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Thrift Savings Plan

lrh17lrh17
100 Comments
in Military Brides
Does anyone contribute to a TSP?  We are trying to figure out the best way for H to start saving for retirement (I'll have something through my employer once I start working full time).  He would not get matching contirbutions for the TSP, so I'm wondering if there are even any advantages to using that instead of a traditional or roth IRA.


 As of right now, the plan is for him to stay in the Army for 4-5 years, then work a civilian job.  That's another reason I'm thinking an IRA would be better b/c he would not be able to contribute after leaving the military.  Anyone have any insights?  I know there are differences in maximum contributions and how they are taxed, but right now there really isn't an obvious choice to me.  Thanks in advance!
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Re: Thrift Savings Plan

  • calindicalindi member
    5000 Comments Second Anniversary Combo Breaker
    Call up USAA - they'll do retirement counseling for free for AD military.  Otherwise, I'd ask someone who you know who has done well at savings (for me, it would be my parents or my uncle) and ask them who you should talk to for financial advice.  Each person is a different situation, and it depends on how long term you want the investment to be rather how liquid, and how risky you want to be with it.  Typically the younger you are, the more risky you can afford to be with retirement.  But only a qualified financial advisor (and there are a lot of bad ones out there) can really sit down and look at the specific dollars and cents and figure out a plan that works best for you guys.

    It's awesome you both want to save towards retirement - the earlier you start, the easier it is in the long run.  But make sure you get advice - you don't usually have to pay for it, as these people are going to be making money off managing your savings portfolio over time.  We're sitting down with my Dad's financial advisor this summer to strategize - since my Dad invests with him, he's happy to meet with us even though we don't have anything to invest yet.  If you have a referral like that, it helps!

    Also, I've been telling people all over, but I'm reading "The Millionaire Next Door" right now and it is totally changing my philosophy over saving for retirement.  I highly recommend you read it!

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  • lrh17lrh17
    100 Comments
    Calindi, I will definitely check out that book!  I was planning on calling USAA since they have been really helpful in the past.  I also go to my parents for advice on stuff like this.  They have a financial advisor and I never thought about asking if he would meet with us!

    I'm kind of obsessed with saving for retirement.  I actually work in the retirement practice of a consulting firm and the statistics are quite sad.  We only work with pension plans though, so the defined contribution plans are a little less familiar to me!
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  • IrishcurlsIrishcurls member
    1000 Comments
    Definitely talk to someone, because there are a lot of options out there. But if he's not planning on staying in the military, the TSP isn't really going to work out for retirement, because he'll only be contributing to it for the next 5ish years. It's basically the eqiuvalent of a government 401(k). My H has a Roth IRA that he contributes the max into every year--we like it because the withdrawls won't be taxed since he pays into it with "post tax" money. 401(k)s and the TSP are all pre-tax monies, so your withdrawls are taxed as you take them out. The TSP also has a maximum age for withdrawing, the Roth does not.

    As for a Roth vs. traditional IRA, the traditional works more like the TSP, mandatory withdrawl ages, and taxes are paid at the time you withdraw the funds. However there is no maximum income restrictions on the traditional, and there is a cap on the Roth.

    That's sort of the dirty details, but as for which one is best for your long term situation, you'll have to sit down and figure that out. Good luck!
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  • amh04amh04
    1000 Comments
    I can ask my H when he wakes up about it. He has a roth IRA with USAA and he contributes to his TSP as well. Fleet and Family services also holds retirement and financial counseling for free and Navy and Marine Relief Corps also does budgeting for you for free too. I'll let you know what my H says, but I highly recommend the classes Fleet and Family Services offer, plus depending on his command they'll normally let them have the day off to go to those classes too.
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  • kyrgyzstankyrgyzstan member
    Eighth Anniversary 1000 Comments 100 Love Its Name Dropper
    edited March 2012
    H and I both max our ROTHs as our first priority because of the tax benefits. I'll just C&P my response from Money Matters on TN to a similar question actually. Stand by.


    I don't think it's pointless to contribute to a TSP. I don't think it's ever pointless to save for retirement. You never know what the future holds for his career choices, and I mean, you can roll over a TSP. https://www.tsp.gov/PDF/formspubs/tsp-u-70.pdf

    "Transfer Option. If, in Item 17, you choose to withdraw any portion 
    of your account as a single payment, or monthly payments for a dollar amount that results in payments expected to be completed in less 
    than 120 months, you may also elect to transfer all or any portion of the 
    payment(s) to a traditional IRA, eligible employer plan, or Roth IRA."

    Prioritize BOTH of your ROTHs, but don't neglect any avenue towards saving.
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  • lrh17lrh17
    100 Comments
    Ahhhh you ladies are awesome!  I'm going to look into everything you've suggested.  Thanks Laughing
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