Late to the game

This topic contains 1 reply, has 2 voices, and was last updated by  TS Paul 4 years, 5 months ago.

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  • #16178

    Scott

    With only 3 yrs until retirement from the military I’m finally giving TSP a chance. A bit disappointing the only way to fund the account is through paycheck deductions as we have money in savings that can be used to fund investments. With that being said what is the best way to take advantage of fully funding TSP as well as utilizing the money in savings? Thank you for any advice you can offer!

    #16184

    TS Paul
    Keymaster

    Bear in mind that I am strictly forbidden from giving individual advice and you absolutely should treat this as just one guy’s opinion in a big universe full of other sources of information.

    In that hypothetical situation I would maximize my TSP by contributing the max to take advantage of the opportunity, even if that meant that some of my living expenses had to be paid out of the savings you mentioned. The tax advantages are just too important to pass up.

    It doesn’t sound like you are in that situation and you can max out your TSP and also invest in other vehicles as I do. Each year I create what is called a “backdoor Roth” (just Google those words for lots of instructions). That will get you another $5500 in a tax advantaged account ($6500 if you are 50 or older).

    And then the rest just goes into a regular brokerage account.

    Most of my Roth and other outside account investments go into ETFs which largely mirror the Thrift Savings Plan funds which I am invested in during that phase of the business cycle. The rest go into a mix of different investment strategies I pursue, mostly individual stocks I believe will outperform the market for one reason or another, but also including a bucket of dividend paying stocks.

    Good luck out there.

    The TSP Allocation Guide www.TSPallocation.com

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