Percent of income to investments?

[RobG]

I'd do more than 15% if you can swing it. Basically save as much as you can afford when you are young. Don't buy that new rifle if the old one will work, etc. It pays off bigly when you hit your 40s and 50s.

Again, I would encourage people with investing questions to go to bogleheads.org and learn their philosophy. Bottom line is that the best investment advice is to avoid unnecessary taxes and fees, and understand quality asset classes and reasonable expectations for returns.

 

[Sytes]

I went 15% about 19 years ago after my supervisor said "just do it". I got used to it not being in my take-home. Not as many toys, but should be in a good place when I am eligible in 10 years and 2 months. Glad I took the advise.

I'm catching up with this... I have a TSP that I am close to another 5k$ away from capping max amount yearly. Had I maxed at the beginning this would certainly be softer on the wallet today.

Also, I had a Q - not to detract from the opening post though I believe the response(s) will meet the intent of Benac's thread:

One tip would be to never borrow against your 401k even to buy a house.

I imagine this would figure the same for TSP (Thrift Savings Plan - Federal)... I've done this and curious why would this not be a choice? It is a loan against my own TSP value for 15 years. Npaden or others, would you expound on this comment?

 

[npaden]

Also, I had a Q - not to detract from the opening post though I believe the response(s) will meet the intent of Benac's thread:


I imagine this would figure the same for TSP (Thrift Savings Plan - Federal)... I've done this and curious why would this not be a choice? It is a loan against my own TSP value for 15 years. Npaden or others, would you expound on this comment?

You should be investing your retirement assets with a goal of achieving somewhere in the range of a 10% return on them. Some would say it would be more conservative to shoot for a 8% return, and that is probably correct in making your calculations, but I am a pretty aggressive long term investor and I am personally targeting something closer to 10%.

Right now mortgage rates are in the 3 to 4% range. Not sure what you are paying yourself on the TSP loan, probably a little more than that, but you could be paying someone else 3 or 4%.

So instead of having your money invested in the market earning somewhere from 8 to 10%, you are paying yourself something less than that. In addition you could probably be paying someone else even less than that.

You are missing out on a spread of anywhere from 4 to 7%.

Sure, with timing the market is going to have times where it earns less, but on a 15 year period it should work out much better having that money invested in the market.

That's my 2 cents anyway.

Nathan

 

[1_pointer]

I'm catching up with this... I have a TSP that I am close to another 5k$ away from capping max amount yearly. Had I maxed at the beginning this would certainly be softer on the wallet today.

Also, I had a Q - not to detract from the opening post though I believe the response(s) will meet the intent of Benac's thread:


I imagine this would figure the same for TSP (Thrift Savings Plan - Federal)... I've done this and curious why would this not be a choice? It is a loan against my own TSP value for 15 years. Npaden or others, would you expound on this comment?

In regards to the last part, my mortgage interest rate is less than my account is growing. I can borrow money to buy a house. I cannot borrow money to retire.

Then again, I'm lazy and dumb when it comes to finances and is why I only have what I have, but the above is my rationale for not borrowing against my retirement account.