same applies to HSA contributions? Also, and I realize this might be way too obscure a situation to expect anyone to know the answer: if the government ends up shutting down and we don't receive back pay until 2024, does that mean any contributions that would have come out of someone's paycheck during that time will count towards 2024 instead of 2023? It looks like the 2018-2019 shutdown fell in such a way that we wouldn't have been paid until 2019 anyway, so I don't think I can figure it out using my pay stubs. But there might be some precedent from the 1995-1996 shutdown, or however that's handled for back pay in general.
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Oct 17, 2023 01:53
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My agency's website has an article about Roth vs. Traditional TSP contributions that says the following:The article posted:When you withdraw your Roth contributions and associated earnings in retirement, you will pay no Federal income taxes on them, as long as you are at least age 59 1/2 and have been making Roth contributions for a minimum of 5 years. This could be read a few different ways, so just to confirm: the actual rule is that it has to be at least 5 years since you first made a Roth contribution, correct? Not that you need to make Roth contributions for at least 5 years, or that you need to have been doing so for the 5 years prior to retiring.
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Jan 3, 2024 17:09
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Just to clarify, the TSP is not an IRA; it falls under pretty much the same rules/limits as a 401k. But thanks all! That lines up with what I found with a quick search (I'm at work now so can't look closer until later). It looks like the Roth TSP rules work similarly to what it said in the article CubicalSucrose quoted, where it just has to be at least 5 years from January 1 of the first year you made Roth contributions.
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Jan 3, 2024 17:46
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Mykroft posted:I haven’t cashed mine out yet, I’m holding off until we have a better idea what the new fixed rate is in April. Not as far as I've been able to find. I have to use the purchase date from TD and look it up elsewhere.
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Feb 4, 2024 18:08
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spwrozek posted:I just took a quick look at mine with vanguard and the only place I am easily able to find it is on my quarterly statement. I can't seem to find it anywhere else. It is all laid out on the statement though. maybe check there? Hm, I just checked the statement on my own 401k (TSP), and it has a table listing contributions and earnings. It lists one number there for my Roth contributions and earnings, but another number in a box beside the table labeled "Your Nontaxable Roth Balance". Shouldn't these numbers be the same? I haven't gone back and looked at my pay statements to do the math, but at a glance the box appears to only include my contributions. Or maybe it specifically means currently nontaxable for the purpose of early withdrawals?
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Mar 24, 2024 17:10
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pmchem posted:what is the combination of pensions to produce that 90k now and +90k at 63? I understand you were a fed for what, 20-30 years, but a single fed pension alone wouldn't be 90k right now, correct? It could be! E.g., someone making an average of $180k for their highest 3 years of salary who had 45 years at retirement would have an annuity of $89k. And IIRC from the federal jobs thread Evil SpongeBob started young and is pretty high up there on the GS scale, so something like that certainly seems plausible depending on the locality. For example, a GS 15 Step 4 position in Washington, DC, makes $180,359 under the 2024 pay table. Given their age it seems unlikely, but if they're somehow covered under CSRS rather than FERS for retirement, it's much easier. CSRS maxes out at 80% of the average of the highest three years of salary at 42 years of federal service, so at the higher end of the GS scale, that could hit $90k very easily. (There technically is no max under FERS I believe, but you'd have to work like 70+ years to hit 80%.)
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Apr 14, 2024 16:02
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| # ¿ May 22, 2024 06:24 |
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Shame Boy posted:Ah that's some important information I did not know, thanks. I'm a bit late to the discussion, but just make sure that the (I'm assuming) 0% APR intro period on the new card applies to balance transfers and not just purchases. Also they often have something like a separate 3-5% fee for balance transfers, at least based on the spate of 0% APR balance transfer offers I've been receiving recently. Still way better than the 20%, but just something to keep in mind.
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May 17, 2024 23:39
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