SPEAKER_00 0:12

Tim and Joe back with you for another Postal Blue Book Help Slash Gateway FRC podcast. Today, you guys, we're excited because we are going to answer a bunch of questions that you guys had asked us from the previous podcast.

SPEAKER_01 0:29

Yep. Hey, we've we love it. We've got TikTok followers that are out there interacting with our podcast, these podcasts that you guys are watching. And a lot of people are putting some comments, some questions, uh, some statements, some people that aren't even federal employees that are commenting. But hey, we're gonna address a couple questions and statements here uh just to get some clarification on some of these items that you're seeing in our podcasts, uh, the previous podcast that we've talked about. TSP is a big subject, obviously. Uh, you know, your retirement savings uh that you want to take into retirement, maybe for an income stream, maybe for wealth accumulation, just kind of depends. There's been questions about Roth traditional matching. Uh, if I put it in the Roth, is it still gonna be able to be in the C fund, et cetera? So, what we're gonna do today is we're gonna address a couple uh of you, your followers here, uh, and and go through the questions or statements that they have and then give them a little feedback. Uh so Joe, I'll let you go ahead and start. It looks like we've got Paul Martin.

SPEAKER_00 1:27

Yeah, you know, you guys, before before we get into the actual questions that you guys had asked, I do want to make a comment. You guys ask a lot of questions online and and we don't reply a whole lot. And there's a couple reasons why we're not gonna, you know, constantly reply. First, we talk to, we have Tim and I, and we have 13 federal retirement consultants that are just like Tim and I that work in our office. So we field anywhere from 30 or we talk to 30 to 50 federal employees a day uh answering questions. So, you know, just getting around to handling the social media and answering all your guys' questions is difficult for us just because of how busy we are.

SPEAKER_01 2:18

What's the best way that they, you know, if they have an actual question, how can they get a hold of one of our federal retirement consultants to get their specific question answered and have the time for them to have one-on-one talk?

SPEAKER_00 2:31

Yeah. I mean, you know, you go to, you know, if you're a regular federal employee, a non-postal federal employee, you go to gatewayfrc.com. Uh if you're a postal employee, you go to postalbluebookhelp.com. And there's, you know, there's there's sections on our website where you guys can can fill out forms and ask questions. Yeah.

SPEAKER_01 2:52

A lot of resources out there. You know, they can fill out that form. One of our federal retirement consultants will reach out to them within 24 hours. Uh, there are also a good resources tab out there that there are some resources that you can do some of your own due diligence and and get some of your questions asked. But again, working with one of our federal retirement consultants is key, no cost, and we're experts in all of your benefits. Right.

SPEAKER_00 3:14

So we'll get into some of these questions now. Uh, you know, we had to kind of hand pick a few of them. Uh there were a lot of them on there. Now, what we find is, and which is great because it opens up dialogue, is somebody will ask a question and then another federal employee will come in and answer it. Now, I'm not saying that all of their answers are correct. Right. Uh, but you know, it's good to have an open forum with other federal employees, our postal employees, uh, to answer questions for you guys. So we're we're glad to be able to make that happen. Yep. But, you know, the first question was from Paul Martin, and he has a traditional TSP, has traditional TSP, but has 12 years left to work. Should I stop contributing to the traditional and put future contributions in Roth? It's a great question.

SPEAKER_01 4:06

You know, depending on your financial situation, Paul, you know, putting it in the Roth TSP, I'm a big advocate of great opportunity. However, that does lower your net take home pay, right? Because you're paying the taxes on that contribution right now on your paycheck. Okay. And then that money is growing tax free and comes out tax-free. But it does affect your net take-home pay every two weeks. Uh, so calculation-wise, we want to do a little bit of math. Uh, again, our federal retirement consultants can help you with that, figure out whether or not that makes sense for you. Um, but it grows tax-free and comes out tax-free, which is great.

SPEAKER_00 4:46

And we always like to say, you know, would you rather pay the taxes on the seed or the harvest? No, we all know the answer to that one. Right. I mean, we'd we'd obviously rather pay the taxes on the seed. Sure. Uh, you know, you don't want to pay the taxes later if you can financially afford it. There is nothing wrong with the traditional side of the thrift savings part.

SPEAKER_01 5:08

Right. Right.

SPEAKER_00 5:09

But if you can financially afford to put the money in on the Roth side, it makes a lot of sense.

SPEAKER_01 5:14

Yep. And that kind of rolls into uh um uh extension of this question from Paul is you know, what do I do with what I have in the TSP right now? Do I move that from the traditional to the Roth? Favorite answer is it depends. Right. Number one, you have to have the money to pay the taxes outside of the TSP. You can't roll it in from the TSP into the Roth side of the TSP and have them take the taxes out.

SPEAKER_00 5:42

Give an example of that. Yeah, you got $100,000 in your thrift and it's in the traditional side, and you want to roll it over to the Roth. A lot of people call us and say, well, they'll just take, you know, let's say it's 30%, they're gonna tax you. Well, okay, they can just put $70,000 in the in the Raw side and they can take the $30,000 and pay the taxes. You have to have that cash on hand. Right. So, you guys, you know, make sure if you want to do something like that, understand that it's coming out of your pocket. You can't just take it out of your thrift.

SPEAKER_01 6:17

Right. And you can do these conversions in smaller increments. You don't have to convert a large chunk to Joe's example, $100,000 right away. You can do $10,000 a year or $20,000 a year to minimize the tax if you want then that money to grow for the next 10 or 15 years tax-free and know that it's going to come out tax-free.

SPEAKER_00 6:38

When's the best time to do it? You know, Tim says it, well, it depends. I mean, if you're 30, early 40s, it makes a lot of sense to probably convert if you can financially afford to do it. Yeah. Uh, you start getting into your 50s, it still might make sense for you. But until we know your financial situation, we can't paint a picture for you guys in a broad sense. Right. Because every situation is a little bit different.

SPEAKER_01 7:07

Yep. Yep. So great. Hey, Paul, great question. We appreciate the comment. Uh, we're gonna move on to uh AWOL74 asked, you know, what about those who are 50, over 50, but they're just starting in the TSP. Maybe they were either a late starter in the TSP or they just recently started working for the federal government. So they're now trying to figure out what to do with their TSP. You know, what should I invest in? Was his question. Yep. You know, we'd recommend uh you be aggressive. If you're if you're starting late in life or starting just now with the TSP, you got to try to get it to move forward fast. Right. Right. And so we would recommend some type of allocation in the CSI funds or maybe one of the later target date funds that's more heavily in equities as opposed to fixed income or bonds like the G fund. You still want to have a little bit of money in the G fund. But again, everybody's situation is different. We can't specify exact percentages of what we would recommend. But if you're somebody starting late, whether just getting into the TSP or you've been working for the federal government and you're just now getting ramped up in the TSP, give us a call. Go to our website, gatewayfrc.com or postalbluebookhelp.com. One of our federal retirement consultants will sit down with you and talk and discuss what your overall financial picture looks like now and determine your time horizon as well, because that has a big thing to do with it as well, Joe.

SPEAKER_00 8:34

Of course. Uh moving on to the next question. Dad asked, uh D A D, uh, that's his username, stated uh that assuming you put 10% of your pay in the Roth, you will be nowhere near a millionaire. Uh so Tim, I'll I'll let you answer that. But I think first off, we have to look at the math here, right? You do. Okay. Yep. So and it depends on your salary. So when Tim and I saw this question, you know, so it varies, right? But we're gonna base it off a $50,000 salary, and I'll let you take it from there.

SPEAKER_01 9:07

You know, so if you make $50,000 a year and you put in 10% per dad's question here, so $5,000 a year, plus you're getting the match of 5%. So you're putting in about $7,500 a year. Let's just say an annual growth rate of $11% compounded annually, you'd have about $1.9 million when you go to retire.

SPEAKER_00 9:29

So that would be, though, on the traditional side, right? I mean, $50, $50,000 salary, you're putting in 10%. Uh, you'd have about $1.9 million. Right. So even if we looked at it from the Roth side, paying the taxes, you're gonna put it be putting in a little bit less. Sure. Uh, you're still gonna have over a million dollars on the Roth side as well.

SPEAKER_01 9:53

Absolutely. You know, and again, the the growth then is tax-free if you're putting it in the Roth and it comes out tax-free, which means when you go to retire, you're gonna have that seven figure, that million plus dollars of money that whenever you take it out to do whatever, go buy a vacation home, buy a yacht, buy a plane, whatever you decide to do, you're not gonna pay taxes on that money.

SPEAKER_00 10:14

So I think that the next thing that people are probably gonna second guess uh us is the 11%. Sure. So, you guys, what we did, these are actual numbers from 1995 to today's date, the S P 500 or the C fund has learned earned over 11%. So we want to use actual numbers when we're giving you guys these answers. Right. But dad, just to answer your question, uh you would have over a million dollars putting it in on the Roth side if you were putting 10% of your $50,000 salary in. Right. Now understand the 5% match is going to the traditional the traditional side. They're not gonna pay taxes. So you're gonna have still have 10% your money is going in the Ross side, and then their 5% match is gonna go in the traditional side.

SPEAKER_01 11:09

Yeah, I mean, unfortunately, Uncle Sam doesn't allow you to get free money and not pay taxes on it. Right. So you're gonna have two buckets of money when you retire a tax-deferred bucket that you'll pay tax on eventually when you pull money out, and a tax-free bucket. That's a good mix of retirement assets to have and will help you live a comfortable retirement. We've been seeing a lot of what we call TSP millionaires lately. Yep. A lot of those people that, you know, um have stayed in the C S and I funds, the S P 500, the Dow Jones, and some international exposure, those are great. However, right now, if you are on the doorstep of retirement amidst all the uh everything that's going on in the world today, all the different things that are affecting the economy and the market, you want to start talking about downside protection. You want to start talking about pulling back from that equity exposure, especially if you don't have time on your side.

SPEAKER_00 12:02

Absolutely. Yep. Yep. Okay, where are we at here? General statement. Oh, this this is uh this is Tim and I's favorite. And we understand why this question gets asked, but these guys, and and this is just a general statement that we see a lot on our our different podcasts, the comments. These guys want to get your TSP money. Uh, I'll let you answer and then I'll I'll throw in my two cents as well.

SPEAKER_01 12:35

Sure. You know, so we are financial advisors, we are educators first. So our first goal, first and foremost, is to educate you about all your retirement options, right? Make sure that you understand what your TSP options are. You have four options with your TSP, right? One of those options, and the most common that we see after having conversation with people is they want to roll it over into an outside IRA. Get it away from the TSP because outside of the federal government TSP plan, there are a lot of other options out there. A lot of different ways to invest, a lot of different uh um investment accounts. There's a lot of different solutions out there, right? Do we receive compensation when we do that? Yes. Is that compensation from our client? No. So we are non-fee-based fiduciaries, so we do not charge fees. Traditionally, most financial advisors that are managing your money are charging one to one and a half percent. We chose our model for our business is to let the companies that we roll the money over to, they compensate us, and it does not affect what you roll over, does not affect any of that money at all. But of course, Joe, we want to get paid for what we do. We work hard, we help people every single day. Just like all the people that are watching this, you get paid for what you do when you go into work. Whether you're a mail carrier, a clerk, or you're a federal employee at the VA helping out one of our veterans, you get paid for what you do. We want to get paid for what we do. Absolutely. And so we get compensated by the companies we work and are contracted with.

SPEAKER_00 14:08

And just, you know, so you guys know, on average, our 15 people that work in our office, Tim and I and our 13 other federal retirement consultants. 70% of the people that we talk to, that we educate on federal benefits are under the age of 59 and a half. So, you know, of course, you know, Tim and I need to feed our family, and our federal retirement consultants do as well. We're financial advisors. So, yes, we do help people with their retirement planning when they're at 59 and a half, but we also help everybody else. Sure. From the people that are just starting in their 20s, people in their 30s, people in their 40s that are getting later in their career. So we're building financial plans uh, you know, to set them in the right spot moving forward into retirement.

SPEAKER_01 15:03

Right. And to that point, Joe, about even the the younger people that aren't retiring right now, we're helping them get their financial household, their financial blueprint together so that when they do go to retire in 20, 15 years, whatever it might be, when they're 59 and a half or older, they have been set up and they have been educated early on in their career on ways to invest in the TSP, on things like their life insurance, their fegley life insurance, on things like their FEHB or PSHB from a postal standpoint for their health benefits, on things like their pension, on survivor benefits and things like that. So we're educating. There are many times when we have a conversation, and you guys can go out to both of our websites and read the reviews of what people have said on how we really have helped them and educated them on all their benefits. We get nothing out of that other than pure pride and satisfaction that we've educated those people and that the hope is when they do go to retire, who are they gonna think of? Us. They're gonna think of us, they're gonna save our number in their phone and they're gonna give us a call, and we're gonna already have that relationship and we're gonna help them with retirement.

SPEAKER_00 16:11

Absolutely. So, you guys, we we just wanted to answer that question because there's a lot of people, and we're not I'm not gonna call them haters. Sure. Uh, but that this is what we do for a living. Right. And we really have a niche market with you guys uh that you know, we've educated and have studied the federal benefits for a really, really long time to get that R or FRC designation. Sure. Uh and you know, we care about federal employees and and you know how you guys are going to be moving forward into retirement. So we wanted to, you know, answer that question and or that statement, talk about that statement and get it out of the way.

SPEAKER_01 16:54

Yeah. Absolutely. And, you know, we've helped agencies, we've done retirement webinars and seminars for the TSA, for postal employees. We we do webinars online, we do online appointments with our clients one-on-one. We do, we come to conventions for some of the Postal Service uh uh areas. And, you know, we're just here to help people understand those benefits.

SPEAKER_00 17:16

Yeah, and you guys keep firing the questions, uh, you know, on the on the different podcasts, on all the different platforms that we're on. We do read them. I don't want you guys to think that we don't read them just because we don't answer them. We love to see, you know, everybody, like I mentioned earlier, uh, going back and forth inside of those different uh forums that that we've created from the podcast. So, you know, keep firing the questions. Tim and I will keep answering them. And if you guys really want to talk to us one-on-one, rather than just asking us questions, obviously go ahead to one of the websites. Uh, that would be Gateway FRC or Postal Blue Book Help and fill out one of the forms. Yeah.

SPEAKER_01 18:00

Yeah, absolutely. And, you know, we do get some comments from other financial advisors and shout out to all the financial advisors who are out there helping people. We really, you know, we're all in the same boat. We're all here making a living. We're not down putting anybody down that's a financial advisor that may charge fees. And hats off to all of our clients that have used a financial advisor. One thing to keep in mind though, most of your financial advisors that you may have been working with are not federal retirement consultants, meaning they don't have all the education for all of your federal benefits. So, hey, we can all work together. We can all play in the sandbox together. It's okay to have multiple financial advisors, one that specializes in maybe one spouse's federal retirement, and then the other spouse is a private sector employee who has a federal, uh has a financial advisor, excuse me, that they use as well. We all are a team. We can work together. We work with your CPAs and everyone like that. So we can all work together, educate, make sure we have financial freedom when we retire. Yep.

SPEAKER_00 19:01

I think this was a great, great podcast. That's great. I agree.

SPEAKER_01 19:04

Hopefully we get some good likes and comments and positive comments. And hopefully we're able to talk to some of you guys if you reach out, either on our website or through one of these forums on social media. Uh, I'm Tim Nolan. This is Joe CUNY. We're Gateway Federal Retirement Consultants and Postal Blue Book Help. Check us out. We're here to help you.