Military Significant Others and Spouse Support - MilitarySOS.com
Page 1 of 2 12 LastLast
Results 1 to 10 of 12

Thread: Clueless when it comes to investing ..

  1. Junior Member
    Tamzyn's Avatar
    Tamzyn is offline
    Junior Member
    Join Date
    Oct 2008
    Location
    Maxwell AFB
    Posts
    2,051
    #1

    Clueless when it comes to investing ..

    Advertisements
    My husband stopped contributing to his Roth TSP about a year ago because we needed the extra money to pay down some debt. He made 1st LT today and wants to start putting away about $500 a month (at the moment - it will be increased later) but we are a bit clueless where to put it. Should he start his Roth TSP again, do the traditional one, do a IRA outside of the military? We don't have any other retirement funds or anything and we are around 30 - so I feel we are really behind! He plans on staying in the military for another 10 years or so (at least to retirement which is in 8 years - if all goes to plan!) and then will try and work with the government. I'm not sure what I'm going to do work wise at the moment but it's on hold for me because of my son and being in Germany. Anyone have any advice?

    Created by MyFitnessPal.com - Nutrition Facts For Foods

  2. Senior Member
    villanelle's Avatar
    villanelle is offline
    Senior Member
    Join Date
    Aug 2009
    Posts
    14,790
    #2
    Roth TSP is a great option. I believe they have some Lifestyle funds, which are their version of civilian Target retirement funds. For people who don't want to spend much time doing research, asset rebalancing, etc., I think those funds are wonderful. They give you some diversity and they make sure you money is invested properly for when you are going to need it (whatever age you want to fully retire). As you get closer to retirement, the balance of funds in your account becomes more conservative, which is what everyone's retirement money should do. But they do it all for you, automatically.

    Just remember that with a Roth, you can't access that money to buy a house or pay for a kid's college, or anything else before retirement. Technically, you can access it, but it is complicated and generally a horrible idea. So you need to only put money there that you are 100% committed to not touching until you are age 59 1/2.

    For 2014, the max IRA contribution is $5500/yr, which breaks down to $458/mo for 12 months. With the extra money you want to invest (anything over that $458, though the limit could increase for 2015), I'd start a Roth for yourself, in your name. This would have to be a civilian account (not TSP) I believe. Technically, since you are starting well into 2014, you could put the full $500 in a Roth each month and be fine since you wouldn't hit the $5500 cap. But the following year, unless the IRA cap increases, $500/mo would put you. over the annual limit. So I'd use anything over $458 and just start it auto-investing in a Roth in your name. Or, if you don't want to do a Roth in your name because it would be slightly more complicated, you could just ptu the excess into a regular, non-Roth TSP account.
    Science always wins over bullshit. ~Dick Rutkowski
  3. Banned
    gunsgirl's Avatar
    gunsgirl is offline
    Banned
    Join Date
    Jul 2007
    Location
    lost
    Posts
    17,275
    #3
    .
    Last edited by gunsgirl; 09-10-2014 at 08:09 AM.
  4. Senior Member
    RetepDoc's Avatar
    RetepDoc is offline
    Senior Member
    Join Date
    Feb 2011
    Posts
    6,618
    #4
    My advice would be to open a Roth IRA and max that out before contributing to the TSP. The TSP is nice because you can just dump the money and forget about it but their investment options suck. I would open a Roth IRA with Charles Schwab (I love them) or a similar firm since they will provide you with much better investment opportunities. Max that out at $5,500 and then contribute whatever you have left to the TSP.

    Also, make sure you have at least 3-6 months of living expenses in an emergency fund. That should be priority #1.

    ETA. Since y'all are starting pretty late with saving for retirement you should aim to put away about 20% of your income.
  5. Senior Member
    RetepDoc's Avatar
    RetepDoc is offline
    Senior Member
    Join Date
    Feb 2011
    Posts
    6,618
    #5
    Quote Originally Posted by gunsgirl View Post
    my 2 cents: do 10% of his base pay into the TSP- the ROTH funds are good if you do not want to worry about the funds.

    Do 10% for each of you into a ROTH IRA

    and then do some into a designated savings account or money market account-

    ALL this is IF you already have 6 months of income saved as an emergency fund.

    if not do the 6 months of income before starting anything else and then reallocate after that is done.
    in order for the OP to contribute to an IRA she has to be working and have some sort of income.
  6. Account Closed
    Lynn's Avatar
    Lynn is offline
    Account Closed
    Join Date
    Mar 2011
    Location
    It could be worse.
    Posts
    29,398
    #6
    Have you considered stocks and bonds for additional investing outside of the IRA/TSP?

    I have to admit, I have a simplistic knowledge of how the investing stuff works for us, I take care of the day to day stuff and my husband handles the investment stuff. I also know that my husband and daughter for whatever reason are really good with the stocks stuff, they've chosen some amazing things for us to invest and make money on.

    Before my husband went to Afghanistan for the year, he was concerned that I was uncomfortable with the stock stuff and didn't understand it much. He called USAA and they have people that can help you. The person he had me speak with really explained it all in terms I could understand and I became more comfortable with it.

    In short, if the stocks thing interests you, consider calling USAA to talk with some of the investor people there. They were super friendly and if they could help me understand it, they could help any one.
  7. Banned
    gunsgirl's Avatar
    gunsgirl is offline
    Banned
    Join Date
    Jul 2007
    Location
    lost
    Posts
    17,275
    #7
    [.
    Last edited by gunsgirl; 09-10-2014 at 08:09 AM.
  8. Banned
    gunsgirl's Avatar
    gunsgirl is offline
    Banned
    Join Date
    Jul 2007
    Location
    lost
    Posts
    17,275
    #8
    [
    Last edited by gunsgirl; 09-10-2014 at 08:09 AM.
  9. Senior Member
    villanelle's Avatar
    villanelle is offline
    Senior Member
    Join Date
    Aug 2009
    Posts
    14,790
    #9
    Quote Originally Posted by RetepDoc View Post
    My advice would be to open a Roth IRA and max that out before contributing to the TSP. The TSP is nice because you can just dump the money and forget about it but their investment options suck. I would open a Roth IRA with Charles Schwab (I love them) or a similar firm since they will provide you with much better investment opportunities. Max that out at $5,500 and then contribute whatever you have left to the TSP.

    Also, make sure you have at least 3-6 months of living expenses in an emergency fund. That should be priority #1.

    ETA. Since y'all are starting pretty late with saving for retirement you should aim to put away about 20% of your income.
    I'm curious about why you'd recommend a Roth IRA over ROTH TSP. I agree that a Roth IRA is better for most people than regular TSP, but Roth TSP seems like it should be at the top of the list.
    Science always wins over bullshit. ~Dick Rutkowski
  10. Senior Member
    RetepDoc's Avatar
    RetepDoc is offline
    Senior Member
    Join Date
    Feb 2011
    Posts
    6,618
    #10
    Quote Originally Posted by Lynn View Post
    Have you considered stocks and bonds for additional investing outside of the IRA/TSP?

    I have to admit, I have a simplistic knowledge of how the investing stuff works for us, I take care of the day to day stuff and my husband handles the investment stuff. I also know that my husband and daughter for whatever reason are really good with the stocks stuff, they've chosen some amazing things for us to invest and make money on.

    Before my husband went to Afghanistan for the year, he was concerned that I was uncomfortable with the stock stuff and didn't understand it much. He called USAA and they have people that can help you. The person he had me speak with really explained it all in terms I could understand and I became more comfortable with it.

    In short, if the stocks thing interests you, consider calling USAA to talk with some of the investor people there. They were super friendly and if they could help me understand it, they could help any one.
    Stocks and bonds are a fun way to invest. Stocks are definitely much more risky than bonds. But as far as investing goes there is a way to go about it to get the biggest bang for your buck so to say...especially when it comes to retirement.

    1. Pay off debt with interest rates greater than 7% - That is my personal cut-off. I know some people who say not to pay it off unless it is greater than 8%.
    2. If the person is working for a company that does a 401K match then the person should contribute to the 401K to get the full match since that is pretty much free money.
    3. Max out Roth IRA - this is a great investment since the money is tax-free when you pull it out.
    4. Max out non-matching 401K or TSP (roth or non-roth)

    Quote Originally Posted by gunsgirl View Post
    I did not see that the OP said she was or was not working- even working 5 hours a week will qualify for opening an IRA.
    I read her OP as saying she is not working. Her second to last sentence was "I'm not sure what I'm going to do work wise at the moment but it's on hold for me because of my son and being in Germany. "

    Quote Originally Posted by gunsgirl View Post
    the TSP last year paid us an annual return of 12 1/2 %. we have averaged 8-14% in the last 15 years. It does allow you to "play with" the funds, as there are several different types of funds to use.

    we also have not lost a single penny in the TSP.

    Because the TSP is pretax- you will get tax benefits now and then when you do start with drawing it, the concept is that you will earn less, have less tax liability and thus will pay less taxes at that time.
    you can also get a loan on the money with a very generous repayment plan.
    I am not saying the TSP is bad. We also put money in DH's TSP. But I don't think it is the BEST investment option.

    Yes, the Roth TSP is just like any other Roth account in that the money is taxed at the person's current tax bracket and is therefore not taxed when it is taken out. And yes, the investment options that the TSP offers have been doing fairly well. However, the Roth IRAs that we have with Schwab have consistently out performed DH's TSP every year. We also have a ton more investment options with our Schwab account than we do with the TSP. Again, I am not saying that investing in the TSP is wrong. I am just saying that there are other things I would invest in first.
Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •