“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” - John Templeton. Image: Deacons docs/Shutterstock.com
By: John GrobeWe’ve often said how important it is to have a robust Thrift Savings Plan (TSP) account by the time you retire and need the money. And you’ve been told that FERS and Social Security will keep body and soul together; but that you will need your TSP in order for you to have the type of retirement of which you’ve dreamed.
You’ve been presented with calculations that show you how a consistent savings plan can leave you with enough money in your TSP to be able to support you as well as help you whittle away at bucket list items. And you’ve been advised on the best ways to withdraw from your TSP so that you can both enjoy your retirement and still have money left when you head for the last roundup.
But you were rarely told where you were going to get the money to fund your TSP so that there will actually be enough money in it so that you can truly enjoy your retirement. Believe it or not, throughout history everyone from philosophers to money managers have been giving us hints as to how to build up our savings. Here are a few examples:
Economy is a great source of revenue.
Seneca (1 BC – 65 AD)
Frugality is a handsome income.
Erasmus (1466 – 1536)
A penny saved is a penny earned.
Benjamin Franklin (1706 – 1790)
Here are some more modern adages:
If you want to be wealthy, live below your means.
From “The Millionaire Next Door”, Thomas J. Stanley and William D. Danko
Save a lot and save often.
Richard Bernstein
When your outgo exceeds your income, your upkeep becomes your downfall.
Rick Rule
“Two of the hardest things to do is save when you’re young and spend when you’re old.”
Unknown.
“I’m more concerned about the return of my principal than the return on my principal.”
Will Rogers
“The poor and middle class work for money. The rich have money work for them.”
Robert Kiyosaki.
“Getting rich is easy if you follow three rules: spend less, save more, and invest the rest.”
Kevin O’Leary.
What can you realistically do to build up your TSP? Here are some thoughts, many of which you might have read in FEDweek’s TSP Investment Report and other sources.
- “Strive for five.” Commit to setting 5% of your income aside in the TSP each pay period. This way you receive the entire government match. Nothing beats free money.
- Put a part of each pay raise into the TSP and part of it into your pocket.
- Consider increasing your contributions a little each year; say from 5% to 6% to 7%.
- Save for your children’s education through a 529 Plan or a Coverdell ESA, so that college costs don’t sneak up on you and derail your retirement savings plans.
- Set up a budget. Ideally you can use your budget to manage your expenses and cut down in areas where you are wasting money.
- Consider how you can advance your career and earn a higher salary. The higher your salary, the more you can save: 5% of a GS-13’s salary is more than 5% of a GS-12’s.
Can you succeed at growing your TSP and having a comfortable retirement? Here’s one last quote, from a retired race car driver, that can give you hope.
“Success is where preparation and opportunity meet.” – Bobby Unser.
Finally, some perspective on market volatility:
“Don’t confuse a Bull Market with brains.”
Anonymous
“Every recession in the United States has been caused by the Federal Reserve.”
Paul Krugman
“If you are a long-term investor, you will view a Bear Market as an opportunity to make money.”
John Templeton
“Businessmen can profit handsomely if they will disregard the pessimistic auguries of self-appointed prophets of doom.”
J. Paul Getty
“Bears make headlines, Bulls make money.”
Anonymous
“A Bull Market bails you out of all your mistakes. Bear Markets make you pay for your mistakes.”
Dick Russell
“History repeats itself all the time on Wall Street.”
Edwin Lefevre
“The bigger the top, the bigger the drop.”
Ralph Acampora
“The stock market has forecast nine of the last five recessions.”
Paul Samuelson
“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”
John Templeton.
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.”
John Bogle
“Inflation: When nobody has enough money because everybody has too much.”
Harold Coffin
“Don’t fight the Fed – fear the Fed.”
Michael Sincere
John Grobe is a retired federal employee and retired retirement educator with over 30 years of experience in helping federal employees understand their retirement.
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