If you missed the so-called Great Recession (Dec. 2007 to June 2009) because you were too young to know or care what a TSP was, it’s your turn! Welcome to the new updated version of Hard Times. It was 18-months of horror show for some people. The S&P 500 (your C fund) fell 57%. And there were not-so-great recessions before that. They happen.
The trick for many people — like federal and military folks who are building their own retirement nest eggs — is not to panic. Easier said than done when your regular 401(k) or TSP statements drop quarter after quarter, even though you are putting a chunk of your paycheck in it each week. With a match from Uncle Sam.
Many investors saw then, and see now, an opportunity as the stock market drops and Elon Musk has second thoughts about buying Twitter. Many continued to buy stocks via the C, S and I funds. Or through target date funds. Most made out like bandits when the market came roaring back big time until, well, until now. Turns out they bought low, when stocks were in effect on sale.
But investing for retirement is like conducting a real fire drill. They go much smoother when there is no heat. Once the world economy hits obstacles — Ukraine, oil shortages, record high gas price, and a pandemic that won’t go away — it is tougher to see the light at the end of the investing tunnel as anything other than a fast-moving train.
The market downturn also hits at an interesting time, when the largest bloc of investors in the nation — the six million active and retired investors — is getting the option to go from 15 to more than 5,000 fund choices, with fees they’ve never had to deal with before. Many financial planners have ideas to help their clients cope with bad times, like now. Especially if they get worse before they get better.
So my guest today is financial planner Arthur Stein, who helped clients weather the last bear market. And in several cases, not only survive, but actually thrive to become self-made TSP millionaires. The show start at 10 a.m. EDT. It will be streaming on FederalNewsNetwork.com or you can listen live in the D.C.-Baltimore area at 1500 AM.