50-something me would like to thank 30-something me

Though it’s never too late to make changes in our lives, there are some things we do (or don’t do) when younger that will have consequences for our future selves. (Whew, deep thoughts.) In the case of investing money, those consequences are compounded, literally.

Cleaning out my folders as I prepared to leave my federal job last year, I came upon this legal size paper:

Yeah, you have to squint.  I have tiny handwriting. 

Anyway, these numbers look to be from 2005 or 2006.  The Bush II administration!   

The meaning of some of my decades ago scribblings is lost on me now, but on the top I am clearly projecting out federal GS scale salaries and savings for the next 8 years or so.¹ 

Most interestingly, in the bottom left are some of my past and projected government Thrift Savings Plan (TSP) contributions.  From this “historical document” it’s interesting to see that I did not “max out” my retirement contributions until 2007.  It appears I was at least contributing enough to get the full 5% agency match (smart!) but I guess I felt like maybe we didn’t have the budget to do more until a few years later.  

Nevertheless, my final TSP balance at retirement was more than I would have imagined back then. Nor is my experience unique for feds who pushed money into the TSP throughout their career. Nearly 3% of all participants are TSP millionaires. ²

I don’t recall thinking much about “what is my TSP going to be worth when I retire in the 2030s?”  It was too far off.  I don’t even recall monitoring my balances very closely although I know I looked at the year end account update mailed from TSP.

My TSP was just there and growing and I figured it’d be good to have it someday in the future.  It wasn’t until 2020, approaching 20 years of federal service and suddenly the reality of retirement starting to appear, that I remember thinking “wow, that TSP balance is turning into real money”. (I’m building a wealth snowball!)

I started paying more attention.

Little did I know, back in the early 2000s, that regularly contributing as much as I could, staying heavily in the TSP stock funds, especially the “C” fund, and benefiting from a long running bull market would gradually, then suddenly, push the balance so much higher.

Lessons learned. Like probably everyone else, I look back and think, ” Wow, if only I could have contributed even more 20-25 years ago, think how much higher my TSP could be now!” But just contributing something in early years, when times may be leaner, is an achievement. Looking back, I think we were doing as much as we could. That’s the most important thing.³

Which brings us to Lesson Two: time in market is better than timing the market. It sure is more realistic. Those long ago contributed dollars compound mightily through the years and can dwarf later contributions at the end of your career.

In other words, the smaller annual sums (I only put in $570 in 2001!) I contributed long ago, compounded over 25 years, are mightier today than the entire $32,500 employees over 50 like me could have contributed in 2025. In fact, once a TSP overall balance approaches $1M and beyond, a really good or bad day in the market (depending on your fund allocations) can change the TSP balance more than an entire years worth of payroll contributions.

Lesson Three, as I noted in my earlier FIRE post, is to reduce your expenses so that your extra dollars are first going to maxing out your retirement contributions before other things. The savings you enjoy from buying a used car or smaller home can be invested and then compound over the years.

The financial projections I did on that old piece of legal sized paper weren’t necessarily accurate. But I would say accuracy in this case doesn’t matter as much. Just that I was doing them at all (even if I was doing them while sitting against the wall in a staff meeting), and thinking about the still far off future was what mattered. I’d like to thank my 30 something year old self!

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1. It looks like I plugged in a 3.5% annual inflation rate for my GS scale salary predictions.  The Great Recession of 2008-09 and a subsequent few years of very low (or no) inflation cut into my projection. Instead of $155K, a GS-15 step 6 salary ended up at just over $149K.  Close enough. ↩︎
2. There are probably over 200K TSP millionaires and that’s doesn’t count already retired folks who had over $1M in their TSP account but subsequently rolled out all or most of it to outside investment accounts. ↩︎
3. My “lessons learned” are not novel. It is pretty standard financial advice from many sources. Anyone who can avoid the temptations of get rich quick schemes or trying to time the market can do this and build wealth.
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