Should I invest in the TSP???
Should I invest in the Thrift Savings Plan? This is one of the questions I most often get from my junior Marines. An easy question most definitely, but an easy answer there is not. The first thing I think is yes you should invest in the TSP, but the truth of the matter is I don’t know if it is always the best thing for those of us in the military. There are definitely plusses and not many negatives I can think of in the TSP.
Benefits of Investing in the Thrift Savings Plan:
The most obvious pro is that you are saving. Second it reduces your income as far as taxes go for the time being and third the TSP has very low maintenance fees. Another great thing about the TSP is that it is an automatic payroll deduction so it is very easy.
Cons of investing in the TSP:
What could be bad about investing in the TSP? I wouldn’t necessarily say there is anything bad about investing but if you are a savy or disciplined investor there might be better vehicles for your money. Since there is no matching contribution for the TSP with active duty military you may be better off investing after tax dollars into a Roth IRA vice the TSP. What make a Roth better you ask, well the number one thing is that your money grows tax-free. With a Roth you pay taxes on your money now and then when you withdraw it it is tax-free.
Final Verdict:
I recommend that all Marines invest in the TSP.
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June 22nd, 2008 at 9:19 pm
Great article. I often wonder why so many Marines refuse to enroll in the TSP.
June 24th, 2008 at 3:20 pm
I’ve done my best to spread the word about the TSP, and it’s something I think every service member should consider. For most service members, it’s a great deal and one they should take advantage of.
June 25th, 2008 at 8:49 pm
Patrick I can’t agree with you more
July 18th, 2008 at 3:11 pm
I’ve tried to convince my son to do both the TSP and a Roth. I KNOW it’s a stretch for the young Marines, esp those with a family, but it would put them so far ahead if they invest early.
I think a match (even a 50% match on the first 6% like a lot of corporations do) would be a huge incentive. At least the Marine!Goth is putting SOMETHING away – that’s better than I did at his age!
July 18th, 2008 at 10:58 pm
Karla I think there needs to be automatic enrollment into the TSP that you must opt out of. A match would be great as well but not sure if we will ever get that as we do have a pretty nice pension plan if we stay 20 years.The JArhead
September 2nd, 2008 at 10:49 pm
Better late than never, but. . .
I keep hearing that Roth TSP is on the way. I really don’t know when it’ll be here, but I know I will divert my TSP to that fund pronto once it is up and running.
September 2nd, 2008 at 10:58 pm
No worries comments are always welcome no matter when they are submitted. Roth will be nice just not sure if rolling over exicting accounts would be good or not as you would be liable for taxes then as current contributions are tax-deferred and Roth are not. Will do some research and put in a new post in case it does come down.