Re: Be Smart...

My thoughts completely. My husband and I both feel insurance is the biggest legal gambling scam and have invested earnings wisely to our benefit, not the stockholders.

Re: Be Smart...

Your comment on annuities vs. other investment vehicles is correct. More elaboration on this point - Annuities (especially private sector ones which are generally sold by Insurance Companies) have much higher expenses than mutual fund vehicles that invest in the same thing(in other words you pay more fees without getting more investment performance). Another problem - most annuities carry a penalty if you decide to get out of them (typically 5-7 years). Therefore, if you find out it's not performing like it should you may not be able to get out of it with paying a high penalty. Another problem - annuity proceeds are taxed as regular income (up to 35%) while mutual fund proceeds are taxed as capital gains (max of 15%). The guaranteed annual income is often touted as a plus, but does anybody really think Ins. companies would sell an annuity without being able to make money on it? You can get more income from a fund based portfolio than you can putting the same $ into an annuity.

Re: Be Smart...

You buy car insurance while hoping you don't run into accidents, don't you? You buy house home insurance while hoping it doesn;t burn down or someone was injured on your property. It is no difference with life insurance, especially term life. It is protection against the loss of your income for your family in the event something happen to you. You would like to know that your family can pay off the mortgage and live in it instead of being forced to move out because your spouse cannot pay the bills. Of course, if you don't have a family........

Re: Be Smart...

True, everybody should have life insurance to cover the needs of them and their family..

If you will read HR Guys post you will see that the context he presents is that of an aging non earner - Retired and beyond working years which means they already have accumulated enough to cover their needs for life without a large life insurance policy and in most cases have no child dependents left in the home that would need to depend on the proceeds of a life insurance claim.

Re: Be Smart...

Insurance should be to cover expenses that come up that you can't afford to cover (i. e., catastrophic). Anything more is just lining the insurance companys' pockets at your expense. When I was young and we didn't have a lot of assets I made sure that if my family lost my income that our home would be paid for and there would be income available. Now I'm older, our house is paid for, I have a substantial investment in the TSP and my wife has a substantial investment in her retirement program and our daughter is out on her own, I have scaled back my life insurance by 2/3 (when the premiums ballooned when I turned 55) and plan to drop my elective coverage entirely next time my share of the premiums go up again.

Re: Question on the interest rate

You're talking about two different things. The 4.875% is what money will earn this year while IN the VCP. The $7 per $100 is what an annuity will pay when you've taken your money OUT of the VCP and purchased an annuity with it!

Re: CSRS compared to FERS

FERS was not a better deal for some CSRS employees and CSRS employees do not benefit from matching. In creating FERS, Congress significantly modified the existing defined benefit program by placing the onus on employees to determine how much they will contribute.
I fail to see how permitting CSRS employees to invest their own money in the plan without benefit of matching disadvantages any FERS participant.

Re: CSRS compared to FERS

I have almost $190,000 in my TSP and I am CSRS. Thank you for being jealous.

Re: CSRS compared to FERS

Senior Analyst, why should we be jealous? Without giving us context (such as how much longer you have to work, how much of a percentage of your retirement you expect your TSP plan to provide, etc.) your statement is meaningless.

Re: CSRS compared to FERS

I agree with the Recreation Planner, FS. I do not believe that CSRS employees should have the option to participate in TSP because they already have a substantial retirement egg. FERS employees have a three part system: 1) FERS is based on 0.08% of our salary; 2) TSP contributions, plus matching; and 3) Social Security (SS). CSRS retirement contributions (as much as $500 per pay period) are much greater that what is available to FERS (who can only contribute a small amount based on the percentage set up). FERS TSP matching was set up to provide FERS employees a leveling field for retirement. Why should CSRS employee have the benefit of large retirement contributions and a large TSP account? SS more than likely will not exist or will pay out essentially nothing to FERS employee either. . . I wonder how CSRS employee would feel if the rolls were reversed and the shoe was on the other foot . . .

Re: CSRS compared to FERS

Oh, puhleeezzzeee! You are forgetting that we CSRSers are not allowed to put money into an IRA with the contributions being made as tax deferments. This was because, like the private sector, we have a "tax qualified plan available at work". What would you FERSers have? A separate plan to replace the right to a tax-deferred IRA? Stop comparing us with you guys. The real comparision is with the private sector. They can have a 401(k) plan with their company contributing to it.

Re: CSRS compared to FERS

Because CSRS folks are investing THEIR dollars to TSP with nothing added from the government. It would be the same if they invested THEIR dollars anywhere else. Are you suggesting because they are CSRS they should not have the option to invest THEIR dollars in anywhere else? By the way, you have other opitons for investing your dollars also.

Re: CSRS compared to FERS

Da! Forest Service Employee and the other bone-head. Where do you think that the 0.08 percent goes. It goes toward the contribution that you are making to your CSRS component of your retirement. That is why you get 1-1.1% of the number of years that you contribute to the CSRS component. Therefore, you are getting a scaled back CSRS retirement. It would be nice if all of you whiners would shut your mouths. You get the big golden government matching that is not available to CSRS. I guess that you are just greedy and want everything.

Re: Additional Investment Opportunity

An excellent place for CSRS civil servants close to retirement to invest short term? How so? The money is locked into a retirement instrument - it's not generally coming back to pocket if withdrawn. The refund options are essentially to buy an annuity or roll over into an IRA...neither a short term investment. The earnings while invested in VCP are not IMO particularly attractive, either. Anytime you surrender control of your money, it's too high a price to pay.

Re: Additional Investment Opportunity

Maybe the program analyst should leave the government and the FERS program. CSRS employees also have no control over how much is taken out of their paychecks it can't be increased or decreased. As for the shoe being on the other foot, sounds like sour grapes to me. Who talked you into dropping out of CSRS?