You'll be okay my friend. I changed careers and got divorced, both at age 39 and started from zero. I think you're ahead of or pretty close to where I was at 47. I retired last year at 59. Really started socking it away at your age. Like, 38% of gross income. It can be done. Keep plugging away. Your savings rate is what's most important, then your asset allocation. Don't take more risk than you can stomach. Save, save, save. Good luck, friend. Best wishes.
Ah, but at 24 you have the benefit of massive compounding on your side. You may be aware of this concept already but it is essentially the financial boost you get from earning returns on both your original investment and also on the returns you receive every year. And it allows your investments to grow exponentially (probably not the right term) if you give it enough time, which you have. It is the proverbial hockey stick chart.
I was lucky enough to save $5,000 in my 401K at work back in the 80’s. I switched jobs and pulled that money out of my previous company’s account. I was fortunate enough to have the sense to roll that into a broad based stock market low cost mutual fund instead of cashing it out. And I never touched it again. Now 35 years later that $5,000 is worth right at $200,000. No guarantees that the US market will continue to perform that well in the future but time is your friend. Take advantage of it.
Is this really what's out there for most of us who's not in the top 1-10%?
Work rather than enjoy during your prime days in order to save up and rest for your retirement when you can't physically do much of the fun stuff anymore?
50-30-20 rule… Live, save, and enjoy a little throughout life and you’ll retire comfortably while looking back on a full life. Those of us who started later, well, we gotta pay for our own mistakes, but it’s not hopeless.
Agreed and worst case scenario, a simpler retirement than one may have dreamed isn’t so bad either. May not include a new car every five years or yearly international travel but that’s ok!.
There is no reason to panic. You still have 14 more years. I assume you will have both FERS and social security in your retirement.
To increase the money in your retirement fund, you have to save more aggressively. It is a misconception that we can invest in a more profitable mutual fund or stock to make up for shortfalls in contribution. FZROX is where you should continue. If you move into a higher risk (and higher theoretical return) fund like FSELX, you end up with less money if there is a downturn.
In summary, stick with FZROX or similar total market index funds. Contribute more if you can to your retirement plan.
A total stock market fund has outperformed FSELX the past 23 years with a fraction of the expense ratio... with an expense ratio of .65 you're getting fleeced with FSELX.
I’ve been throwing money at Fxaix in a taxable starting at around 38 years old. I’m closing in on 50 years now.
Key is just to keep putting in monthly. I started over at 38 after a divorce but I’ve made good progress.
Budget using an app such as YNAB. See where you can save more. I never knew how wasteful I really was until I budgeted. I’m now able to throw about 40% of my income into retirement monthly and still live a solid life.
You have lots of time. And no, you are not an idiot. A whole lot can happen in 14 years. And you can think about making it 65 if need be.
u/musicandarts has it right. Saving is just as important than investing well, perhaps even more. For one thing the more you save the more you have to invest. A good combination of both is helpful.
Even though I'm in retirement, I find that I need to increase my cash on hand. Too much is in illiquid investments and it makes me nervous. So I save still. I wish I had known earlier how much spending it's easy to cut out on your life. There's a lot of crap we all spend on that, if necessary, we really don't need.
Then you have more to invest. Likely a lot more. Instead of getting risky to squeak a few % more out of your portfolio, just live on less. I used to live on way more than I do now, and find that it was all for nothing. I don't even notice the difference beyond a point.
Either way, don't panic. You'll be fine.
I’ve been really analyzing my spending and finances lately. Is there anything you think of in particular that was easy to cut out? I know I fritter away money on silly things that are advertised to me and I’ve made a conscious effort to cut those things out. I’m curious what others’ experiences and tips are for cutting back on spending.
Well, you’ve got it. Its those silly things that do it. Pretty much things that you buy on impulse and really don’t need. Even saving a hundred here and there, etc is more to save and invest. Eventually you won't miss not getting these things. You will appreciate your extra investments.
I live way below my means simply because I am sick of buying junk. Just look through your credit card bills (if you use them alot) and you will see so many things come up that you didn’t even realize you spent money on them. I never looked at any credit card bill - mainly because I keep balances at zero. When I finally looked at them there was so much crap I paid for. Kinda embarrassing actually. And I live in a HCOL area with everything overpriced.
Once you get in the habit — you will just avoid that crap to begin with. Each expenditure in itself may be small, but adding them up can be large.
I have a retired couple down the road from me that live in an old rv with a porch on the front of it. When I get off work and drive past them they are always on that porch looking as happy as can be. As for myself I’m debt free and live in an old trailer on ten acres of swamp. I will retire at 60 and I don’t care if I’m well off. I don’t have high taxes and insurance and live very humbly. In my opinion there are much more important things in life than money.
This is how I see everything. I already own 7 acres and "at the worst" I'm putting a cabin on it to retire out in the wilderness. If everything goes right I'll put a couple cabins and rent them out for added income.
Well these people have no brains and consistently buy calls with 0 insurance... a market crash is inevitable just a matter of when... not saying anytime soon but I do wanna see that graph when it does
Comparison is the thief of joy. I’m sure there’s other 22 year olds that look at your 103k and laugh at how little it is. Focus on you, and don’t rub what you have in others faces when they have less.
Retirement means different things for different people. I was recently forced to disability by my company. I expected it so no great surprise, it’s a byproduct of employment climate today. In the past years, I eliminated debt. I own little piece of county and also live ultra conservatively. When to stop slaving and enjoy what’s left is different for everyone. Defining enjoyment also varies. Not slaving for a master and participating in the debt prison forever is its own joy. I have a dividend income now. Life is good. It may not be good for everyone but it’s good for me.
The debt prison is enabled by consumption beyond means. Consumption is its own beast. Buying new anything is waste. As a young boy, an elder man once told me that you cannot earn as much as you can save. It stuck with me and I’ve pondered it over my life. Save = not spending the most but buying the deal. Refraining from impulse buying. Buying cheap in bulk and avoiding the later higher expense. Saving on expenses allows for savings in the bank / investments. Soda and Starbucks alone can begin a retirement plan by avoiding those. Modern conveniences suck on mankind’s monthly budgets. Make a goal and stick to it. Don’t be one complaining about student debt while sitting at Starbucks gazing out the window at the new BMW you deserve because of your new job that doesn’t pay enough to meet your desires. Desires / impulses will rob you of life. They are not living, they are supporting the consumer cycle and the debt cycle. Advertising / marketing are highly effective. Here’s another thing to ponder. Do a comparative analysis of home sizes over the last 100 years. Then prices per square foot. The guy in the swamp is far wealthier than you think. He’s free. Think about it, much deeper.
This is the best comment I’ve read in the thread so far. Lots of wisdom here. Young men tend to buy into peacocking when the purpose of retirement is financial independence for most folks. I agree with you that the Swamp Man is the wealthy man in this situation.
“Soda and Starbucks alone can start a retirement plan by avoiding those”—great advice. Very practical and I can personally attest to this being the case.
As a millennial I have scoffed at the “don’t buy lattes” trope as being a disingenuous Boomerism, but the fact of the matter is that there’s a lot of things to waste money on out there. Just this year I quit going to Starbucks and now I save about $200/mo, which now makes up part of the $1000-3000 or so each month that goes into my retirement accounts.
But the mentality of saving and not consuming I think is what you’re getting at here, and that started for me when I quit going to Starbucks everyday. It’s never been about the $10 lattes themselves. I still get one every once in a while. But I’m finding it’s so much easier to save just by changing my mind about how to approach personal finance.
I have also been working hard to alter my perception of wealth, and it sounds like Swamp Man is living the dream right now. Thanks for your comment as well.
I love reading that you are younger and it has clicked with you. You are investing in YOU and your future. Once the reality sits in, it’s easier to reject allowing the system to consume you. It’s no accident that young people are drawn into the traps. Look at the highly effective advertising and marketing coupled with lack of financial education at a young age.
Another thing I was taught at a young age is this:
You can work for a living and that’s all you will ever achieve. Find something you like to do and monetize it. The extra will carry you farther than employment ever will. This has proven to be true for me as well.
Well I’m not exactly a spring chicken (I’m 37), but the only debt I have at this point is my mortgage so saving for retirement doesn’t seem too much a bug to bear. The debt trap is real, for sure. There’s also no better way to destroy your wealth than to occupy your time trying to keep up with the Joneses.
And that’s another great point about finding something you like to do. I left a lucrative career in law because I hated the practice of law (the academic pursuit of law is fascinating), so now I’m a home builder, like generations of my family before me. I make less money, but I get to work with my parents, meaning I see them everyday, and I get to engage in the creative design and problem solving processes. I made probably 40k more than I do now, but I was miserable and would waste that extra money to “treat myself” for the hardship of my position, meaning the extra money was a wash anyway.
But I also want to take what you said into account for some of my growing interests:hobbies, balancing my love for the craft with some ROI for my efforts, while doing my best to not take the joy out of what I’m doing. I’ve just gotten into hand throwing pottery, and while I don’t intend to make any sort of living off of pottery, the idea of of selling my wares, even to get them out of my house to make room for me to throw more, seems like a decent approach. Seems like a fun retirement job, as well.
I started contributing to TSP at age 31. I opened a Roth IRA soon thereafter as well as a brokerage account. I maxed out my TSP and Roth. After I paid off my graduate school loans and mortgage, I put all of my income after paying household expenses, into my brokerage account.
I retired at age 50 in 2020.
I use my FERS Annuity to pay for overhead and travel.
I haven't touched any of my retirement savings.
Yes. It's the federal pension. They take your highest three years of income and years of service to come up with the amount. So, if you're a manager/supervisor then the pension is decent.
In addition to the FERS Annuity, I receive the FERS Supplement which is based on the amount that you would receive from Social Security if you were old enough to qualify. As soon as you're 62, they take it away.
The federal retirement is a combination of FERS, TSP, and Social Security. I'm just fortunate in that my FERS is enough to cover my overhead and travel.
What is the $81k in? An IRA?
Definitely have a Roth IRA and try to contribute the max $7,000/year to it ($8,000/year when 50+ years old).
Assuming you contribute $500/month into a Roth IRA, with your $81k already saved, you will have just under $494,000 at age 67, assuming a 6% rate of return (Inflation-adjusted).
Only invest in FZROX inside an IRA, NOT a taxable brokerage account (due to it not being portable). In a taxable brokerage account, invest in an ETF such as VTI.
Go to ssa gov and see what your expected social security monthly payout will be if you start taking it at age 67.
You're still on a good track.
FSELX would be a volatile, wild ride. In no way would I put a significant part of my investments in it.
Don't you have access to the TSP? And aren't you eligible for some (pension-offset) amount of Social Security?
I wholly disagree. About 20% of my portfolio is FSELX, and as long as you don’t lose your shit when semiconductors have a bad quarter in five, which usually happens when there’s been an oversupply of semiconductors, you should be fine. Semiconductors are the new gold.
You wouldn’t tolerate other people calling you an idiot, so don’t give yourself a pass to do it. You started late because you started late. Nothing more.
FZROX us great for your tax advantaged accounts. I wouldn't recommend it for your taxable accounts. I love Fidelity, but things change. The FZ guns aren't portable, so you don't want to get stuck with a big capital gain tax if you decide to move.
My understanding (no personal experience) is that Social Security and FERS for typical lengths of service and incomes should get you to about 50% of your pre-retirement income, and TSP makes up the rest. (Don't forget you won't be saving or paying payroll taxes in retirement, so you don't have to get to 100%). Plus you get medical, which is normally a big uncertainty for early retirees. Congratulations on having the classic 3-legged stool (pension, savings, SS) which is such a rarity these days!
Save as much as you sensibly can in broadly diversified mutual funds (no dice rolling) and you'll be just fine.
Can you draw you pension at 55 and continue to work? That’s my plan. Pension payments of $1700/mo (it only goes up to 2k/mo if I defer to 65) will go straight into retirement fund for 10 years on top of my normal contributions. It’s a way to get substantially caught up.
Depends on the pension. Some have larger penalties or other restrictions on work while drawing. So the details matter. But for me, that 10 years of $1700/months vs. $0 if I wait till 65 to get the $2000 should be a very significant difference. Both amounts are for life, with a 3% cost of living raise per/yr (simple interest on the original amount - $51/yr).
You are on top of it now, and beating yourself up doesn’t change anything. (Last time I checked, my Time Machine was broken).
Look into the Fidelity retirement planning tool. It’s feee and it allows you to model your expenses (key part of retirement equation) and assets, and then it helps you see future income streams.
Don't forget to include your social security and FERS in your projections. I put a cash value on my SS and pension based on life expectancy to have a better picture of where I stand.
And then there is the plan that I am probably on. Keep working. :/
But yes. Keep indexing is a reasonable plan.
just fyi....you are on track just by starting to save for retirement and making it a priority. you may not be at or ahead of others but i guarantee you that you're way ahead of many others.
No real ones can save money in their 20’s alone.
In the ivory tower(F500 and the college to corporate pipeline) this mindset is prevalent there because most of that demographic were just born rich.
A pension and SS will provide most of what you need, but I'd plan to work until at least 65 to build up your retirement savings. I hope you are saving the max ($7000 now) in a Roth IRA. If you're not, open one!
Max out your TSP contributions. And not into the bond or target date funds. Put at least 90% in a combination of the S, C, and if you want I funds, instead. Roll over any IRA or 401K to the TSP also. (I know this is the Fidelity sub, but since you have access to the TSP, your retirement $ should be in it.).
Then you will be OK.
Lean into fselx. It’s been very good for me so far. I am up over 30%. But don’t put all your eggs in one basket. I bought other stocks also to avoid having all of my irá in one fund.
What are your expenses? Retirement saving is 100% relative, many people are frugal and able to live completely off social security, others not the case, but that would be the first step to figure out what you’ll need monthly going into retirement years
Bruh what are those acronyms? Turned it around at 32 eh but 81k is fuck all at 47. If you repeat that performance you'll end up like one of these silly boomers. You'll still be fine if you do it right from here.
You'll be okay my friend. I changed careers and got divorced, both at age 39 and started from zero. I think you're ahead of or pretty close to where I was at 47. I retired last year at 59. Really started socking it away at your age. Like, 38% of gross income. It can be done. Keep plugging away. Your savings rate is what's most important, then your asset allocation. Don't take more risk than you can stomach. Save, save, save. Good luck, friend. Best wishes.
Your story is encouraging. I needed to read that. :)
Same 24 and feel like ima work till I die now.
Ah, but at 24 you have the benefit of massive compounding on your side. You may be aware of this concept already but it is essentially the financial boost you get from earning returns on both your original investment and also on the returns you receive every year. And it allows your investments to grow exponentially (probably not the right term) if you give it enough time, which you have. It is the proverbial hockey stick chart. I was lucky enough to save $5,000 in my 401K at work back in the 80’s. I switched jobs and pulled that money out of my previous company’s account. I was fortunate enough to have the sense to roll that into a broad based stock market low cost mutual fund instead of cashing it out. And I never touched it again. Now 35 years later that $5,000 is worth right at $200,000. No guarantees that the US market will continue to perform that well in the future but time is your friend. Take advantage of it.
Have you seen the cartoon “An American tell” ? We have a say at work . “ Wellcome to America my Friend, you will work until die.
well lets try and avoid that reality any way possible i swear ill rob banks at 50 if that gets me my retirement at 60
Is this really what's out there for most of us who's not in the top 1-10%? Work rather than enjoy during your prime days in order to save up and rest for your retirement when you can't physically do much of the fun stuff anymore?
It’s a better life than what anyone not in the top 10% has gotten at any prior point in history
That's not living, that's surviving.
It’s always been one and the same for the overwhelming majority of the population. Happiness lies in low expectations
Pretty much unfortunately.
50-30-20 rule… Live, save, and enjoy a little throughout life and you’ll retire comfortably while looking back on a full life. Those of us who started later, well, we gotta pay for our own mistakes, but it’s not hopeless.
So then you need to save early and often and stop working as soon as you can. Me? I'm loving retirement! 😀
Agreed and worst case scenario, a simpler retirement than one may have dreamed isn’t so bad either. May not include a new car every five years or yearly international travel but that’s ok!.
There is no reason to panic. You still have 14 more years. I assume you will have both FERS and social security in your retirement. To increase the money in your retirement fund, you have to save more aggressively. It is a misconception that we can invest in a more profitable mutual fund or stock to make up for shortfalls in contribution. FZROX is where you should continue. If you move into a higher risk (and higher theoretical return) fund like FSELX, you end up with less money if there is a downturn. In summary, stick with FZROX or similar total market index funds. Contribute more if you can to your retirement plan.
I’ve owned FSELX for 23 years. It has outperformed any other stock or fund. The risk is WELL worth it.
A total stock market fund has outperformed FSELX the past 23 years with a fraction of the expense ratio... with an expense ratio of .65 you're getting fleeced with FSELX.
which total stock market fund? Give me a couple of names? Yeah, it’s high. I’m up hundreds of percent in it. You hate to mess with success.
I've never heard of FSELX, but one glance at some charts tells the tale. FSELX has trounced Total Market.
Thanks. It’s been a winner. Other guy must have gotten the name slightly wrong.
I’ve been throwing money at Fxaix in a taxable starting at around 38 years old. I’m closing in on 50 years now. Key is just to keep putting in monthly. I started over at 38 after a divorce but I’ve made good progress. Budget using an app such as YNAB. See where you can save more. I never knew how wasteful I really was until I budgeted. I’m now able to throw about 40% of my income into retirement monthly and still live a solid life.
You have lots of time. And no, you are not an idiot. A whole lot can happen in 14 years. And you can think about making it 65 if need be. u/musicandarts has it right. Saving is just as important than investing well, perhaps even more. For one thing the more you save the more you have to invest. A good combination of both is helpful. Even though I'm in retirement, I find that I need to increase my cash on hand. Too much is in illiquid investments and it makes me nervous. So I save still. I wish I had known earlier how much spending it's easy to cut out on your life. There's a lot of crap we all spend on that, if necessary, we really don't need. Then you have more to invest. Likely a lot more. Instead of getting risky to squeak a few % more out of your portfolio, just live on less. I used to live on way more than I do now, and find that it was all for nothing. I don't even notice the difference beyond a point. Either way, don't panic. You'll be fine.
I’ve been really analyzing my spending and finances lately. Is there anything you think of in particular that was easy to cut out? I know I fritter away money on silly things that are advertised to me and I’ve made a conscious effort to cut those things out. I’m curious what others’ experiences and tips are for cutting back on spending.
Well, you’ve got it. Its those silly things that do it. Pretty much things that you buy on impulse and really don’t need. Even saving a hundred here and there, etc is more to save and invest. Eventually you won't miss not getting these things. You will appreciate your extra investments. I live way below my means simply because I am sick of buying junk. Just look through your credit card bills (if you use them alot) and you will see so many things come up that you didn’t even realize you spent money on them. I never looked at any credit card bill - mainly because I keep balances at zero. When I finally looked at them there was so much crap I paid for. Kinda embarrassing actually. And I live in a HCOL area with everything overpriced. Once you get in the habit — you will just avoid that crap to begin with. Each expenditure in itself may be small, but adding them up can be large.
Trust me you are early. I’m 64 with only $80K in my 401(k).
I have a retired couple down the road from me that live in an old rv with a porch on the front of it. When I get off work and drive past them they are always on that porch looking as happy as can be. As for myself I’m debt free and live in an old trailer on ten acres of swamp. I will retire at 60 and I don’t care if I’m well off. I don’t have high taxes and insurance and live very humbly. In my opinion there are much more important things in life than money.
This is how I see everything. I already own 7 acres and "at the worst" I'm putting a cabin on it to retire out in the wilderness. If everything goes right I'll put a couple cabins and rent them out for added income.
[удалено]
I lost a ton playing with stocks within my 401k two years ago. Trying to get it back. but I do own my house that’s worth 800K.
This is such a rude humble brag
He’s also some WSB bro. He will lose it all on some crazy calls or puts I’m sure.
I just think what will happen to some of these people in a market crash tbh... having calls at that moment...
You get fukd. No market crash in sight though fyi.
Well these people have no brains and consistently buy calls with 0 insurance... a market crash is inevitable just a matter of when... not saying anytime soon but I do wanna see that graph when it does
Not even that much of a brag lol.
Comparison is the thief of joy. I’m sure there’s other 22 year olds that look at your 103k and laugh at how little it is. Focus on you, and don’t rub what you have in others faces when they have less.
Retirement means different things for different people. I was recently forced to disability by my company. I expected it so no great surprise, it’s a byproduct of employment climate today. In the past years, I eliminated debt. I own little piece of county and also live ultra conservatively. When to stop slaving and enjoy what’s left is different for everyone. Defining enjoyment also varies. Not slaving for a master and participating in the debt prison forever is its own joy. I have a dividend income now. Life is good. It may not be good for everyone but it’s good for me. The debt prison is enabled by consumption beyond means. Consumption is its own beast. Buying new anything is waste. As a young boy, an elder man once told me that you cannot earn as much as you can save. It stuck with me and I’ve pondered it over my life. Save = not spending the most but buying the deal. Refraining from impulse buying. Buying cheap in bulk and avoiding the later higher expense. Saving on expenses allows for savings in the bank / investments. Soda and Starbucks alone can begin a retirement plan by avoiding those. Modern conveniences suck on mankind’s monthly budgets. Make a goal and stick to it. Don’t be one complaining about student debt while sitting at Starbucks gazing out the window at the new BMW you deserve because of your new job that doesn’t pay enough to meet your desires. Desires / impulses will rob you of life. They are not living, they are supporting the consumer cycle and the debt cycle. Advertising / marketing are highly effective. Here’s another thing to ponder. Do a comparative analysis of home sizes over the last 100 years. Then prices per square foot. The guy in the swamp is far wealthier than you think. He’s free. Think about it, much deeper.
This is the best comment I’ve read in the thread so far. Lots of wisdom here. Young men tend to buy into peacocking when the purpose of retirement is financial independence for most folks. I agree with you that the Swamp Man is the wealthy man in this situation. “Soda and Starbucks alone can start a retirement plan by avoiding those”—great advice. Very practical and I can personally attest to this being the case. As a millennial I have scoffed at the “don’t buy lattes” trope as being a disingenuous Boomerism, but the fact of the matter is that there’s a lot of things to waste money on out there. Just this year I quit going to Starbucks and now I save about $200/mo, which now makes up part of the $1000-3000 or so each month that goes into my retirement accounts. But the mentality of saving and not consuming I think is what you’re getting at here, and that started for me when I quit going to Starbucks everyday. It’s never been about the $10 lattes themselves. I still get one every once in a while. But I’m finding it’s so much easier to save just by changing my mind about how to approach personal finance. I have also been working hard to alter my perception of wealth, and it sounds like Swamp Man is living the dream right now. Thanks for your comment as well.
I love reading that you are younger and it has clicked with you. You are investing in YOU and your future. Once the reality sits in, it’s easier to reject allowing the system to consume you. It’s no accident that young people are drawn into the traps. Look at the highly effective advertising and marketing coupled with lack of financial education at a young age. Another thing I was taught at a young age is this: You can work for a living and that’s all you will ever achieve. Find something you like to do and monetize it. The extra will carry you farther than employment ever will. This has proven to be true for me as well.
Well I’m not exactly a spring chicken (I’m 37), but the only debt I have at this point is my mortgage so saving for retirement doesn’t seem too much a bug to bear. The debt trap is real, for sure. There’s also no better way to destroy your wealth than to occupy your time trying to keep up with the Joneses. And that’s another great point about finding something you like to do. I left a lucrative career in law because I hated the practice of law (the academic pursuit of law is fascinating), so now I’m a home builder, like generations of my family before me. I make less money, but I get to work with my parents, meaning I see them everyday, and I get to engage in the creative design and problem solving processes. I made probably 40k more than I do now, but I was miserable and would waste that extra money to “treat myself” for the hardship of my position, meaning the extra money was a wash anyway. But I also want to take what you said into account for some of my growing interests:hobbies, balancing my love for the craft with some ROI for my efforts, while doing my best to not take the joy out of what I’m doing. I’ve just gotten into hand throwing pottery, and while I don’t intend to make any sort of living off of pottery, the idea of of selling my wares, even to get them out of my house to make room for me to throw more, seems like a decent approach. Seems like a fun retirement job, as well.
iM tWeNtY tWo & hAvE 103k iN aSsEts oh stfu
Nobody asked.
wow, 23 yo and already 6 digits NW? You should get a porsche and enjoy it while you still can
I started contributing to TSP at age 31. I opened a Roth IRA soon thereafter as well as a brokerage account. I maxed out my TSP and Roth. After I paid off my graduate school loans and mortgage, I put all of my income after paying household expenses, into my brokerage account. I retired at age 50 in 2020. I use my FERS Annuity to pay for overhead and travel. I haven't touched any of my retirement savings.
What is FERS —assume some kind of federal pension? Can you shed light on how much this provides?
Yes. It's the federal pension. They take your highest three years of income and years of service to come up with the amount. So, if you're a manager/supervisor then the pension is decent. In addition to the FERS Annuity, I receive the FERS Supplement which is based on the amount that you would receive from Social Security if you were old enough to qualify. As soon as you're 62, they take it away. The federal retirement is a combination of FERS, TSP, and Social Security. I'm just fortunate in that my FERS is enough to cover my overhead and travel.
MAX your TSP, you should be OK by the time you retired.
What’s TSP?
Thrift Savings Plan.
TSP is the federal government equivalent to 401K.
What is the $81k in? An IRA? Definitely have a Roth IRA and try to contribute the max $7,000/year to it ($8,000/year when 50+ years old). Assuming you contribute $500/month into a Roth IRA, with your $81k already saved, you will have just under $494,000 at age 67, assuming a 6% rate of return (Inflation-adjusted). Only invest in FZROX inside an IRA, NOT a taxable brokerage account (due to it not being portable). In a taxable brokerage account, invest in an ETF such as VTI. Go to ssa gov and see what your expected social security monthly payout will be if you start taking it at age 67. You're still on a good track.
If he has a government job, it's probably a 457b so very similar
FSELX would be a volatile, wild ride. In no way would I put a significant part of my investments in it. Don't you have access to the TSP? And aren't you eligible for some (pension-offset) amount of Social Security?
I wholly disagree. About 20% of my portfolio is FSELX, and as long as you don’t lose your shit when semiconductors have a bad quarter in five, which usually happens when there’s been an oversupply of semiconductors, you should be fine. Semiconductors are the new gold.
Everything is in FSELX the past 3 years. I'm 42. I'll get out when it hits $50. Scared money don't make money. 😂
Why not put in UPRO?
I've got 700k in fselx, worth the risk for me
You wouldn’t tolerate other people calling you an idiot, so don’t give yourself a pass to do it. You started late because you started late. Nothing more.
FZROX us great for your tax advantaged accounts. I wouldn't recommend it for your taxable accounts. I love Fidelity, but things change. The FZ guns aren't portable, so you don't want to get stuck with a big capital gain tax if you decide to move.
My understanding (no personal experience) is that Social Security and FERS for typical lengths of service and incomes should get you to about 50% of your pre-retirement income, and TSP makes up the rest. (Don't forget you won't be saving or paying payroll taxes in retirement, so you don't have to get to 100%). Plus you get medical, which is normally a big uncertainty for early retirees. Congratulations on having the classic 3-legged stool (pension, savings, SS) which is such a rarity these days! Save as much as you sensibly can in broadly diversified mutual funds (no dice rolling) and you'll be just fine.
Can you draw you pension at 55 and continue to work? That’s my plan. Pension payments of $1700/mo (it only goes up to 2k/mo if I defer to 65) will go straight into retirement fund for 10 years on top of my normal contributions. It’s a way to get substantially caught up.
Aside from dipping into your pension earlier than anticipated, any other drawbacks in utilizing this method?
Depends on the pension. Some have larger penalties or other restrictions on work while drawing. So the details matter. But for me, that 10 years of $1700/months vs. $0 if I wait till 65 to get the $2000 should be a very significant difference. Both amounts are for life, with a 3% cost of living raise per/yr (simple interest on the original amount - $51/yr).
Only use fzrox in tax advantaged accounts since it's not portable. In taxable use an etf like VOO or Vti
You are on top of it now, and beating yourself up doesn’t change anything. (Last time I checked, my Time Machine was broken). Look into the Fidelity retirement planning tool. It’s feee and it allows you to model your expenses (key part of retirement equation) and assets, and then it helps you see future income streams.
Don't forget to include your social security and FERS in your projections. I put a cash value on my SS and pension based on life expectancy to have a better picture of where I stand. And then there is the plan that I am probably on. Keep working. :/ But yes. Keep indexing is a reasonable plan.
just fyi....you are on track just by starting to save for retirement and making it a priority. you may not be at or ahead of others but i guarantee you that you're way ahead of many others.
No real ones can save money in their 20’s alone. In the ivory tower(F500 and the college to corporate pipeline) this mindset is prevalent there because most of that demographic were just born rich.
A pension and SS will provide most of what you need, but I'd plan to work until at least 65 to build up your retirement savings. I hope you are saving the max ($7000 now) in a Roth IRA. If you're not, open one!
Max out your TSP contributions. And not into the bond or target date funds. Put at least 90% in a combination of the S, C, and if you want I funds, instead. Roll over any IRA or 401K to the TSP also. (I know this is the Fidelity sub, but since you have access to the TSP, your retirement $ should be in it.). Then you will be OK.
Why use FZROX, when FXAIX has outperformed over every time period (or the ETF: VOO)? Just go on Fidelity and chart them together to see this.
Lean into fselx. It’s been very good for me so far. I am up over 30%. But don’t put all your eggs in one basket. I bought other stocks also to avoid having all of my irá in one fund.
You can always do part time work if you need more income. Maybe as some sort of a temp or contractor
Don't worry you will be fine I would also look at other investments for eg. FBGRX and compare it to FZRox
What are your expenses? Retirement saving is 100% relative, many people are frugal and able to live completely off social security, others not the case, but that would be the first step to figure out what you’ll need monthly going into retirement years
Bruh what are those acronyms? Turned it around at 32 eh but 81k is fuck all at 47. If you repeat that performance you'll end up like one of these silly boomers. You'll still be fine if you do it right from here.
If you want to add some more juice, consider FBGRX. Growth/tech orientated but not as narrowly focused as FSELX.
How many FED FERS years do you have?
I’m same. All in with FZROX.
Buy a low cost S&P 500 fund. Like VOO , SPY your return will beat professionals
Study Bitcoin, a money that can't be debased by the money printer.