Are you making maximum use of your financial benefits or wasting the opportunity you have? Are you contributing to YOUR TSP?

2015-03-14T06:16:54-04:00

Are you and your Soldiers/Sailors/Airmen/Marines/Coast Guardsmen taking advantage of the Thrift Savings Plan? If not, why not?

I feel obligated to ask and share this with you as I do with Soldiers serving with me. Many are embarrassed at some of the choices they have made and while they make excuses as to why they are not investing in their future they try to look away and avoid eye contact. I will not pressure anyone to do something they do not want to do however, I will encourage everyone to take control of their financial future and start putting some money away into the TSP or some other long range investment portfolio.

You are quite possibly wasting an incredible opportunity here and I will share a personal success of how it worked and is still working for us. I started off contributing $50 a month as a married SSG and we had 4 very hungry, growing children (3 boys and a girl) while carrying two house notes (one rented and one we were living in) and two car payment (her SUV and the Harley) as well as dresses for dances, wrestling shoes, dirtbike maintenance and helmets, football cleats and etc....we still found a way to put $50 a month to put into the program (we did it through the allotment). In 2005 we had $5K in the TSP. I checked our balance last week and we have almost $210K in the TSP. I didn't believe the number so I looked again, yes $210,000 in the account.

Look people, I have a Kentucky public education (we are better known for our basketball than our public schools), if I this can work for me, it can work for all of us - I ask you to not waste your opportunity while you have this benefit available to you to make your money work for you. Last quarter of 2014 we made over $18,000 in gains in that 3 month period, last year our gains were over $37,000.....you can't get there until you start along the path of financial independence....you have to get started - even if its only $100 a month.....are you still paying for your GI Bill? then pay yourself!

Response by CSM Private RallyPoint Member made Mar 14 at 2015 6:19 AM

2015-03-14T06:19:58-04:00

Great advice CSM!!!

Response by SGT Private RallyPoint Member made Mar 14 at 2015 6:43 AM

2015-03-14T06:43:23-04:00

That's awesome, Sergeant Major! I've been contributing 15% of my salary to TSP ever since I was in AIT (3 years ago) and I have to admit, when I look at my balance, it doesn't seem like I've accumulated very much. Your success story is an inspiration a reminder that we just need to persist and be patient. It will all pay off in the end.

Response by CMSgt Private RallyPoint Member made Mar 14 at 2015 8:22 AM

2015-03-14T08:22:03-04:00

What a great story! I am guessing you started dumping a lot more than $50 a month into your account after 2005?

Response by SrA Matthew Knight made Mar 14 at 2015 8:52 AM

2015-03-14T08:52:23-04:00

I have never really thought about TSP as I think it was one of those things they told us about during in-processing briefings. And let's be honest, how many of us especially junior enlisted actually pay attention. I will this this though CSM, you have a way with words. You caught my eye at $210K. I am asking my supervision now to figure out what to do for this. I think if I can spend money on movies, restaurants and video games I can put $50-$100 away for this, especially if it has the possibility to grow as yours did. Thanks for the advice.

Response by CSM Private RallyPoint Member made Mar 14 at 2015 9:22 AM

2015-03-14T09:22:30-04:00

The TSP is a good option, but it isn't always the best option. It is cheap because it does not charge a load, but managed funds can make more money because most of them are not as conservative as the TSP plans. I push it to my Soldiers who need to start investing.

Response by GySgt Wayne A. Ekblad made Mar 14 at 2015 4:09 PM

2015-03-14T16:09:27-04:00

http://www.washingtonpost.com/blogs/federal-eye/wp/2015/03/13/treasury-again-tapping-tsp-federal-retirement-fund-for-debt-ceiling-relief/?tid=hpModule_308f7142-9199-11e2-bdea-e32ad90da239&hpid=z15

Treasury again tapping TSP federal retirement fund for debt ceiling relief

With the federal government due to hit its debt celing Monday, the Treasury Department again will use financial maneuvers to stave off a default.

Response by MSG Private RallyPoint Member made Mar 14 at 2015 5:53 PM

2015-03-14T17:53:45-04:00

Great Story!

I have been using the TSP since I was a PV2, 8 years later I am happy with my contributions and gains.

Response by Lt Col Fred Marheine, PMP made Mar 15 at 2015 7:21 AM

2015-03-15T07:21:18-04:00

Great advice on several different levels - as nobody has commented on a couple things I think important, please allow me to leverage:

1. Contribute via payroll allotment percentage (versus a set dollar amount) and your contributions continue to increase with longevity and promotion pay raises.
- You still "see" a raise in your paycheck...and experience a raise in your investments as well.
2. Set a portfolio distribution commensurate with your age and risk tolerance and re-balance to that distribution periodically (at least annually - I prefer semi-annual in Jan and July).
- Most people under 50 will want the vast majority of their assets in the C, S, and I funds.
- Recognize the L funds are portfolio distributions - they own the exact same "standard" TSP funds (i.e. C, S, I, F, G) in specified proportions with date-specific adjustments and regular re-balancing, but their fees are slightly higher than if you managed the underlying funds yourself.
- Disciplined re-balancing forces you to "buy low and sell high" by selling portions of the gainers to buy those that are underperforming.
- "Trading" shares to "hit" winners when they are hot almost always results in buying high and selling low...bad ju-ju.
3. Stop looking at it! You're investing for retirement...15+ years away or more. Watching the balance three times a week won't make it grow - contributing consistently over time and the power of compounding makes it grow.

One last thing, when you leave military service - get your assets transferred OUT of TSP and into an appropriate self-directed retirement fund. TSP is great for contributing; it is remarkably bad (in terms of distribution options, flexibility, rights of survivorship, etc) for distributions.

Response by PO1 Jeff Doan made Mar 15 at 2015 7:51 AM

2015-03-15T07:51:50-04:00

When I joined the USN in 1976, there was no such thing as TSP. As a 17 year old squid, I probably would not have contributed anyways, I was too busy living young! My Dad always old me to save 10% of my earnings. I wasn't that smart either!

My wife started her TSP about 18 years ago. She retired last year and we rolled the TSP into an IRA. Her TSP had accumulated over $187,000.

After retirement from the USN in 1998, I began working as a civil servant. I opened a TSP account "G" fund with 10% contribution. That's only about $200 +/- per month. I lose more than that playing scratch off's! And TSP is a much more reliable retirement plan than the lottery! Only 5 more years and I will roll mine into an IRA as well! (I've gotten smarter with age!)