May 18

Coffee With Mike- Demystifying Social Security and TSP

Social Security, TSP

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There are times where I'm talking to someone about the best use of their benefits and there comes up to the question, 'Is it better for me to use my TSP account while I'm in my 60s and wait to file for Social Security when I'm at 70, when it's at its greatest amount of money? Or should I start using my Social Security now so that my TSP and my investments have more time to grow, and can really have more time to overcome anything that any negative market that might occur in my 60s?" What's really the best thing to do? 

The way that that question is actually phrased, it's like, 'Well, who can tell the future?' No one is going to know what was actually the best thing to do, so really what we're asking about is what makes you feel more comfortable? What makes you feel more comfortable?

Some people are like, 'the more guaranteed money that I have coming into my bank account every single month, the better I'm going to feel. Therefore I want to file for my guaranteed money, including my Social Security, as soon as possible because it just makes me feel better.' 

On the other hand, there are people who say, "You know I'd like guaranteed money, but I think the guaranteed money is more important in my later years." Maybe I'm going to need more medical assistance. Maybe I'm going to need some long-term care assistance, and I'm going to use that higher amount that I would get from Social Security by waiting at age 70 to pay for those types of things. Now is the time for me to allow that to grow, and I'm going to use my TSP account now because I want that guaranteed money later, and I feel like there's enough flexibility in the way that I'm investing my money that I can safeguard what I want to spend, while at the same time invest for the future. 

"No one is going to know what was actually the best thing to do, so really what we're asking about is what makes you feel more comfortable?"

There's a little bit of difference about what you should do, and why you should do it. Again, it's like, 'what makes you feel most comfortable?' There are always financially astute things to do, but unfortunately, those financially astute things don't necessarily fit into our lives as neatly as we want them to be; want them to fit.

What we want to be able to do is just really think about, how can we get to where we want to go with the least amount of risk as it pertains to us, as it pertains to each individual person, because that's really what we're trying to do. We're trying to live with peace of mind. We're trying to live with the idea that we're doing the best we can do, to get where we want to go with what we have, and use that in the best ways possible. Because of that, this is an individual question and it needs an individual answer.

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