[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Welcome to Reyna Retirement. Reyna Reyes has dedicated her career to helping people make smarter financial decisions. Raina Retirement is all about breaking down complex financial concepts into language you can actually understand.
Now here's the co founder of American Federal Benefits Consultants, Reina Reyes.
[00:00:40] Speaker B: There's coffee rhyming slang and they say bees and honey. They say, give me your bees and honey or hand over your bees and honey. What are they talking about? Money. Money rhymes with honey. So give me your bees or give me your bees and honey. They're talking about give me your money or pay for this thing that you just bought for me.
Well, you need to put your bees and honey into your tsp and you're going to do it every pay period.
That's pretty good because that's the bucket you're going to be filling for your own retirement. You're shoveling money in and the government's putting money in and it's a happy day. It's a nice symbiotic relationship. If you remember one of my other videos, it talks about that being the coffee because you're putting money in that's never been taxed. So you're the coffee and then they're matching you creamer and then you earn interest, sugar, and it all goes into your coffee cup. And then it's building, building, building. You stir it all up and it's all connected. And then before you can take a sip, who gets the first sip? Uncle Sam. Because it's never been taxed. But some people are saying, oh, you know, life was happening and I didn't contribute enough to tsp. Or I decided, you know, never to look at that ever. And I've only been contributing 3%.
Well, let's talk about that.
What's the minimum we should be contributing into tsp? 5. 5, 5, 5, 5. 5. 5, 55 is like a magical number. If, if you've ever heard of the concept of numerology, it's in lots of history, it's in the Bible, it's in all kinds of books, it's in Shakespeare. Numbers mean something. And the number five in the government is very specific. It's interwoven all throughout the government retirement. 5% is your magical number. You never want to contribute less than 5%. Into your TSP. So how do I contribute into my pension? Well, you remember you are the coffee carafe. You've got to tell your human resources what they're going to take out of your paycheck, every paycheck, pay period, and they're going to deduct it out of what you're going to get paid and they're going to redirect it into your coffee cup. It's going to go over to TSP and be in your
[email protected] so you can do this. Like if you're postal, you would go into postal ease login. It's on the right hand side tsp. You can pick your contributions whether it's a dollar amount, like a flat dollar or a percentage. If you're trying to do the minimum, I'm telling you do a percentage. Because why, Randy, why would you say that? Why would you tell me to do a percentage if I'm going to do the minimum? Because if you get a raise and you had a dollar amount that was 5% that day, the moment you get a raise, it is no longer 5%. So if you're going to do the minimum, you put that percentage in and you let her ride. But here's the deal. Every time you get a raise, don't take it. Redirect that interest, that not interest, redirect that higher money, that higher amount of money into your tsp.
So your, your, you know, level of living doesn't really change. You just save more money. And you keep doing this every time you get a raise.
I'm telling you, this is how big balances are made now. Maybe go up a couple of percentages. You can change it if it gets uncomfortable, but I would rather you get a little uncomfortable while you're making your full salary than retire and remain uncomfortable for the rest of your life. And that's some of the things I try to help people with. So if you're postal, postal lease, if you're a federal, it could be my pay, it could be the GRB platform, it could be my navigator. It just depends on your agency and where that is. But I'm telling you, get accustomed to that method so you know where you're going, what to do. So you can easily edit the way you're making your contributions.
So then, okay, where's this money coming from? What happens automatically? Well, there is an automatic 1%. The government is simply putting in 1% whether you contribute or not. So we had somebody said, oh no, I don't do that. I don't have a tsp. I'm like, why don't we just log in and see what you got? What's going on? I don't have one. I don't have one. What we logged in and they were sitting on like 80 grand because they'd been there for 30 something years and, you know, turns out they had been contributing for a while in addition to the automatic 1% contribution from the government. So it's automatic 1% whether you care or not, whether you believe in it or not. There's your money. It is what it is. So what should you be putting in? Well, I already told you, you should be putting 5%. As long as you put in 5%, what's the government going to do? They're going to match that 5%. Five for five, right? I got five on it. So you're going to be putting five on your TSP and adding that into the program.
So it's not exact, exact, exact with this 5 and 5. I mean, it is, but people say, what if I put three? What are they going to do? Listen, who cares? Put in five, it doesn't matter. I had a teacher tell me, raina, you can't see the trees for the forest because I'm the opposite of this overly detailed scenario in my mind. I paraphrase, okay, I get the point. And let other people's hindsight be your foresight. They're telling, my teacher's telling me that I need to do this. And I get the point. And so who cares, right?
Who cares about the dollar for dollar? But for those of you who do care and want to know exactly how everything works and you take the clock apart to put it back together again, I got a little spreadsheet for you.
So, you know, look at this. And that's why. But the ultimate bottom right hand side, you put in five, they put in five. And can you put in more than five? Absolutely. You can put in 10, you can put in 20. Potentially, it depends on what your income is. There is no maximum percentage, but there is a maximum dollar amount this year, 20, 26, if you're doing catch up, it's like 32,500. If you're not, it's 24,500. Plus the eight that, you know, 8,000 or 8,500, who cares? Check it out, look at it. Because it depends on where you are in the year. And if you're going to start at the beginning of the year to do 26, pay periods of this dollar amount. But that's the trick. If you're going to do the minimum? Absolutely do a percentage and never go below five.
Never go below five.
Never go below 5. Never go below 5.
Now if you're going to do the maximum, that's usually when we would do a dollar amount because you don't want to bust at the end of the year. You don't want to go over the amount that they're telling you is the maximum.
So it is good to make sure that whatever dollar amount you've done, either that it's over 5% and that it's also not going to be too much for your contribution. Now remember, those of you who are in the money and over $145,000 a year, say the 145 or 135, let's go with 145. But over that amount, if you're doing the catch up contributions, it's not going to be pre tax. They're going to, they're going to automatically put your catch up contributions into the Roth TSP section. And that happened just this year. It's starting this year. That's fine. A lot of people say that's great. I want to do Roth anyway because I make so much money. I cannot have a Roth IRA anyway outside.
So it's actually to your benefit. I'm a big fan of the Roth, but maybe you wanted that tax deduction. You can't get it. You can only get it up to that 24. Now there are certain special people, if you're, what is it, 60, 61, 2, 3 years old, you can contribute a higher catch up. It's like for, instead of 8, 500, it's like 11500 or 11,000, 2, 60, it's like double numbers. I can't remember exactly, but check it out. Get the point because it changes every year. If you're watching this in 2027 or 2028, then your number is going to be higher. Assuming that extra catch up is still around down the road. But Today it's another 11,000 and some change that you can contribute into your program with the goal of tax deferral. But again, tsp, they're saying if it's ketchup Shabam, it goes into the Roth section. And that's just is what it is. But like I said, a lot of people are stoked about that. They're like, that's awesome. I wanted a Roth anyway. Haha jokes on you, Uncle Sam. I'm happy about what you're doing and that's fine. Some people like dad gum. It I'm trying to lower my taxable income, and now they're putting it right back up again. But you still can get that maximum of the 24.
But everybody's different. Everybody has different salaries, different family situations. But remember, there will come a day that life will remain happening, but you will not be able to outwork it, because there will come a day for every federal and postal employee's life where you are now severed from service. You're retired, and you're on that fixed income. And that's one of the biggest things we talk about, because TSP itself, you're building this bucket of money. Build, build, build, build, build. And you, you build it all up. And you're waiting to just start taking out of this. You're in the accumulation phase. While you're working, accumulate it, build it up.
But in retirement, you sever the cord, and now it's distribution time. You may poke a hole in the bottom of there. Just depends on what we're trying to do and how the money shakes out. So you definitely want to be connected with a group who knows how to manage your income and see what your net income is as a baseline to determine whether or not you do need extra income on the regular, or if you need it for a temporary time of your life, or if you need it forever. Forever, ever, forever. And we have answers for all of that. Remember, we are a team of IRA specialists. We can help you with all kinds of things. We're not into losses, we're not into risky stuff, but we can help you with your money.
So reach out, get scheduled. My team and I are standing by.
People call, My goodness, what do they say?
Operators are standing by for your call. We're ready to text. You can text me, you can email. There's link trees all over town. I'm on TikTok, I'm on Instagram, all over the place. So you can reach out and get connected with us. And we just might be doing a workshop in your area. We would be coming to a town near you, so you've got people who know what they're talking about. And I hope it comes across that we actually like what we do as well. So reach out 850-45-0650 and we'll get scheduled to talk with you about what your money's gonna look like and how much else we need and how well are you building. We'll talk to you soon.
[00:10:29] Speaker A: Thanks for listening to Reyna. Retirement. With a strong commitment to ethical standards, Reyna works hard to find the right solution. For each individual or family who reaches out for advice. To contact rena directly, call 850-450-6500. That's 850-450-6500 or to reach the team and American Federal Benefits Consultants, call 1-800-872-8857. That's 1-800-872- 8857. You can also go online to americanfederal.org not affiliated with the United States Government. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the to the accuracy of any statement. The information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. American Federal Benefits Consultants is an independent organization, not a government agency or affiliated with the Federal Government or any state government. The terms CSRs, FERs, FELI, and FEHB are all registered trademarks of the U.S. office of Personnel Management. American Federal Benefits Consultants, Agents, Consultants, or any independent independent contractors do not provide tax, legal or investment advice and do not engage in the solicitation or sale of securities. Consult with your tax advisor or attorney regarding specific situations.
