Expert: Paul Henneman - 9/11/2008

Question
RE:  TSP
I will be turning 70 1/2 in two years where should I put my money?

Answer
Audrey,
   Thank you for your question! Unfortunately the question is broad, and likely has very different answers according to what kind of person you are and your circumstances.
    The first thing to do is to evaluation how much money you actually have. What is your total net worth, and how much is available for investments?
    The second thing to determine is to create a monthly budget that will enable you to live how you would like going forward. This will allow you to figure out how much return on your investment you will need on average each year to meet your living expenses (assuming you are retired).
    If you continue to work and add income to your investments, then this would have to be figured in as well. Eventually you will I am sure like to stop working, so all of this has to be figured in.

Hopefully you have enough saved and invested that you will only need a smaller return each year to meet your expected living expenses. Then you can work with fixed income and safer investments. If your savings and investments is smaller, then you may need to take on some more volatile and riskier, but higher return investments to meet your goals.  Do not forget to figure in social security into your income each year, as that can offset some expenses.

I hope that the above helps gets you started thinking about this. Please do not hesitate to follow up with me regarding some of these specifics, and perhaps we can work through it a bit more completely.

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com