Page 56 - The Informed Fed--Hearn (edited 10.29.20)

the G fund, where it has no risk of loss. Although it’s not all that exciting,
he knows that he has already doubled his money. He can sleep well
knowing that he will not experience any losses. Based upon his salary,
5% is just a little over $100 each pay period, or about $2,700 per year.
His contribution plus the matching funds from the government and the
interest on the entire balance helped his TSP account grow by almost
$6,000 last year while many of his co-workers lost thousands. His plan is
to retire within 13 years. Based upon his contribution rate, the total will
be in the $35,000 range. Taking into consideration the matching funds
and moderate but consistent interest rate, his TSP will grow by another
$100,000. With other investments, he will have enough for retirement.
This example shows us that by saving $5,000 per year at 2-5%
interest, his TSP will grow to an estimate of $150,000 in a 20-year career.
That can add a considerable amount of monthly income during
retirement and help fill the income gap many employees face when they
retire. We have seen many employees with the same benefit plan as their
co-workers and yet one employee was forced to seek employment in
retirement, yet another who had more income in retirement than when
they were employed by the government.
Guaranteed interest- and tax-free funds are available that most
federal employees are unaware of. For a federal employee making
$52,000-year, 10% means saving $200 each paycheck for retirement. If
you are like most employees we visit with, you are over 30 and have not
started putting away the amount necessary to provide a secure
retirement. You may be like the thousands of people starting over
because of life’s roadblocks that seem to get in the way at the worst
possible time. You know the list: bankruptcy, divorce, refinance, kids,
failed business ventures, health issues, etc. The good news is there is
hope! The difficult part is that you need to become more aggressive and
educated about your retirement investments. Take some time to review
your budget and determine where you can make some cuts. You need to

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