family money

This topic contains 1 reply, has 2 voices, and was last updated by  TS Paul 5 years, 10 months ago.

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  • #484

    Troy C

    I know that this will seem like a funny question, but both of my parents have a pretty good amount of money, so I have always sort of thought of that as my retirement account and haven’t paid much attention to contributing to my FERS. Would knowing that you had a lot of money coming your way change the way that you save or invest?

    #519

    TS Paul
    Keymaster

    I believe that that this may be what they are talking about when they refer to “first world problems.” 😉

    At the outset, assuming that you are under FERS if you are not contributing at least 5% to your TSP, you are throwing money away because you are not receiving your agency matching contributions. I would strongly encourage you to at least be doing that.

    I suppose to really answer your question correctly, I would have to know a lot more. How old are your parents now? And do they plan to start sharing some of their money with you while they are still around, or are you just counting on them going at a reasonable age?

    Your worst case scenario is that you don’t save anything for retirement and the day comes when you are ready to do nothing but play golf and go fishing, but your parents have inconveniently lived longer than you planned. The TSP has an excellent publication called Withdrawing Your TSP Account which details just how long they may stick around.

    Life Expectancy Chart

    Or one of them could become sick and your inheritance could be spent on treatments not covered by their insurance, or they could make a really bad investment, or they could join a cult and leave their fortune to the Raelian movement.

    So if I were in your shoes, unless the trust already exists and you get to start pulling money out at 50, I would prepare for my retirement as if I was going to receive nothing at any time when you might actually need it.

    The TSP Allocation Guide www.TSPallocation.com

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