so I got a Federal job and have to choose my benefits package--help!

[NMDemDist2]

i've got about 10 years to retirement and hubby is very gun shy about putting ANY money in the market but I'm thinking I can get in low and when the recovery happens I'll be in good shape

suggestions?

[billyoc]

1. 10 years to retirement? Bonds.

Forget the stock market with money you'll need in 10 years.

[NMDemDist2]

2. the Federal retirement system

I don't know how much choice I have. I wonder if their funds are safer?

[billyoc]

3. Just ask the shop steward, I don't know the details of the choices you have.

:hi:

[NC_Nurse]

4. I'm staying in. If you buy when things are down, you get more shares and

when recovery happens, you'll benefit. ONLY buy stocks in solid companies though. They are all way down right now.
Dollar cost averaging is what makes money in the long term.

That said, I am diversified. I stretched my budget to afford some good rental properties too. After a couple of slow years thanks to the sub-prime mortgage debacle, I now have great tenants who pay the mortgages and I get a little extra each month to cover expenses.

I would get into whatever programs they offer that are in BIG safe companies, and do some independent stuff as well. That way, SOMETHING should work out.
I have learned to ONLY buy things that will appreciate in value, not depreciate - like cars, boats, bling, etc.

[yellowdogintexas]

5. are your contributions being matched? You are already ahead in that case.

when you set up the fund do these things:
if your matching is 50% up to a certain amount or percentage of your income then your contribution should be whatever it takes to make that 50% as high as possible.

if you have an over 55 catchup allocation, have some put in there too. It won't be matched but helps build up the total $$.

When you set it up , you can certainly allocate the funds mostly to bonds and other safer investments. However you may want to allocate say 5% to a higher risk investment (choose the one with the highest 10 or 20 year interest yield %) Remember each pay period the new money is used to purchase shares of whatever you are choosing, and right now you are getting more shares for your money. If that fund starts to recover and increase in value, you have more shares.

[MercutioATC]

6. "Benefits" package? Do you mean TSP allocations, health plan, what?

If you're talking about TSP allocations, I'd use the G Fund to weather this storm and then look at moving some of it into the C, S, and I Funds once we've turned the corner.

The G Fund Might only be making 4% (which doesn't even keep up with inflation) but it's better tan losing money.


(of course, if you've already taken a bath in the C, S, or I Funds, you may want to leave the money there to avoid selling low. 10 years will probably give that money time to recover)

[scruffy]

7. Plan to join the TSP plan

You are able to contribute up to $15,500 for 2008, plus another 5% if you are over 50. Assuming you are a FERS employee, the government does a 5% match, so you at least want to contribute that amount.

Even if you have 10 more years before you retire, how many years before you would actually need to use whatever is in the account? Many people wait until they are 70-1/2, especially if they have income from other sources. But on the assumption that you won't be using the proceeds for at least 10 years, I would do 60% to the C fund, 20% to S, and 20% to I. You will be purchasing shares at a very low price, which means you will end up with more of them.

When you are closer to retiring I would move a portion over to the G fund, but with at least 10 years before you are going to use the money, I would still go with equities.

[NMDemDist2]

8. thanks, that was very helpful. I think (since I have to wait for a few months anyway for TSP)

I'll wait til the election is over and the new Treasury head is picked.

that will make my decision a lot easier

[A HERETIC I AM]

10. Scruffy!!! LTNS!

Howarya?

Hope all is well up your way.:hi:



Isn't the after 50 "catch-up" $5000, not 5% ?. ($1000 in Traditional IRA's, right?)

I know you knew that, so I bet it was a slip of the finger! :headbang:

[scruffy]

11. Oh no! It WAS a slip of the finger!

Catch-up is $5000, not 5%. Sorry!!

[latebloomer]

9. There are also the "L" funds

which allocate your money more or less conservatively, depending on your age.

I have NO tolerance for risk and am 100% G-fund. Right now I'm glad I am, though over the years I would have done a lot better if I weren't such a scaredy-cat.