Maxing TSP

[Raise when?]

This is such a wholesome thread. The concepts are generally very simple, but it’s easy to get sucked in and spend more as we make more. There is something to be said about living a little and having some fun because we are pretty well off financially compared to most once we’re at a higher facility. Since we’re giving financial advice I’ll share some tidbits a wise man once told me and they’re pretty straightforward.
1. Live below your means
2. Save up an emergency fund that can pay all your expenses for three to six months.
3. Make more than the minimum payments on your debts and knock out the principal faster.
4. Once you pay your debt off, take that same monthly payment amount and invest it.
As others have stated, this student loan interest moratorium is a godsend and the opportunity of a lifetime to pay off thousands of dollars interest free. Take advantage!

the debt thing isn't necessarily true. If you have a low interest rate, why would you want to pay it off faster? There is a guy at my work who was trying to pay off his 15 yr mortgage faster, making extra payments and all. His wife ended up getting the house when they divorced... I'll borrow at 3% all day and make the minimum payments, invest the rest and make more money.

 

[DankVectorz]

There is a guy at my work who was trying to pay off his 15 yr mortgage faster

15 year mortgages are a financial scam, provided you do something that makes the difference in mortgage payments make you money grow. If you just spend it on crap different story.

 

[AnyTrafficPleaseAdvise]

the debt thing isn't necessarily true. If you have a low interest rate, why would you want to pay it off faster? There is a guy at my work who was trying to pay off his 15 yr mortgage faster, making extra payments and all. His wife ended up getting the house when they divorced... I'll borrow at 3% all day and make the minimum payments, invest the rest and make more money.

Depends on what kind of debt we’re talking here. A credit card, student loan, or a car loan should be handled differently than a mortgage for sure.

 

[Uglytaco]

788 per paycheck

Can you divide that between Roth and Traditional? For example:
$400 Roth
$388 Traditional
?

 

[MJ]

TSP itself actually have some online seminars coming up

Online learning | Thrift Savings Plan

www.tsp.gov

Can you divide that between Roth and Traditional? For example:
$400 Roth
$388 Traditional
?

A mix of both Roth and traditional TSP​

You may consider splitting your contributions between Roth and traditional TSP. Note that if you receive automatic or matching contributions from your agency or service, those contributions will always go into your traditional TSP balance and cannot be converted to Roth.

Making contributions | Thrift Savings Plan

www.tsp.gov

For 2022, since the contribution limit went up, how much did I need to put per paycheck in Roth to have it maxed?

How much can I contribute? | Thrift Savings Plan

www.tsp.gov

 

[HenryTheAce]

788 per paycheck

Isn’t it 789?

788x26 is only 20,488

 

[jdatc]

the debt thing isn't necessarily true. If you have a low interest rate, why would you want to pay it off faster? There is a guy at my work who was trying to pay off his 15 yr mortgage faster, making extra payments and all. His wife ended up getting the house when they divorced... I'll borrow at 3% all day and make the minimum payments, invest the rest and make more money.

Once you’ve had no car payments and no house payment, it is tough to go back.

We upgraded our house and held the mortgage for about 1/2 a year before we said nah. It Didn’t help the mortgage broker pissed off my wife and out of spite decided to kill his commission with an early payoff.

True investing would beat it with some risk but man it is a great feeling.

 

[32andBelow]

Once you’ve had no car payments and no house payment, it is tough to go back.

We upgraded our house and held the mortgage for about 1/2 a year before we said nah. It Didn’t help the mortgage broker pissed off my wife and out of spite decided to kill his commission with an early payoff.

True investing would beat it with some risk but man it is a great feeling.

We have fairly safe jobs. People in the private sector doing this are crazy. They can get fired any moment and wether you own 50k or 500k they’re gonna take it

 

[jdatc]

We have fairly safe jobs. People in the private sector doing this are crazy. They can get fired any moment and wether you own 50k or 500k they’re gonna take it

Lol. Think of the month long shutdown how many controllers were full on panic living check to check.

Safe is relative.

You are one small mishap away from losing your medical your whole career. Take one errant hit to the eye and boom…. Or get some migraines, or vertigo…. Medical retirement isn’t a great option.

 

[32andBelow]

Lol. Think of the month long shutdown how many controllers were full on panic living check to check.

Safe is relative.

You are one small mishap away from losing your medical your whole career. Take one errant hit to the eye and boom…. Or get some migraines, or vertigo…. Medical retirement isn’t a great option.

still much safer than a private job that can lay you off tomorrow with no Warning

 

[atc12bsthrowaway]

Lol. Think of the month long shutdown how many controllers were full on panic living check to check.

Safe is relative.

You are one small mishap away from losing your medical your whole career. Take one errant hit to the eye and boom…. Or get some migraines, or vertigo…. Medical retirement isn’t a great option.

40% of my high 3 seems like a pretty sick option tbh

 

[AB19]

40% of my high 3 seems like a pretty sick option tbh

Yeah I don’t get this, isn’t this a better deal than the 39% you get after 25 years? Obviously you don’t make as much for as long but it seems like a good gig regardless

 

[jdatc]

Yeah I don’t get this, isn’t this a better deal than the 39% you get after 25 years? Obviously you don’t make as much for as long but it seems like a good gig regardless

https://www.opm.gov/forms/pdfimage/sf3112-2.pdf

60% for a short time at first too I think-

 

[AB19]

https://www.opm.gov/forms/pdfimage/sf3112-2.pdf

60% for a short time at first too I think-

Think it’s 60% the first year and 40% following that

 

[Mike Kilo]

Sign me up. 18 more years will get me to 43% ?. No brainer to me.

 

[Kramer]

Can you divide that between Roth and Traditional? For example:
$400 Roth
$388 Traditional
?

You should be able to. I was 400 Roth/350 traditional this past year.

 

[wand_waver]

You should be able to. I was 400 Roth/350 traditional this past year.

I know it’s situation dependent, but what is the pro of doing a split like this (or any split) between traditional and Roth?

 

[32andBelow]

I know it’s situation dependent, but what is the pro of doing a split like this (or any split) between traditional and Roth?

Having a mix can be good. It’s a lot cheaper to invest I to a traditional now and if your not sure what tax bracket you’ll be in in the future hedging could be good.

My tsp is traditional then I have an external Roth IRA

 

[Kramer]

I know it’s situation dependent, but what is the pro of doing a split like this (or any split) between traditional and Roth?

A few reasons. It's cheaper to do 400 Roth vs 750 Roth. More options when you retire. When you retire you will only be able to pull traditional before 60/61. And remember all you agency matches are traditional.

I'm slowly increasing to more Roth every year.

 

[DankVectorz]

I do 50/50 because I am definitely expecting to be in a lower tax bracket after I retire.