Hey everyone, I’m a single, 32 yo, active duty E6, 14 years in the Navy. I switched from High 3 to BRS just in case I got out early and will be 37 at retirement if I can keep this up until 20.
I just sold my condo that I bought in 2020 (pre covid) and rented out for 2 years, which was a terrible experience with a lot of financial loss. The profit is almost $194,000. Looking for advice on how to move forward.
Here’s what I’ve done so far.
– $29,500 – Debt payment (TSP Loan, CCs, Amex Loan)
– $30,000 to family (Don’t need any opinions on this. No really, please keep negative opinions to yourself.)
– $44,500 – 6 Month Emergency Savings, 3.5% APY HYSA (saw advice that this amount isn’t necessary for military)
– $20,000 – 12 month CD, 3.92% dividend rate
– $3,000 – 12 month CD, 4.21% dividend rate
– $7,000 – MMSA, 1.50 APY (for quick access)
– Upped TSP from 5% to 15% for a total of 20% with the match. I’m currently just over $59,000 in L2055 before the loan repayment. After it processes, I believe it’ll be about $65,000.
That leaves me with about $60,000. Any advice on how to maximize my savings and set myself up for retirement? I see a lot of mention in the subreddit about maxing out TSP when people get some money. Is there a way to make a single contribution or would I just up the monthly percentage?
I sold all of my stocks a few months ago for personal reasons. I don’t want to buy anymore individual stocks, but I’m willing to buy ETFs, mutual funds, etc. I also plan on using some eventually for charitable contributions/supporting my community.
Posted by MiissVee
4 Comments
You can’t contribute to a TSP if it’s not direct deposit. Like you said just up your contribution and supplement your paycheck with the extra money you have. Lastly you can open up a IRA and max that out. IRA is just your own personnel TSP account with more options. You can deposit money into that whenever you want up to 7k a year
I am not familiar with lump sum contributions to the TSP but another route I suggest is a Roth IRA. If I were you I would put all 60k in a brokerage account (ETFs or mutual funds), then each year for next 10 years transfer $7,000 from brokerage to Roth IRA.
Follow the start here: https://www.reddit.com/r/MilitaryFinance/comments/1hqdbse/start_here_military_money_101_prime_directive/
Good job on getting rid of the debt.
I hope the family support came from a place of positivity.
That 6 month emergency fund will be great for when you separate in 6 years. I’d just keep in the HYSA.
Too many CDs unless you’re saving for something specific. When they mature put that money to work in low cost, automated, diversified, simple (LADS) index fund like VTI or VT.
Open a Roth IRA and fund max this year $7k and when your CD matures next year max out again. VT or VTI is fine for Roth IRA.
Put the rest $60,000 in Vanguard, Schwab, or Fidelity brokerage. Again, VT or VTI.
You can’t lump sum into TSP, only contributions from your paycheck. Good on you for upping to 15%.
What’s the plan after you retire?
VT or VTI + VXUS. Total market ETFs. Look at Boglehead investing philosophy.