new post from an old fed

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federal dinosaur
Posts: 16
Joined: Fri Jan 04, 2013 10:49 am

new post from an old fed

Post by federal dinosaur » Fri Jan 04, 2013 11:20 am

Greetings Bogleheads! I have been reading posts to this forum for quite some time. I have become somewhat familiar with some of the "seasoned" contributors to this site. The advice given here is truly helpful. I appreciate that almost all the posts are considered thoughfully & snarky comments are few. The moderator is doing a great job. I have found that many of the supposed financial advisors in private industry are not very familiar with the two federal retirement systems (FERS & CSRS) and are even less familiar with the Thrift Savings Plan and its options for investment. It is time that I step up and see what others may suggest with respect to my own financial path.

summary of holdings:

Emergency funds: approximately 50K in local credit union checking account
Debt: None.
Tax Filing Status: Married Filing Jointly
Tax Rate: 28% Federal, 6% State tax rate
Age: 56

Total portfolio: six figures

fed gov’t employee in FERS
still working, but expect retirement in late 2014 or 2015
FERS retirement includes a defined benefit pension component (estimated to be approximately 38K per year)
current social security estimate is 16k/year

Thrift Savings Plan (approximately 640K)
65% C fund
20% Small Cap
15% I fund

Taxable account (<100K)
50% VTSMX - Vanguard Total Stock Market
15% AKREX - Akre Focus Fund
15% NAESX - Vandguard Index Trust Small-Cap Index
15% RYOCX - Rydex Series Trust - NASDAQ-100 Fund
10% VWIGX - Vanguard International Growth
10% WFWIX - Vanguard FTSE All-World

Roth IRA (<25K & I've had this account open for 4 years)
AKREX - Akre Focus Fund is the largest holding (>50%) with the remaining money in (AT&T & MSFT) and a smattering of other individual stocks.

Annual Contributions:
max allowable for the TSP tax deferred
max allowable for the TSP catch-up tax deferred
max allowable for the Roth IRA

I do not wish to include my wife’s job or financial status as part of any calculation or revisions.

It is my current intention (in the future) to utilize the 401K Roth as my emergency fund should I need quick cash. I believe I can withdraw funds from this Roth account if I need the money after the account is five years old. The use of the Roth IRA as the emergency fund would allow me to invest the money currently residing in the credit union checking account.

Question:
1. Suggestions/comments for TSP allocation as I enter into retirement mode? Note: upon retirement, I intend on utilizing a monthly withdrawal from the TSP of about $1000/month.
2. Suggestions/comments for taxable account?
3. Suggestions/comments for Roth IRA account?

I look forward to your comments. The percentages I've noted above apply to the account identified. I was uncertain exactly how to apply the percentages when mixing my TSP w/the other accounts... sorry if this causes unnecessary confusion.
Last edited by federal dinosaur on Fri Jan 04, 2013 2:23 pm, edited 2 times in total.

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Pennstateclj1
Posts: 501
Joined: Sun Apr 03, 2011 2:53 pm
Location: State College, PA

Re: new post from an old fed

Post by Pennstateclj1 » Fri Jan 04, 2013 12:56 pm

Welcome to the forum!

I'm under the FERS system also.

You've done a good job accumulating a hefty amount in the TSP. How would you feel if your $640k became $320k in a year? That's the risk you're taking by holding nothing in bonds. The TSP is your most substantial account within your portfolio, and you need to do a better job of playing defense. I would suggest you make these changes immediately and change to the L2020 which is currently about 55% stocks/ 45% bonds and will automatically become the L income fund in 7 more years. https://www.tsp.gov/investmentfunds/lfu ... 2020.shtml If you don't like that you can pick your own funds, but it needs to work with your other two accounts.

As for the taxable and ROTH if you could put the names of those funds that would be helpful, I doubt most here are going to take the time to look each of them up individually. It looks like the total portfolio is about $750k which is a nice sum to add to your three legged FERS stool. We can help more once you put the names of those other funds. Also, you did the percentages within each account, recalculate the percentages across the whole $750k portfolio please.

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VictoriaF
Posts: 19068
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: new post from an old fed

Post by VictoriaF » Fri Jan 03, 2014 9:35 pm

Pennstateclj1 wrote:Welcome to the forum!

I'm under the FERS system also.

You've done a good job accumulating a hefty amount in the TSP. How would you feel if your $640k became $320k in a year?
At first, I agreed with you. But then I realized that the OP will have $54k in the annual income and presumably a paid off house (he has no debt). Thus his basic needs are mostly met and he is in position to do what he wants with his investments.

Having said that, an all-stocks portfolio is nerve-wrecking. I am partial to the TSP G fund. It's a great benefit of being a Fed and not having to worry with the rest of the world about the future bond rates.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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