Investing for retirement (TSP, IRA)

[Guest guardhopefull]

I’m pretty clueless when it comes to stuff like retirement, investing, and so on. But I’m starting to get concerned and want to make sure I’m going to be okay at retirement. I want to start to learn this stuff so can anyone recommend an on-base service that might help me with this? Would USAA be a good source to get info? I have a brother in law who was in the Army and is now a banker so he can probably help me decipher the specifics of programs but he will probably first ask me what programs are available (if any).

I’m just looking for something stable and relatively low risk to start putting money away for the golden years. I have no idea yet if I will be in for 20 years so Id like to have something constant and reliable that I can start up. Something that can easily follow me around no matter what job I might be at in 15 years from now. Do I have any military retirment benifits if I only put 10 years in? Thanks for any suggestions.

[Bergman]

Originally posted by guard/reserve hopefull:

Would USAA be a good source to get info?

Yes! A great company to deal with.

I’m just looking for something stable and relatively low risk to start putting money away for the golden years

ROTH IRA!! They're easy, free, and require zero effort. Plus, they grow TAX FREE so when you retire you get 100% of what's in the account. If you do nothing else, open a Roth IRA account!

[M2]

Jeez, did you completely miss the recent thread titled 'Money'?? :confused:

Cheers! M2

[M2]

Sorry, I missed the second part of your question. See the other thread from a few weeks ago titled 'Retirement'.

Bottom line, no, you don't get any retirement benefits until you have completed 20 years, unless you are medically retired for some reason...

Cheers! M2

[Guest Dactyl]

About USAA, do they have branches/stores? or is all their business done online? I want to go USAA but am a little reluctant to transfer my net worth to a web page. Thanks.

[M2]

Dactyl

If you are ever in San Antonio, USAA has a large complex that covers both the insurance and banking sides of their operations. The also have major offices in Phoenix, C. Springs, Norfolk, Sacramento and Tampa. Contact info can be found here.

Cheers! M2

[Guest guardhopefull]

I did not see the "Money" post Max, I limited my search to "retire" and "investing" and did not get enough info but I should get points for using that good ol search button right! But seriously I will be right next to San Antonio at XL for a year so I will have to stop by and see them. Iv been hearing about the IRA's and will have to get more info on them. Id like to get something that pulls right out of my LES if possible. Thanks everyone

[Guest BLEEDS ON]

IRA's are great for being tax free and getting a tax break for contributing, but the thing I don't like about them is your money is tied up until retirement. What if you run into hard times for some reason? You'll take a 10% penalty right off the bat simply for withdrawing early. Anyone chime in here, but I prefer stocks with high yields on dividends, and then have your brokerage reinvest those dividends. No matter what investment you decide, CLOSELY REVIEW THE FEES!!!! Some companies rape you with this fee, that fee and the other and all of a sudden your gain really isn't anymore.

[Bergman]

Originally posted by BLEEDS ON:

What if you run into hard times for some reason? You'll take a 10% penalty right off the bat simply for withdrawing early.

I agree that IRAs are not the most accessable means of investing.

Having said that, it would be terribly short sighted to withdraw your retirement fund savings to pay for short term debt. If you are that bad off financially, it would be better to declare bankruptcy (IRAs are protected from bankruptcy) than to squander your retirement account savings. Of course, the best policy is to NOT get into a financial bind in the first place by not spending more than you earn!

[M2]

Air Force Personnel Center News Service

April 8, 2005

Release No. 031

Air Force announces Thrift Savings Plan open season

RANDOLPH AIR FORCE BASE, Texas -- Civilian and military employees can sign up for, or change, their Thrift Savings Plan contribution amounts during the "open season" April 15 - June 30.

"TSP is a long-term retirement savings plan, which everyone should consider," said Ms. Jackie Holland, task manager at the Air Force Personnel Contact Center here. "It's a great supplement to military and civilian retirement plans.

"It's also important to note that TSP is not limited to investing in stocks," said Ms. Holland. "People can choose safer government securities as well."

This open season applies only to regular TSP contributions. It does not include TSP catch-up contributions, as they are not tied to open seasons, according to Janet Thomas, of AFPC's civilian benefits and entitlements service team.

TSP offers investors the chance for lower taxes each year they contribute while not having to pay taxes on earnings until they reach retirement.

"Eligible employees can take out loans and make in-service withdrawals from their TSP accounts," said Ms. Thomas. "And you can keep your account, even if you leave military or federal civilian service."

Investment money is deposited directly from each paycheck "so you never have to think about it," said Ms. Holland. "That makes it easy to 'pay yourself first' while only investing what you deem appropriate."

The five TSP funds are: the Government Securities Investment (G) Fund; the Common Stock Index Investment © Fund; the Fixed Income Index Investment (F) Fund; the Small Capitalization Stock Index Investment (S) Fund; and the International Stock Index Investment (I) Fund. TSP also hopes to make "Lifecycle" funds available mid-2005. Lifecycle funds are 'target asset allocation portfolios' that will hold a mix of the five funds currently available. The mix of funds is chosen based on the date the employee expects to need money for retirement. The Thrift Board is still working out the details. In the meantime, a series of questions and answers on the lifecycle funds can be found on the TSP Web site at:

https://www.tsp.gov/curinfo/specint/LFC-Qs&As.html

Additional publicity will be issued when final details become available.

"As with any individual retirement account, the sooner you begin contributing, the better," said Ms. Thomas.

Contribution elections and/or changes made between April 15 and June 11 will take effect June12, for both military and civilian personnel. Changes made on or after June 12 will become effective at the beginning of the pay period following the one in which the election is made for civilians and the following month for military.

Public Law 108-469, signed into law Dec. 21, 2004, will eliminate TSP open seasons. The Federal Retirement Thrift Investment Board is implementing this law effective July 1, 2005. As a result, beginning July 1, civilian employees and military members may start, change, stop, or resume contributions at any time. For civilians the elections will be effective at the beginning of the pay period following the one in which submitted, and for military members elections will be effective the following month.

Some of the specifics of the program include:

Military

-- Military members can contribute up to 10 percent of their base pay, as long as the annual total of tax-deferred investment doesn't exceed $14,000 for 2005. Airmen also have the ability to invest all or part of their bonuses or special pay.

-- Those serving in tax-free combat zones are allowed up to $42,000 in annual contributions.

-- Military members can enroll through the Defense Finance and Accounting Service web site at https://www.dfas.mil/emss/ They can also enroll by filling out a form TSP-U-1 at local military personnel flights, finance offices and family support centers.

-- Contribution allocations (how an employee chooses to invest money among the five funds) can be made by calling the TSP automated ThriftLine (877) 968-3778 for members in the 50 States, Virgin Islands, Puerto Rico, Guam, American Samoa and Canada, or (504) 255-8777 for members elsewhere, or on the TSP web site at https://www.tsp.gov/ For general TSP questions, call the Air Force Personnel Contact Center at (800) 616-3775.

-- Specific TSP information is available for Air Force military personnel at https://www.afpc.randolph.af.mil/mpf/TSP/th...avings_plan.htm

Civilian

Contribution limits are based on which retirement system an employee has. For the current open season, the following contribution rates apply:

-- Federal Employees' Retirement System employees may contribute up to 15 percent of basic pay each pay period. Once eligible, the government provides matching funds of up to four percent as well as an automatic one percent each pay period, whether the employee contributes or not, making the government's contribution five percent.

-- Employees covered by the Civil Service Retirement System may contribute up to 10 percent of basic pay, but do not receive any agency contributions.

-- Beginning in December 2005, there will no longer be percentage limits on how much FERS and CSRS employees may contribute each year. Contributions will be restricted only by the Internal Revenue Code's annual limit, which is $15,000 for 2006.

-- Specific information is available for civilian employees from the Thrift Savings Plan web site at https://www.tsp.gov/ and the BEST homepage at https://www.afpc.randolph.af.mil/dpc/BEST/menu.htm

-- All Air Force-serviced civilian employees will make their TSP contribution elections or changes electronically through the Web-based Employee Benefits Information System at https://www.afpc.randolph.af.mil/dpc/BEST_GRB/EBIS.htm or through the BEST automated phone system at (800) 616-3775. Hearing impaired employees may contact BEST by calling TDD (800) 382-0893 or commercial 565-2276 within San Antonio, Texas. Overseas employees will dial the AT&T Direct Access Number for the country they are calling from and then enter (800) 616-3775. AT&T Direct Access Numbers can be obtained from access instructions can be obtained from https://www.business.att.com/bt/dial_guide.jsp Counselors are available weekdays from 7 a.m. - 6 p.m. Central Time.

-- Contribution allocations (how an employee chooses to invest their money among the five funds) are made via the "Account Access" section of the TSP website https://www.tsp.gov , or by calling the ThriftLine (1-877- 968-3778 for employees in the 50 States, Virgin Islands, Puerto Rico, Guam, American Samoa and Canada; 1-504-255-8777 for employees elsewhere).

More information about the Thrift Savings Plan can be found in the booklet "Summary of the Thrift Savings Plan" on the TSP home page under civilian or uniformed services TSP Forms and Publications.

Cheers! M2

[Guest Flight]

Just curious if the Air Force provides SOUND finacial and retirement planning advice upon commissioning? I have been looking into various firms ( Vanguard ), but was curious to what some of the "older" ladies & gentlemen have to say about this subject.

[Guest ericvano]

Speaking of which, doesn't the military / govt. have it's own retirement investment vehicles? I've heard you don't get a 401-k, but something equivalent, though not quite as good? Would love to hear about this...

As a sidenote, you can always invest on your own. Best option for retirement outside of a formal arrangement with your employer is a Roth IRA, as the gains are tax-free. I think you can contribute up to $4000/yr without penalty...

[Beaver]

No, the AF doesn't really give you investment advice. I hate to be this guy, but we've had some extensive threads on this topic. Try searching for "Roth IRA" "TSP" and "Stay the f*ck away from First Command"

That should get you started.

[Guest Flight]

I did a search on investment planning, retirement planning with no results. I was really just trying to see if the Air Force provides planning advice, which you answered, so thanks. I wasn't trying to get advice here.

[Beaver]

That's all right, we're all just a bunch of know it all a-holes anyway. We would have started bashing you soon.

Check out Thrift Savings Plan

[Guest Flight]

LOL...Thanks Beaver!!

[Guest SnakeT38]

If you want "advice" from the Air Force concerning

"financial planning", just remember this, YOU

(Military People) were either the last Federal Employees or darn close to last, to get a 401K plan..................given that, DO YOU THINK THEY CARE?

One other note to the "young ones", THERE ARE OTHER COMPANIES, that provide insurance and

investment vehicles and there names don't include

the letters USAA.

[M2]

Why invest? You're young, you've got your whole life in front of you. Go out and buy yourself a new car, a motorcycle, and spend the rest on beer and babes. When you wake up one morning hung over and married, then you should start to worry about investing for the future. But until then, go out and have fun. You will be old before you know it...

Enjoy, you can thank me later!

Cheers! M2

[Guest ericvano]

Invest as young and early as you can. If you sock 10% out of each paycheck, you'll never miss it cus you never knew you had it to begin with. You can still chase tail and drink to your heart's content.

Check this out, compound interest calculator:

https://www.moneychimp.com/calculator/compo..._calculator.htm

if you start with 3000 current principle, make an annual addition of 5000 a year, and compound it 365 times a year at a growth rate of say 8%, and let it grow for 35 years vs. 20, you're differences on return are geometric. definitely start socking away retirement now.

[Champ Kind]

As a relatively new officer, I can say from experience that if you just start investing as soon as you start drawing your O-1 pay, you will never miss it. With ROTH IRAs and such, just remember... It's a marathon, not a sprint. Just know that you are investing for your future, and act like that 10% (or so) of your paycheck was never there, but the dividends will be there for you in about 40 years or so.

Oh, and yeah.... stay away from First Command!

[Guest SnakeT38]

Is First Command the old USPA?

[Scooter14]

Snake,

Yes it is. They just had some big investigation or something, and I don't think they can even offer the plans anymore. But, regardless, stay away from First Command.

[Guest crobey]

Originally posted by Coach Z:

you're differences on return are geometric. definitely start socking away retirement now.

"exponential" might be a more accurate term

[Guest SnakeT38]

Originally posted by Scooter14:

Snake,

Yes it is. They just had some big investigation or something, and I don't think they can even offer the plans anymore. But, regardless, stay away from First Command.

I never could afford even $100.00 per month back then, although I did do their free steak at UPT.

Suffice to say "I do my own thing" now, BUT, for the "youngun's" again, I have known guys that went with USPA with minimal amounts from DAY ONE,

and even AFTER their 13.5% hit upfront, those funds (several) made small fortunes over time.

Had one airline bud I used to do taxes for and HIS

GAINS and distributions were over 40K per year back in the 90's! So, if you find a good company,

the "mindset" does work over the long haul.

[Guest ericvano]

"exponential" might be a more accurate term

yes. i knew something was wrong with that sentence. geometrically exponential then. or something.

and definitely put your money into aggressive growth if you're young to really see the returns. do some research on the mutual funds and what kind of performance they've had in the past. move into less aggressive growth options as you get closer to retirement.