The Finance/Retirement Thread

lindy

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I live in Hawaii. Cost of living and taxes are crazy here. Thank God I'm in the military.
My annual salary from MD to HI DECREASES $9k according to OPM pay tables but I assume civilians get COLA or something. I know they’re having a helluva time filling USG billets because it’s so expensive.
 

Blizzard

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Interesting but, if this article rings true, and I imagine it does, it's probably a better gauge for determining "how you're doing":
$1 million may not last you in retirement—here's how to figure out how much you need
CNBC article said:
According to retirement-plan provider Fidelity Investments, a good rule of thumb is to have 10 times your final salary in savings if you want to retire by age 67. Fidelity also suggests a timeline to use in order to get to that magic number:

* By 30: Have the equivalent of your salary saved
* By 40: Have three times your salary saved
* By 50: Have six times your salary saved
* By 60: Have eight times your salary saved
* By 67: Have 10 times your salary saved
But ultimately, it comes down to your lifestyle in retirement and how much you spend.
 
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GOTWA

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I better die young 'cause I'm fucked at this point. I'll need to contract OCONUS to get out of my hole.
 

Dienekes

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Here is what I have got going so far.

-2 Years TIS, from FL so I pay no state tax.
-I opted into the Blended Retirement System.
-Currently contributing 5% of base pay into a Roth TSP with 5% matching contributions from the gov.
-I own my condo in Hawaii and have already garnered a decent amount equity. Thanks VA home loan!
-I consider my Jeep an investment;-)

I plan on keeping this condo and renting it out once I PCS. BAH is crazy high (2800 for E-1 through E-4 and higher for higher rank) when my mortgage/HOA fees is $1900/month should give me a small supplementary income while I am gone. I also plan on utilizing the rest of my VA Home loan to buy property on the mainland.

That is it for now. I am open to any advice you guys have for a younger guy like myself! My wife and daughter are very important to me, and ensuring we have a secure future is a priority.
You can refinance your HI condo, and that will replenish the VA loan guarantee back to the full amount, and you can do that into eternity so long as you follow the 2yrs worth of living in the property rule.
 

Dienekes

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I'm very interested in this stuff, and would love to get some sort of designation/credential so that while I'm in, I can better advise my soldiers or even have a small thing on the side because I find this sort of thing enjoyable. The problem is that a lot of those are like apprenticeship or professional licenses that require a good bit of experience before having the designator. I don't want that to be my job, I just want to be able to help myself, family, friends, friends of friends, etc.

Coming from a small town in LA, people just don't talk about money because it's considered rude, but then we end up with a majority of people who know nothing about finance, investments, risk, and whatnot but don't want to pay a financial advisor to handle their money. They end up with a lot of toys in middle age but end up dependent on SS in retirement. I firmly believe that is a big reason that the middle class is dying, and this topic is something that should be just as mandatory in school as English and Math. Not just some one-off mandatory ECON class or business class that you have to take as general ed but like a straight up at least 4 semesters of personal finance in high school and preferably more in college.
 

ThunderHorse

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I'm very interested in this stuff, and would love to get some sort of designation/credential so that while I'm in, I can better advise my soldiers or even have a small thing on the side because I find this sort of thing enjoyable. The problem is that a lot of those are like apprenticeship or professional licenses that require a good bit of experience before having the designator. I don't want that to be my job, I just want to be able to help myself, family, friends, friends of friends, etc.

Coming from a small town in LA, people just don't talk about money because it's considered rude, but then we end up with a majority of people who know nothing about finance, investments, risk, and whatnot but don't want to pay a financial advisor to handle their money. They end up with a lot of toys in middle age but end up dependent on SS in retirement. I firmly believe that is a big reason that the middle class is dying, and this topic is something that should be just as mandatory in school as English and Math. Not just some one-off mandatory ECON class or business class that you have to take as general ed but like a straight up at least 4 semesters of personal finance in high school and preferably more in college.
Most of the companies that hire Financial Planners make you sit for the exam before you're actually hired. The salary you receive from them is a short term starter as you're supposed to build up your client base unless you get with Goldman or Charles Schwabb which they are big money advisors and the client is theirs rather than yours. Looked into that when I was getting out. To be a legit CFP you have to take the Series 6 and Series 7 Exams.
 

Isiah6:8

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To be a legit CFP you have to take the Series 6 and Series 7 Exams.
Dead on. You also have to have a shop sponsor you for the Series exams which keeps everyday people from obtaining the designations and more importantly being able to sell or offer up advice.

@Dienekes - to obtain most designations, you will have to want a career of it or have continuing education as part of the designation depending on what acronym you want to go for.

That being said, if you want to have a lasting impact in your area there are groups that do financial literacy and have outreach programs. It might be beneficial to get in touch with that group and have them come in to talk with your guys. They break the ice quickly, and then meaningful conversation lasts as long as people want. Usually afterwards there is one on one stuff. The people speaking on the topics are vetted and that way you don't get yourself in a pickle if anything happens.

@Marauder06 I just got back from the islands, I was floored by how nice everyone was, but man it was expensive.
 

lindy

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Coming retirement eligible US genpop:

The peak of the baby boom was in 1960. People born then will reach the typical retirement age of 65 in 2025. How many people are we talking about?

Answering this question is not only important for the Social Security Administration (SSA)—considering the potentially large group of retirees approaching their SSA benefit collection—but is also useful for policymakers interested in evaluating the performance of the labor market.
How Many People Will Be Retiring in the Years to Come? | St. Louis Fed

28100

C’mon 2027!!!!!
 

lindy

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I occasionally poke around this guy’s TSP site for analysis of market trends that affect the various TSP funds.

https://tspsmart.com/Best-TSP-Allocation-in-2019

For federal employees, retirement consists of basic benefit (typically 1.1% of avg high salary X years of eligible service), social security, and TSP. Normally the most significant benefit is ability to retain medical insurance as a retiree but Tri-care offsets that as a tangible benefit (I’m not Tri-care eligible until 59 1/2) but I’m eligible to retire from USG at 57.

My current plan is to retire from USG at 57, work for @Florida173 as a contractor, and then FULLY retire at 59 1/2. The GOAL is to eliminate debt while maximizing TSP and shoot for complete retirement at 57 to live in a retiree tax friendly state.
 
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BloodStripe

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I'm looking at 2050 for retirement (will have 40 years of Government service at that point and be the ripe age of 67). My goal is to have at least $1m in my TSP account (assuming no major financial downturns my current projected growth puts me somewhere around $1.3m), plus SS, plus FERS. Theoretically that should be around $6,800 monthly before touching my TSP. That difference will be around a 35% reduction in salary, which I feel that my TSP will more than be able to sustain my wife and I through death (who ever is the last to go). This doesn't even include my wife's 401k. Even if I just withdrew the paycheck difference from preretirement, that should last an easy 30 years without any further growth). I could probably retire sooner but as long as I still enjoy working, it will give me something to keep busy. Maybe I'll look at retiring sooner if a defense contractor wants to hire me as a Contracts Manager and pays $250k a year I'll consider it. I'll just throw the extra $110k (this assuming I don't progress above GS 13 Step 10 pay) into a different investment portfolio for a couple of years.
 

Isiah6:8

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Here are two pretty good reads, I am looking forward to the third part. I think intuitively a lot of people in the industry when planning or if they have planners inflation adjust for cost of living 10/20/30+ years out, however, I think a big misconception this nails is the growth rates assumption. Lot of talk about the double edged sword financial literacy is to the industry right now.

Everything You Are Being Told About Saving & Investing Is Wrong – Part I | RIA

Everything You Are Being Told About Saving & Investing Is Wrong – Part 2 | RIA
 

BloodStripe

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lindy

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I do wish I fell under that old 0.8% FERS contribution amount. A 3% difference doesn't seem like much until you look at it over 30 plus years of service.

Grandfathered in employees will have paid something like $9.2k into FERS over 30 years. Us newer hires will pay in around $42k. Big difference for equal benefits.
Fed LEOs (@Kraut783) and other agencies (eligible at 50 with certain OCONUS service) have it even better than we do!
 

Marine0311

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Here are two pretty good reads, I am looking forward to the third part. I think intuitively a lot of people in the industry when planning or if they have planners inflation adjust for cost of living 10/20/30+ years out, however, I think a big misconception this nails is the growth rates assumption. Lot of talk about the double edged sword financial literacy is to the industry right now.

Everything You Are Being Told About Saving & Investing Is Wrong – Part I | RIA

Everything You Are Being Told About Saving & Investing Is Wrong – Part 2 | RIA
Very eye opening!
 

LibraryLady

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Talking to a friend and I remembered these words of advice I got from my father when I was pursuing a divorce many years ago.

After marriage of at least 10 years, the person you are married to is entitled to a portion of your SS and retirement. Doesn't matter how long you've been divorced and/or you remarry. So when you plan your retirement and you've got a previous 10+ yr marriage in your history, make sure you remember that portion isn't yours.

LL - previously married for 10 years minus 3 days thanks to an attorney with mad skillz... 8-)
 
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