Your Turn

Financial adviser suggests delaying retirement amid current economic uncertainty

If you had $105,000 in your Thrift Savings Plan (TSP) on Valentine’s Day 2020, by St. Patrick’s Day it had dropped some $20,000, to about $85,000.

Peter Musurlian@PMusurlianWFED

March 18, 2020 4:16 pm

2 min read

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If you had $105,000 in your Thrift Savings Plan (TSP) on Valentine’s Day 2020, by St. Patrick’s Day it had dropped some $20,000, to about $85,000.

Arthur Stein, a D.C. area certified financial planner, said on Your Turn with Mike Causey that no one knows the full impact the coronavirus crisis will have on the United States.

“We’re in an unprecedented situation,” Stein said. “We’ve never had this kind of lockdown of the economy before, not even in wartime. And nobody knows what the future will bring, how long it will take to get out of this and get a vaccine or to see the coronavirus, at least, lessen in terms of its impact.”

Stein spelled out what many TSP stock-fund investors are feeling: “the past few weeks have been a real disaster.”

“You have to keep a perspective about long- and short-term investing, because it’s such a scary time,” he said. “In 2008, during the Great Recession, that was a really scary time, too, because then we were looking at major financial institutions going out of business and the chance that the financial system might collapse.”

But as bad as it seems now, Stein said, “There’s never been a better time to be a federal employee or federal retiree, because your money is guaranteed and you don’t have to worry about it.”

Among many suggestions, Stein strongly advised people in the federal workforce to stay in their jobs.

“If you’re an employee and you were thinking about retiring this year, maybe you should postpone that decision until the market comes back, because the last thing you would want to do is to retire and have to start selling off investments when they’re down,” Stein said.

Because everyone is staying cloistered and not spending money on restaurants, entertainment, shopping, and vacations, “right now,” Stein said, “is a chance to save a lot of money, pay off debt and build up an emergency fund, without reducing your TSP contribution.”