Besides IRAs and 401Ks, what is the best way to invest for retirement?

2017-04-04T15:55:05-04:00

Response by MSG Brad Sand made Apr 4 at 2017 4:07 PM

2017-04-04T16:07:24-04:00

Wisely?

I think if you are in the military the Thrift Savings Plan is at least worth looking into. So much easier to save if you can set it up so you never actually have access to your own money.

SGT Elizabeth Elliott Looking at what others are posting, they are doing what is right for them, you need to find what is right for you. With the little I know of you right now...I would have you think long and hard before going down the real estate...everything has it's positives and negatives.

Response by LTC Stephen C. made Apr 4 at 2017 4:38 PM

2017-04-04T16:38:26-04:00

SGT Elizabeth Elliott, look for a reputable financial professional in your area. Statistics show that generally, people do better with professional guidance.

Response by Sgt Private RallyPoint Member made Apr 4 at 2017 4:41 PM

2017-04-04T16:41:02-04:00

SGT Elizabeth Elliott Max out your contributions to a 401K and Roth IRA each year. Stick with low cost index mutual funds like those provided by Vanguard if you have a choice with your 401K. Invest other money in taxable mutual funds for emergency funds and future expenditures. Do your research so that you are an informed investor. Prepare a net worth spreadsheet each year so that con can track your progress. Investing is not hard once you learn the basics and monitor your investments.

https://investor.gov/

https://investor.vanguard.com/corporate-portal/

Investor.gov

The SEC’s Investor.gov: Tools to check your investment professional, compound interest calculators, and other objective resources for the average investor.

Response by SPC Erich Guenther made Apr 4 at 2017 5:13 PM

2017-04-04T17:13:21-04:00

Real Estate and just regular stocks.

Response by SFC Private RallyPoint Member made Apr 4 at 2017 7:30 PM

2017-04-04T19:30:55-04:00

GUNS....... they hold their value. :)

Response by SCPO Morris Ramsey made Apr 4 at 2017 8:05 PM

2017-04-04T20:05:35-04:00

Gold if you can afford it.

Response by COL John McClellan made Apr 4 at 2017 9:38 PM

2017-04-04T21:38:58-04:00

Try the Thrift Saving Plan (TSP) - available to government and military!

Response by Cpl Jeff N. made Apr 5 at 2017 6:36 AM

2017-04-05T06:36:32-04:00

Normally, a 401k is the best investment option for most people. If you are in the normal income levels/ranges and your company offers a match of some sort, that is free money and instant return on your investment. Picking your funds in the 401k is important. While you are younger you should have more high risk/high reward funds (stock funds). As you get older (closer to retirement) you go into more steady funds (bond funds).

As you move up in the ranks at a company there could be stock options and/or grants. Those are great force multipliers for retirement savings if you get them. Bank them, don't blow them in a new gizmos or whizbangs.

It is never a bad idea to invest in other things such as real estate, precious metal etc. but those can be a lot about timing and how closely you watch the market and how much work (in real estate) you are willing to do.

Most Americans are not maxing out their 401k program at work, if they have one, many are doing almost nothing. Starting early (in your 20's) is always a good idea. Time is your ally. There are no silver bullets/magic beans unless you have wealthy relatives who leave a bucket load of money.

It is time, constant, steady investment, putting away as much as you can (maxing out contribution if possible) over the long course of time, it will work but it takes discipline.

Response by SPC(P) Private RallyPoint Member made Apr 5 at 2017 9:58 PM

2017-04-05T21:58:42-04:00

Paying off your house as fast as possible
Purchase another house (rental)

Land is finite, owning it can(will) build wealth and can be handed down

Response by COL Private RallyPoint Member made Apr 6 at 2017 8:47 AM

2017-04-06T08:47:52-04:00

As others on this thread have mentioned, the Thrift Savings Plan is an excellent, tax-advantaged way to invest for retirement. More important, I think, is that if you are still serving and joined between 2006 and 2017, you will need to decide whether to opt in to the new Blended Retirement System (BRS) next year or stay in the current system. The BRS offers a combination of a 401(k)-like contribution component with matching funds and a defined component like the current system. Here's an article providing an overview of the BRS's pros and cons and a way to think through the decision: https://www.military1.com/military-finance/article/ [login to see] -3-questions-to-ask-yourself-about-the-new-retirement-system/.
Good luck!

3 questions to ask yourself about the new retirement system

By Rachel Engel Military1 Staff Beginning January 1, all new military recruits will be enrolled in the new Blended Retirement System (BRS), which will replace the current High 36 retirement plan. The new system is a cost-saving measure for the Department of Defense, but also compensates troops w

Response by CPT(P) Private RallyPoint Member made Apr 6 at 2017 11:26 AM

2017-04-06T11:26:46-04:00

There are some great responses here, and I want to add some detail.

First, why save in a 401k or TSP or other tax deferred plan? It's not because of the timing of taxes (now vs later), it is because of the number of times you're taxed. Example:
A) start with $100 in 401k which you invest and grows to $200. Then you take out the money and pay, say, 25% tax, keeping $150.
B) start with $100 and pay 25% tax, then invest the $75 in a regular, taxable brokerage account. Over time, it also doubles, giving you $150. Exactly the same result. But then the government says, "Well, we only the taxed the original $75. You have to pay capital gains on the $75 extra that you have now!" So at 15% capital gains tax on the growth portion, you get $75+$75(1-0.15)=$138.75

It gets more complicated, and tax rates change, but you will have a hard time beating that double tax. So focus on your IRA or TSP or 401k.

Second, don't be too wrapped up in the idea that low cost indexes beat stock picking managers. On average, they do. But the best 10% of managers (not average because they are the best) often beat indexes. But not always. The real idea to avoid is that you, a smart person, can put an hour or two per week into managing your investments and do better than teams of smart people dedicating all their time to it. If you manage your own money, do indexes. If you have someone do it for you, take the advice they give if it makes sense. That's what you're paying for, and you shouldn't be too cheap about it or you'll get lousy advice. If they don't perform, go elsewhere.

Third, the reason an advisor can help you is that it's easy to be better than most people. Should you buy a boat? Not if it means that you can't retire at 65 but have to work until 70. A pro can easily show that and protect you from the financial good idea fairy.

Response by MAJ Raúl Rovira made Apr 6 at 2017 11:12 PM

2017-04-06T23:12:38-04:00

Invest time into a financial plan for the future.
Make a plan to assist in not drawing Social Security until a few years after reaching retirement age. it is an additional 8% for every year it is delayed. This can make up for the retirement pay not keeping up with inflation after 20-30 years. Also, taking SS early means 25% reduction.
I get it that depending on health issues and financial situation, this may not work with everyone.

The only reason I know this is because I have a very good financial planner.

Response by CPO Bill Penrod made Apr 7 at 2017 1:43 PM

2017-04-07T13:43:58-04:00

Definitely see how other folks manage/invest their $$$ but the decision and $$$ is yours so don't rely on sea/barracks lawyers get profession help.............

Response by Cpl Joshua Caldwell made Apr 20 at 2017 6:08 PM

2017-04-20T18:08:22-04:00

I am a huge of real estate as an investment class because it is recession proof and it continues to produce cash flow without consuming the asset. You can collect rent for decades and still own the property.