8:46 am, March 31, 2015

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  • Your Nest Egg: Decoding the TSP
    Celtic Wolf
    Investing for your retirement is a very emotional, and needs to be rational, decision. CSRS employees are blessed with their annuity (based on years of service), yet FERS peers are linked to their TSP and its annuity. It is great to have options (and related risks), yet we are playing with (investing) our future (retirement and annuities). I play it safe and use the G and L funds (knowing the return is minimal, although generally consistent). As a CSRS employee (I know OPM may take a long time to adjust my CSRS retirement annuity --- I am ex-military and several agencies), so I plan to rely on the TSP annuity as a supplement in my retirement. I have many friends still at 68% or less of their planned annuity (39 years and 74% and some with even more years). Some friends in SSA told me that 37.5 years of service is a 'break even' point (CSRS and annuity versus take home pay if stay working). It makes me wonder, with the Pay Freeze, the future of TSP and economy, and overall morale in the federal government if 2011 will be the year of Mass Exodus or the opposite and the year of In House Retirement and Slow Downs for all Federal Employees. I look forward to how 2011 unfolds, and more importantly how it (2011) impacts the CSRS and the FERS employee.
    Celtic Wolf
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Who's money is it?
    contrarian
    If it really was my money in the TSP, I'd be able to buy any product a stock broker sells. Private sector plans offer this option but yet, I'm locked into fund choices that only make guys like Bogle rich, while I see the S&P as the loser's option. I don't blame those created the TSP, but now that we see how poor the choices really are, it's time to open things up. You don't have to pay for my choices, you can stay where you're at, but why do you want to shackle my money to yours? That's just not right. Unfortnately, by the time I'm able to finally control the money in the TSP, whatever puny amount Wall Street hasn't stolen, it will be too late to do anything with it, which is sad.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Who's money is it?
    Donna S
    The TSP, like any other 401(k) plan, has a portfolio "menu" to choose from. Our job as investors is to make the best choices from that menu to get the biggest returns, always keeping in mind our own comfort level with those choices. How poor are those choices when the C fund return was 15.06%, the S fund return was 29.06% and the I fund return was 7.94% for calendar year 2010? I'm pretty happy with those numbers! After logging in to your account, there is an option to see your personal rate of return for a 12-month period. With a mix of all 5 funds, my magic number was 13.96% for 2010. No complaints here!
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Past vs Future returns
    zak6482
    I wouldn't rely too heavily on last years returns due to the rebound that occurred. The thing to keep in mind is that most of your retirement will have to come from your investments so you need a sizeable amount to fund it. This means taking risks when you're younger. I have 20 years until I plan to retire and estimate I need at least 700k at that time, and probably more. That assumes that social security fails, which it will, but that Congress hasn't touched my pension, which it might. To accomplish that, I need fairly nice returns (at least 10%). I'm not entirely unhappy with TSP, and don't think it should carry specialty items like REITs, but it would be nice to add a few more indexes to add exposure to more sectors and markets. It would also be nice if they offered like a bi-annual ability for some of us to move investments out to other IRAs. I understand the need to prevent a mass exodus of funds from TSP but I suspect most people would keep their funds in TSP since they aren't comfortable managing their funds. In the end analysis, SS is a joke, our pensions are meager at best, and many are underpaid so they only have have a limited amount of funds to invest. If not for this recession that made for a great time to buy, I'd be pricing out dog food for retirement and that's with GS-12 pay.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Past vs Future returns
    zak6482
    I wouldn't rely too heavily on last years returns due to the rebound that occurred. The thing to keep in mind is that most of your retirement will have to come from your investments so you need a sizeable amount to fund it. This means taking risks when you're younger. I have 20 years until I plan to retire and estimate I need at least 700k at that time, and probably more. That assumes that social security fails, which it will, but that Congress hasn't touched my pension, which it might. To accomplish that, I need fairly nice returns (at least 10%). I'm not entirely unhappy with TSP, and don't think it should carry specialty items like REITs, but it would be nice to add a few more indexes to add exposure to more sectors and markets. It would also be nice if they offered like a bi-annual ability for some of us to move investments out to other IRAs. I understand the need to prevent a mass exodus of funds from TSP but I suspect most people would keep their funds in TSP since they aren't comfortable managing their funds. In the end analysis, SS is a joke, our pensions are meager at best, and many are underpaid so they only have have a limited amount of funds to invest. If not for this recession that made for a great time to buy, I'd be pricing out dog food for retirement and that's with GS-12 pay.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • TSP Menu?
    contrarian
    If I don't like the menu at one restaurant, I can go to another!
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Who's money
    Moderate
    I would not have a problem with you having more choices. I would have a problem with you making all of those trades. That would drive up the administrative costs and reduce my return on investment. Therefore, I am thinking about my money.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Don't fall for the propaganda
    contrarian
    If stock brokers can price trades for under $10, why can't TSP? It wouldn't cost you anything. So get your fingers off my wallet!
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Who's money
    Moderate
    Again, whatever the cost, if you want to make all of these trades, do it with your money and not mine. Whatever, the cost is, you should bear it. If you want 2 trades per month or whatever the managers decide, that is reasonable. I have no idea what the cost of a trade is (I heard $7 + .10 per trade, plus the administrator's time) but you should bear the cost of these multiple trades. Keep your hands off my income.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Gold Risky?
    Radar Tech
    The article says gold is a risky investment. Really? In 2009, the S&P 500 lost 37.57% while Gold gained 3.28%. That's a 40.85% difference to the positive for Gold vs. the TSP's S&P fund. Lets do a little look back...in 2001 the S&P 500 lost 9.05% while Gold only lost 2.89%...in 2002 the S&P 500 gained 12.03% while Gold gained 14.27%...in 2003 the S&P 500 gained 22.17% while Gold only gained 17.32%...in 2004 the S&P 500 gained 28.49% while Gold only gained 12.75%...in 2005 the S&P 500 gained 10.74% while Gold only gained 8.55%...in 2006 the S&P 500 gained only 4.77% while Gold gained 19.17%...2007 the S&P 500 gained only 15.64% while Gold gained 20.71%...in 2008 the S&P 500 gained only 5.39% while Gold gained 32.36%...in 2009 the S&P 500 lost 37.57% while Gold gained 3.28%...THE point is, that Gold has outperformed the S&P 500 by 17% annualized over the past 5 years, 16.7% annualized over the past 8 years, and 12.2% annualized over the past 10 years. So what is really risky, playing the stock market or investing in a precious metal? It sure sounds like there is a hidden agenda here, because brokers don't make much money from folks that buy and hold GOLD, but they sure found a cash cow with buy and hold stock holders.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Gold Risky?
    Moderate
    Your comments are very deceiving as you are picking a low price for goldwhile a medium price for stock. Go back to 1980 or 1981, when gold was at its high (about $850 per ounce) and stocks were low and trace the S&P vs. gold.--------------------- We can all pick stats to suit our needs. I will say that precious metals belong in investments. Investors have to decide how much.
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • How is it deceiving to quote factual statistics for a 10 year period?
    Radar Tech
    Which of the facts cited by me is wrong? Looking at a 5 year timeframe, Gold outperformed the S&P500 by 17%. Looking at a 10 year timeframe, Gold outperformed the S&P500 by 12.2%. These are facts. The author said that Gold is "risky". If gold is a risky investment, what does that make the S&P500, since Gold has outperformed it for the past 10 years? A ten year timeframe is not insignificant. It isn't just a "blip". Your comments are very dismissive. Why would I go back to 1980 or 1981? I wasn't working for the federal government back then. I have been working for the federal government during the past 10 years. That is one third of a 30 year retirementj! Besides, doesn't the TSP issue a disclaimer that "past performance does not guarantee future returns". Do you have a magic crystal ball that lets you know that the S&P500 will outperform Gold this year? How about for the next 10 years? It sure sounds to me like you have some weird agenda.
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Use of Statistics
    Moderate
    Again, the first sentence of my second paragraph says it all. We can pick statistics to suit our needs. You picked a time level where gold was at its low and the stock market was much higher off of its low. Then you made your comparison. That is clearly not a fair comparison.--------------------------------------------------------------------------------- I illustrated the point where gold was at its high intentionally to show that statistics can be used to prove almost any argument, in this case that gold is hypothetically a bad investment.------------------------------------------------------------------------------ I want you to note a second point. In the late 70's and early 80's, the last big price rise of gold, the price went up about 6 or 7 times off of its low. This is similar to its present rise. Of course circumstances are different. Does that matter?-------------- Before the past depression of 2007, many experts were recommending the stock market and not gold. You saw what happened to the stock market.------------------- Please read the 2nd and 3rd sentence of my 2nd paragraph. note what I said about precious metals. The conclusion to be drawn is that gold is not a panacea. Neither are stocks. Both, precious metals and stocks should be included in a portfolio. The investor should decide how much.-------------------------------------------------------- You are the one who initiated this push for gold here. You are the one who chose the time period. I only showed how your choice was deceiving. I also showed that you can choose facts that can deceive even if the facts are correct by leaving out other facts.Do you have a crystal ball that says gold will outperform the S&P? Note also, that when you buy gold, you will pay a premium on it. You have the agenda not me. I did not advocate stocks. I said be careful
    worker
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Quantitative Easing = $150 Billion Per Month
    Radar Tech
    The FED announced that they would be pumping another Trillion into the economy. They have been and are scheduled to be pumping in $150 Billion per month. You tell me...what will that do to the currency? Do you think that our currency can be devalued like that without consequences? The recent "rise" in commodities, especially in the price of oil is a pretty good indicator that the money pump is destroying the value of our currency. As the purchasing power of the dollar declines and the energy costs increase (as well as food costs), both the consumer and industry will be squeezed and that will likely stall the economy. So what magic bullet will the FED use then? At least if we hold some Gold, we shouldn't be reduced to owning worthless bits of paper when this all crashes down. History is a pretty good teacher about human nature. Ours is not the first "empire" to debase its currency on the road to self-destruction. My point is that Gold is no more "risky" than the S&P500 is...at least not in the past 10 years....which is a fairly long timeframe compared to the average career. That is 1/3 to 1/4 of the average career. What part of "the S&P500 went down 37.57% in one year did you not grasp? The author was saying how risky Gold is. When has Gold ever plummeted by that much in a single year? The timeframe I am concerned with is the timeframe I am living in...not the distant past when economic policies, global interconnections, and technology were ALL different from what they are today. Looking at the past 10 years of performance gives a much better indicator of where we are than looking back 30 years ago. There has been this little invention called the Internet since then. The Cold War ended since then. NAFTA and GATT have been in operation since then. The data you are touting that we need to be looking at is irrelevant and the author is framing Gold and precious metals as "risky". I'll say it again...if the S&P500 has performed worse than Gold has for the past 10 years, and Gold is "risky", doesn't that make the S&P500 RISKY?!? Even a worse risk?
    { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }
  • Cycles
    Moderate
    The first part of your comments is good. Under normal circumstances pumping money into the economy can produce inflation. Commodities, including precious metals, are good safeguards against inflation. Of course raising inflation can be defeated by high interest rates or by a recession which stops consumers from buying items. Since precious metals are a hedge against inflation, and if inflation is stopped, then precious metals might not go up. What I am saying is this is a more complex subject then you would have us believe. I do agree that precious metals could be part of a portfolio and I also hold them------------------------------------------ Again, you are picking a point in time when gold was at its low while stocks were fairly high. And why are you comparing careers to investment cycles. One has nothing to do with the other. I am using a long term (30 year cycle) to show what happens when you invest in a product that has gomne up 6-7 times over 10 years. Stocks went up 40-50% in one year. All investments have risks and rewards. Which is better or worse. I have no idea. I am diversified.---------------------------- If you want to look at the last 10 years and say gold is better, feel free. You are not expert enough to say it is better or worse than 30 years. Neither am I. I am smart enough to know that you should compare apples to apples and not apples to oranges. This means not comparing gold from its low point to stocks which had a nice run. Of course, you will get the results you want, which is gold is better.-------- Enjoy your investments and diversify. That way, if one sector goes down, the other may go up.
    worker
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  • { "Agree":"1","Funny":"1","Insightful":"1","Disagree":"-1","Offensive":"-1","Troll":"-1" }