Guest Scooby Posted December 26, 2010 Posted December 26, 2010 Lifecycle 2050 begins the end of Jan 11. This could be worth transferring your money into from L 2040 if you want a more aggressive mix of stocks and bonds and you're planning to start withdrawals around 2045. Just personal preference but I think the Lifecycle funds are a waste of time for guys who are that far out from retiring. I did the L 2040 for a bit and it was super conservative...I think it even had money in bonds for a bit. No thanks...anyone below 30 years old can comfortably be 100% in stocks. I'm glad I made the switch, too...the past two years my own combination of C, S and I funds have greatly outperformed the L2040.
schokie Posted December 26, 2010 Posted December 26, 2010 Just personal preference but I think the Lifecycle funds are a waste of time for guys who are that far out from retiring. I did the L 2040 for a bit and it was super conservative...I think it even had money in bonds for a bit. No thanks...anyone below 30 years old can comfortably be 100% in stocks. I'm glad I made the switch, too...the past two years my own combination of C, S and I funds have greatly outperformed the L2040. All the L funds put some money in bonds. For the further out funds that percentage is fairly small. As you get closer to the end date of the fund the percentage in bonds increases while the percentage in stocks decreases. It's all about balancing the risk. I agree with you that a younger person could comfortably invest most of their money in stocks, but it's foolish to not diversify your risk. Different risk levels are required as well as different types of stocks. If you take an active role in managing your allocations you stand a good chance to beat the L funds. But they're a great option for someone who doesn't have the time or desire to do the research and the constant upkeep required to maximize their investment. The forums at TSPcenter.com have several great threads discussing the L funds in detail. 1
czecksikhs Posted June 3, 2011 Posted June 3, 2011 Didn't see this tidbit posted anywhere else: Treasury stalls debt ceiling breach by witholding interest from TSP G fund So, if you have money invested in the TSP G fund, the treasury can take interest that is supposed to be paid to you and run some fuzzy math to shave a few million off the national debt. Not to worry, your principal and interest payments will still be made available by law. I wish I could run my checkbook like these clowns.
nsplayr Posted June 4, 2011 Posted June 4, 2011 (edited) This is the kind of stuff Geithner was talking about when he said that Treasury could take "extraordinary measures" to keep the government under the debt ceiling until August rather than letting us bust through it sooner. If we could quick dicking around and get a deal on this it would help everyone out. I'm glad Speaker Boehner recently came out and said he wants a deal within a month. Edited June 4, 2011 by nsplayr
czecksikhs Posted June 7, 2011 Posted June 7, 2011 Amplifying info: Treasury raids TSP G fund I've pencil-whipped the occasional approach or other event for the semi-annual, but I've never pencil-whipped $56 Billion. Tremendous.
MilitaryToFinance Posted June 10, 2011 Posted June 10, 2011 I know we have quite a few folks here who have separated from the military. When you left did you keep your money in TSP or did you move it out? Either to a new employer's 401k or a traditional IRA.
Guest Posted June 10, 2011 Posted June 10, 2011 I know we have quite a few folks here who have separated from the military. When you left did you keep your money in TSP or did you move it out? Either to a new employer's 401k or a traditional IRA. Moved it.
ThreeHoler Posted December 2, 2011 Posted December 2, 2011 Has anyone seen anything new on the Roth TSP option? https://www.tsp.gov/PDF/bulletins/10-13.pdf
Finance_Guy Posted January 3, 2012 Posted January 3, 2012 TOPIC: TSP Facts for 2012 1. This message is to inform you of facts pertaining to the military Thrift Savings Plan (TSP) for calendar year 2012. 2. The Federal Retirement Thrift Investment Board has announced the 2012 TSP contribution limits. Those limits are: Regular elective deferred limit: $17,000 TSP catch-up limit: $ 5,500 Members in a tax-free combat zone: $50,000 NOTE: The $50,000 total includes tax-exempt combat zone contributions and regular deferred contributions. 3. Based on the continuation of the 2011 reduction in the FICA percentage, airmen can continue to contribute any whole percentage up to 94 percent of basic pay, as long as the annual total of the tax-deferred investment does not exceed $17,000. 4. Members may also invest all or part of their bonuses, special pay or incentive pay. A percentage must be established for each of these entitlements separate from the base pay percentage and must be contributing a percentage of base pay in order to include a percentage for these additional entitlements. 5. DJMS has been updated to reflect the change in base pay percentage for both Active and Reserve\Air National Guard components. 6. AF implementing instructions will be published by AFAFO as needed. 7. Removed 8. Please ensure the widest dissemination. DFAS-JFLMC/IN Military Pay Operations - Indianapolis (Air Force) Systems Liaison & Procedures Division
DeHavilland Posted February 5, 2012 Posted February 5, 2012 I will go on limb and ask this question. The IRS website says - 2012 Combined Traditional and Roth IRA Contribution Limits If you are under 50 years of age at the end of 2012: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2012. I am deployed and will be for all of 2012. My W2 will therefore list ZERO in block 1 - Wages, tips, other compensation. It seems to me that I cannot make any contributions to my Roth IRA. As such, it is to my advantage to use my TSP to put in the 17K or the total maximum of 50K allowed for tax-exempt combat zone contributions. Right, wrong, comments or suggestions?
ThreeHoler Posted February 5, 2012 Posted February 5, 2012 There is a fairly new military exception to the zero taxable income rule for IRAs. As your entire pay is tax free, contributing to the TSP cannot lower your taxable income, so put it where your money will earn the most. I would suggest maxing out the Roth IRA and as much of the 50k into the TSP that you can.
Jaded Posted February 5, 2012 Posted February 5, 2012 Putting tax-free earnings in a TSP (or 401k, or traditional IRA) is pointless. You're not deferring any taxes, you have to pay taxes on your earnings anyway, and you're preventing yourself from touching that money until you have old balls. Just put that money in a brokerage account; it's the same. The way that reads, it looks like you can't contribute to a Roth if you literally have $0 of taxable income (which I didn't know). If you still want to fund it, you might want to look into interest income (SDP is $1k to start) or capital gains.
C17Driver Posted February 5, 2012 Posted February 5, 2012 Putting tax-free earnings in a TSP (or 401k, or traditional IRA) is pointless. You're not deferring any taxes, you have to pay taxes on your earnings anyway, and you're preventing yourself from touching that money until you have old balls. Just put that money in a brokerage account; it's the same. The way that reads, it looks like you can't contribute to a Roth if you literally have $0 of taxable income (which I didn't know). If you still want to fund it, you might want to look into interest income (SDP is $1k to start) or capital gains. Contributions to your TSP that are made in months you were in a combat zone remain tax free. The earnings would be taxed, but not the original contribution when you withdraw it at a later date.
Jaded Posted February 5, 2012 Posted February 5, 2012 The earnings would be taxed, but not the original contribution when you withdraw it at a later date. Right, and that would be true whether you put it in a TSA or in a normal taxable account (like a brokerage or standard mutual fund). The TSP is a tax deferred account. If you aren't paying taxes, there is nothing to defer. Thus, there is no advantage to tax free in TSP. 1
ThreeHoler Posted February 5, 2012 Posted February 5, 2012 (edited) The way that reads, it looks like you can't contribute to a Roth if you literally have $0 of taxable income (which I didn't know). If you still want to fund it, you might want to look into interest income (SDP is $1k to start) or capital gains. The HERO Act changed it so that you can contribute to a Roth IRA as a military person with zero taxable income. It also allowed retroactive contribution to a Roth IRA for 2004 and 2005 up until 2009 if the member served in a combat zone during those years. As for the advantages...there are a few considerations. One is that you could put it into a normal taxable account and still only pay taxes on the earnings. The other though is more interesting to me, as military members can continue to roll money into their TSP even after they get out, i.e. if your company 401k has lots of fees, you can instead roll your monthly 401k contribution (and employer matches) into your TSP. Edited February 5, 2012 by ThreeHoler
Dingle Posted February 17, 2012 Posted February 17, 2012 What do guys think of the Roth TSP? there's a roth TSP? where is that option under myPay?
ClearedHot Posted February 17, 2012 Posted February 17, 2012 there's a roth TSP? where is that option under myPay? https://www.tsp.gov/PDF/bulletins/11-u-4.pdf
ThreeHoler Posted February 17, 2012 Posted February 17, 2012 I am considering putting money in both the traditional and roth TSP. The traditional reduces my current tax burden. The roth saves on later taxes. You should be able to set it up on the TSP website. You can contribute to both as long as you don't go over the 17k (50k) limits.
ClearedHot Posted February 17, 2012 Posted February 17, 2012 I am considering putting money in both the traditional and roth TSP. The traditional reduces my current tax burden. The roth saves on later taxes. You should be able to set it up on the TSP website. You can contribute to both as long as you don't go over the 17k (50k) limits. Concur...we don't save enough as Americans...given the economic uncertainty of the future you would do yourself a huge favor and save a minimum of 10% of your income, realistically it should be more. The choice of which plan to use is a function of what you think your income will be at the point you begin to withdraw it. Realistically, most of the folks on this forum and in the military are younger so I think it best to maximize your Roth to build long-term tax-free wealth. However, you would be smart to suck it up and do both. One strategy I've heard is to put half of every military raise into savings/retirement...be it a yearly raise or a longevity raise, it can really add up and the best part is you never miss the income. I started with my first paycheck as a 2LT...$300.00 a month and upped it with each raise. I never missed it and still had plenty of money for beer and bourbon. I started with a traditional IRA and converted when the ROTH came a long...I paid a big tax bill to convert but to protect future gains is made a lot of sense. You will find you can quickly max the Roth so put the rest into TSP or a traditional IRA. You might not notice it at first, but it really adds up over time and the TSP has been like an extra bonus, I've easily saved $150K in the 10 years the program has been open for military.
matmacwc Posted February 17, 2012 Posted February 17, 2012 I did 10% in a traditional IRA with a local investment company last year and 5% in TSP due to some GS benefits, worked out heavily in my favor (Transamerica fund). I'm wondering if I should do my 5% into the Roth TSP as well as my 10% into my TA Roth this year. Guess I should just call the investment dude.
ClearedHot Posted February 17, 2012 Posted February 17, 2012 (edited) Guess I should just call the investment dude. Unless you have a guy, call around. My investment dude is VERY aggressive and while it has paid off nicely in my portfolio, we don't always agree. Case in point, he is not a big real estate guy (makes sense, he wants my cash to work with), but I prefer to spread some of my risk around and I think there is value to actually owning something. If it were up to him I would have an interest only loan on all of my properties, make no principle payments and invest the extra money each month. When I was a Major I put all of my rental properties on 15 year mortgages and was able to build a lot of equity thus weathering the bubble that got a lot of people...I am WAY to the good on what I own, but as I get older I want less debt and more security. A few months ago I did a top to bottom review and thought about refinancing the rentals to take advantage of the lower rates, but having only six years until they are paid off made the math a toss up. Instead I was able to get a secured interest only loan (against my portfolio) at 2%, but I kept my monthly payment the same. Believe it or not my monthly house payment is only $78, but I still pay $1200, now the properties will be free and clear in three years. Rock-Bottomline, there are many strategies and talk to several money guys to find the one that is right for you. Edited February 17, 2012 by ClearedHot
Vetter Posted February 17, 2012 Posted February 17, 2012 I've become a believer in passive investing. My portfolio primarily consists of index funds that track market performance. I just throw money into the funds and forget about it. It's been life changing. Read here for more info. www.bogleheads.org TSP rocks...lowest fees of ANY retirement programs. Max it out! Also, contrary to what most people think, the G-Fund is unmatched anywhere. It's gives you small returns with absolutely 0 risk. Use it!
PSYCH Posted February 17, 2012 Posted February 17, 2012 It seems like there are quite a few differing perspectives on investing. Maybe we don't really make enough money to throw loads of cash into an investment portfolio, but there has to be something better than the TSP and a basic Roth IRA. Aside from the few day traders that seem to exist in each squadron, does anyone have any recommendations on a good portfolio manager or any techniques on wealth gaining ideas.
xaarman Posted February 17, 2012 Posted February 17, 2012 It seems like there are quite a few differing perspectives on investing. Maybe we don't really make enough money to throw loads of cash into an investment portfolio, but there has to be something better than the TSP and a basic Roth IRA. Aside from the few day traders that seem to exist in each squadron, does anyone have any recommendations on a good portfolio manager or any techniques on wealth gaining ideas. You don't need one. https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071747052
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