My plan (federal employee)

1) There's quite a few red flags that make me worry that you don't have a full handle on your money situation. Your TSP balance and contribution rates are both very low and I would recommend dramatically increasing your contribution to as close to the $18.5k max as you can (for you, that would be about 12.5%). Do you have any savings outside of the TSP? If your net worth basically consists of $110k in the TSP + $20k in emergency funds, then that means you're going to be relying almost exclusively on federal benefits in one way or another in retirement, which is a precarious place to be.

I know your current projections show that you'll be fine, mostly because of the pension. But that pension has been a target for cuts lately - currently, there are proposals to move to a high-five system, eliminate all pension COLAs, eliminate the FERS supplement, and having the federal government paying a fixed amount towards FEHB instead of a percentage (so your costs will increase faster due to inflation). Would you still be ok if federal retirement and health benefits were cut by 10%? What if they were cut by 20%, and Social Security/Medicare were also both trimmed by 15%? I don't mean to sound alarmist like the folks who say you shouldn't count on any federal benefits at all, but prudent planning would dictate that you plan for a reasonable degree of cuts.

2) It depends on what you mean by "travel and fun" and how important this really is to you. That's about half your income that you're voluntarily giving up to what you consider non-essentials - is that spending on stuff that gives your life meaning and fulfillment, and gives peace to your soul? If so, then it probably is worth it. If it's, "YOLO I got money to burn so why not lol," then maybe you need to think about your priorities and if it's the best use of your resources.

3) Given that you admit that you aren't the best at long-term planning and saving, I would probably stick around for the near-guarantee of quality health insurance. It's a good deal, especially since it's not really all that far away and you don't have much savings to fall back on anyways.

4) Why are you bothering with CDs? I mean, maybe they'll become useful again over the next few years, but the return on them has been basically nonexistent for over a decade now.

/r/financialindependence Thread