ajmom
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Post by ajmom on Mar 21, 2020 19:52:51 GMT -5
I would appreciate your advice. I retired from federal government in 2018 after 34 years; currently age 60. Divorced husband of 30 years in 2017. My two adult children (Daughter 21, college Junior; and Son, who works, age 24) live with me -- no child support obviously, but I could certainly use it!) Ex-husband relocated across country after divorce to a highly lucrative job, but as was the case when we were married, kids can rely only on me.
Basically had to retire in 2018 as had major medical issues at work (and no support from work -- toxic environment). Happily, medical issues have resolved (minor miracle), but most likely will face ageism so really no chance or getting a highly paid job again. I just started doing some volunteer work and "living again" with medical issues resolved when BAM you know what hit a few weeks ago...
I live in HCOL -- rent is probably twice what I'd pay if I bought something here, but I'm not convinced I'll live here within next 5 years. I hope to move to lower cost of living area in next couple of years.
I have federal pension (net after health care and taxes) of $3,000/month. My TSP is $960,000. Currently sitting on $323,000 in cash.
My questions are: -what is safest to do with cash. I'm very risk adverse. I'd like to leave about $200K to put on down payment on home/pay off home if move to low cost of living area within next 5 years. The other cash ($123,000) is supposed to help bridge me until I take social security (hope to wait until age 67. I was spending down cash about $30,000 a year, but that included $14,000 a year I was spending on my daughter's college (which thankfully she only has one more year left).
I was taking $3500/month out of TSP. Ironically, the DAY BEFORE the market crashed big time, I upped the amount to $4200 as my federal pension I received unexpectedly decreased by $500/month....too complicated to explain why here.
And I'm not too worried that my kids will be a drain on me forever -- but I'd like to help them out as I had no help when I was their age and I would like to afford them some security at least for now....Our family life is now a lot calmer and more stable these last couple of years. I'd like to give them some peace.
I know the advice is "stay the course". I was only invested in TSP in L lifetime fund -- which is very conservative to begin with -- would it be foolish to lock in my losses and resort to the G fund? But I'm not 35 years old with another 30 years to make it back either. Still, I know inflation has to be considered, as well.
I'm not concerned with leaving my kids an overall "legacy" of money. I'm more concerned with the present and my future. Their father doesn't really help now -- but my kids will almost certainly be his heirs when he does pass (I know nothing is ever certain) , and they will benefit then from his hoarding of money.
Should I increase the amount I"m taking out of cash now and decrease the amount I take out of TSP to about $1,200?
Any other ideas besides "get a job"? Not really wise at this time, but have just started sending out my resume.
Thank you.
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phil5185
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Post by phil5185 on Mar 21, 2020 20:57:43 GMT -5
""But I'm not 35 years old with another 30 years to make it back either.""
You might be surprised - I retired at age 59, I'm age 81 now. My account has doubled more than twice since I quit working and stopping adding to it. Your $960,000 is likely to double or triple in the next 30 years.
The L-Fund is designed to continually adjust your account "stock/bond" ratio as your age increases. It will keep doing that in retirement, it will continually shift toward a safer ratio as you age. You say that you are risk averse - but it might be best to stay with L, that's what built the $960k for you. As you say, you need some risk to offset inflation. A fully "safe' fund merely tracks inflation, the buying power of your money doesn't grow.
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mary2029
Familiar Member
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Post by mary2029 on Mar 21, 2020 21:29:44 GMT -5
I would look into spousal support payments from social security. I think you are too young to get them now, but you can start the research.
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Gardening Grandma
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Post by Gardening Grandma on Mar 21, 2020 23:14:53 GMT -5
My first piece of advise is to ignore Phil. He’ll you you’ll get 11% in the market.
Second piece of advice is to respect your risk tolerance. I’d put the cash portion into a 5 year CD ladder and wait.
Being able to sleep at night is priceless
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gacpa
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Post by gacpa on Mar 22, 2020 11:10:21 GMT -5
We are pretty much in the same boat as you. Hubs decided he was done working and retired at the end of the year from federal civil service at the ripe old age of 58. Toxic work environment also. I am still working in public accounting, a toxic work environment is all I have ever known so I just plod along. He is withdrawing a small amount from his TSP because I wanted to grow, but instead now it has crashed and burned. He is in the G fund, F fund and C fund. Mostly G and F. Our investments have tanked, but we have a good cash cushion. I just hope companies are not forced to cut dividends to shareholders. That will really cause problems.
I wish I had some advice for you. It seems you are in decent shape, maybe just stay the course? A CD ladder is a good idea as GG mentioned above.
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Lizard Queen
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Post by Lizard Queen on Mar 22, 2020 11:23:32 GMT -5
I think you should stay the course with the TSP. You have plenty of cash right now, a decent pension, and still a good balance in there even if the market drops by 50%. I know this is all very worrying, but you really are in good shape.
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countrygirl2
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Post by countrygirl2 on Mar 22, 2020 11:28:09 GMT -5
I wouldn't take much action right now. Likely just hold the course for a bit. Everything is in flux so not sure what is going to happen.
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busymom
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Post by busymom on Mar 22, 2020 11:42:57 GMT -5
I'm no financial planner, I just handle the finances & bills for my family. That being said, I'd pulled my money out of the stock market before the crash, and have no regrets. The money you need to buy your house I'd put in CD's, or something equally safe, but keep in mind if you suddenly decide a house looks good, & decide to raid your CD's early, your bank could keep all of the accrued interest. So, if you're actively looking for a house now, keep it in cash you can easily get to. It's obvious you love your kids, but don't be spending money on them that you may need in retirement. They might not appreciate you moving in with them in your old age once the money is gone.
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countrygirl2
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Post by countrygirl2 on Mar 22, 2020 14:01:21 GMT -5
I talked to son, down $150k now out of $500k. I agree with him, no point in walking away now. I just hope those companies don't start going bankrupt. He said he is back where he was when trump came in. Gave all gains back.
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ajmom
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Post by ajmom on Mar 22, 2020 17:34:44 GMT -5
Thanks to all who responded. I realize I am probably in better shape than some or most, so I hope I didn't offend anyone. Thank you for your kind replies.
Busymom -- you are so right on the kids maybe not appreciating me moving in with them! I will keep that in mind. Take care everyone.
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brdsl
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Post by brdsl on Mar 22, 2020 18:44:41 GMT -5
I would think 3k net in a low cost living area would easily support you for the rest of your days. Rents around here are 700-1k per month, give you 2k to save or spend each month.
I would move to the lower cost living area, and call it a retirement. After moving to the low cost area, assess your spending, put 2 years worth in laddered CD's, and the rest in the market. Conservative portfolio 60/40 maybe? Also, I would remove the "taking money out of TSP" or lower it to the amount you need....
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