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Thread: TSP accounts

  1. Junior Member
    Tamzyn's Avatar
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    #1

    TSP accounts

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    Is it worth doing? We are going to be putting away $500 a month (and will increase it as time goes by) and we're pretty much clueless about saving/investing

    Hubs wants to put it all in a TSP account, but we're not discounting other options such as IRAs etc. We need to start looking seriously at saving for retirement etc and now is the time!

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    #2
    yes it is absolutely worth it-

    you will get differing oppinions on what is best for us we did this:

    we Max the TSP - this is done pre-tax ( meaning they take it before taxes are taken out, lowering your tax bill), when you pull it out when your retired you will pay taxes then, however the assumption is made that at age 59 1/2 - 65 your income will be lower and thus your tax rate lower.
    we also MAX the His Roth IRA and I put about 3 grand a year into my own roth- these are post tax payments- you pay taxes now not when you withdraw.

    because you can only pay into the TSP until the member leaves AD, we are trying to get as much in as we can before DH retires in 2 years.
    we started out at 5% a pay day, and are up to 12%- and since 2001 we have over 55,000 dollars saved in just that account. ( I have been very conservative tho).
    once DH retires, this account will sit collecting interest for 15 years. before we will start using that money, with our math- there should be close to 75,000 in the account at that time as long as the interest rates hold out.
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    #3
    I think so, DH has been putting into it since he got in 4 years ago, and has over 6,000 dollars. He was looking into a roth IRA but decided against it I think.


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    #4
    Personally, I would split my money between a Roth IRA and TSP, as a way of hedging your beats on the tax situation. If you have $500, I'd do a 50/50 split between a Roth and the TSP. For the TSP, since it sounds like you aren't super investment savvy, I'd pick the lifecycle fund that most closely aligns with your projected retirement date, and put all the monty there. That will split your money across their various funds, and give you diversification. And it will constantly adjust your holdings so that they get more conservative as you get closer to retirement.

    If you don't want to split your money, or don't want to deal with finding a Roth IRA, then a lifecycle fund with TSP is a solid choice.

    The most important thing about investing is to just *do it*. You may not make the absolute perfect choice, but getting that money set aside and working for you if vital, so don't let wanting to make the perfect choice prevent you from making a good choice, and doing it Sooner rather than later.

    (As a side note, there is a new ROTH TSP but I've not been able to find decent info on it so I am ignoring it in this post.)
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    #5
    We haven't done much in ours; but, plan too when we are debt free. I would love to put in about 30% away or so.
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  6. Junior Member
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    #6
    Thanks for the replies Many people seem to advise getting a ROTH, and I see that TSP has just introduced a ROTH TSP - would that be more beneficial? I guess with military retirement, the prospect of another career for my husband, and a career for me (I'm not currently working) we may end up in a higher tax bracket than we are now - but who knows!

    Hubs is starting at 10 - 11% base pay until we pay off some debt

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    #7
    We only put 3-4% in TSP. Our Roth IRA contains more of our investments. We are actually thinking of eliminating TSP altogether as it isn't as great as it once was.

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