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Subject:  Re: TSP Retirement Investment Date:  1/26/2005  6:23 PM
Author:  bogwan Number:  44205 of 88081

An interesting 'theoretical' question:

Should a US gov. employee invest in US gov bonds?

1) If the the US gov was a private corp I would say no. The credit rating of the company and the security of the employee pay is too correlated. Employees should not invest in their own company's securities unless they are given a special discount or they are complelled to as part of a scheme to motivate employees.

2) The value of US gov employees salaries and pensions are inversly correlated to US gov bonds. This is because the less US gov employees are paid the better US gov bonds are as an investment since it means the US gov is taking less capital away from the private sector.

I frankly have no answer.

I think that the stock and international options make the most sense as you will win either through your government pension, or if the 'Argentina' scenario occurs your pension will be disappointing but your investments will work out better.

You may be surprised at what it would cost to purchase an annuity that pays what your pension does. You may already have hundreds of thousands of US$s invested in US bonds.

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