Here’s an interesting retirement case study for you.
Let’s take a former active duty veteran who resigns after 7 years of service and enters the civilian workforce in the year 2000. This purely hypothetical employee in turn contributes to a Defined Contribution plan (401k or TSP) during his years as a working stiff. He or she contributes to the maximum ‘match’ amount of the employer’s plan- That is, when the employer matches up to 50% of contributions on up to 10% of salary, he contributes 10%. When he is a Federal Employee, he contributes 5% to get the most of the TSP automatic and matching contributions (5% of salary). (Stop me if you’ve figured out who the hypothetical employee is by now).
Maxing your 401(k) or TSP will help you get to this Happy Place faster…
There’s a lot of debate about how much you should put in to your TSP or 401(k) plan every year, and whether you should ‘front-end’ load your 401(k) at the beginning of the year, dollar cost average during the year, or back-end load your 401(k) at the end of the year for tax planning.
Here’s a 401(k) hack that works for me at the end of every calendar year.
My Lending Club investment returns have been taking a beating lately. Even with a spread of more than 1400 loans across multiple grades, I’m getting burned with -0.3% Annualized Return.
This account funded in the Spring of 2015, so the loans are in their at their 30 month point, a ‘danger zone’ when Lending Club reports most defaults take place.
This account has followed all of the recommended investing ‘rules’ on the Lending Club website – Buy more than 800 loans, spread out your credit risks, etc. After following the Lending Club guidance, all I can state is that the performance is rather unnerving, minus 0.3% Annualized Return: Continue reading
The following is a summary of points I found in ‘The Hedge Fund Mirage‘ by Simon Lack. Simon spent an entire career on Wall Street as a trader or providing ‘Seed Funding’ to Hedge Fund managers. The goal of his book is to inform investors and provide some transparency to the Hedge Fund Industry.
Feds and Vets, thank yourself that the TSP prevents you from stepping in these Hedge Fund land mines below: