I’m currently 8 years in (enlisted, AD) & plan to get out after this enlistment to be a SAHM. We plan to continue putting money into a retirement account throughout the years, but wanted to see if anyone has opinions on companies to look into since you cannot contribute to TSP once separated.
We currently both have TSP accounts, joint amex HYS, and do some investing (robinhood, we’re new to the world of investing so have kept it small so far).
Thank you! 🙂
Small background if it’s needed: My spouse is also AD & plans to commission around the time I transition out of the military. We plan on using both his pay & my (hopeful) VA % to contribute to the new retirement account in the future. It won’t be as much as it currently is but still something nice to fall back on if we need to in the future, or to pass down to our children (who we also plan to set up accounts for when they are little as well – he is currently not born yet though).
I no longer want to be in the military due to both my physical condition deteriorating & not wanting to be a mil-mil couple (with both jobs prone to long hours, constantly changing shifts, etc.) with young children. I’d be happy to get another job once they are a little older/in school full time to contribute more to the household/accounts if it ends up being necessary.
Getting out in ~4 years: what are some good companies to transfer TSP to?
byu/FormalNoodle inMilitaryFinance
Posted by FormalNoodle
6 Comments
Why would you transfer your TSP?
It’s probably the cheapest for fees you would pay anywhere.
couple options I’d consider in your shoes:
1. Just leave it in TSP. The returns are decent as index funds and costs very low. You won’t find much lower or better options at a firm.
From this, you’d just open a separate Roth IRA and put your future money there. Forgot you even have the TSP and let it grow.
2. Move it to fidelity/Schwab/E-Trade/or another firm. Put it in an index and let it ride. One concern I’ve seen is that if you have a tax exempt balance, some of these firms are hesitant to accept the account. This does consolidate your accounts, it’s just an extra step.
3. On Robin hood and after years of trading, your best investing effort is simply a low cost ETF portfolio, boglehead or something simple and similar. I’ve had my best returns with a SPY/QQQ/VYM portfolio that buys weekly. That account keeps some cash for dips like last April as well. But you could also just do VT or VTI/SCHB and relax. Edit: I’ve moved more to VT this past year to include international exposure long term. Simple path to wealth is a good read on VTI/VTSAX and VT.
4. Kiddos… research 529 vs UTMA. We have both for 10 yo twins. There are pros and cons to each, especially in financial aid calculations. Regardless of which you choose, start early and automate it. $25-50/week can grow rapidly when you have 18 years.
You likely don’t want to. Unless your new job’s 401(k) has lower fees (pretty unlikely), just leave it in the TSP.
Just leave it, you don’t have to roll it over. Open a Roth IRA and max it every year.
Leave it alone, but make sure it’s aggressively invested in C,S,I funds, not in G or something.
Open a Roth IRA for yourself and your husband. Max those out every year going forward. As a SAHM, you can contribute to your own Roth as long as you file taxes “married filing jointly” and your husband continues to have earned income from a job (VA disability pay is not considered earned income, by the way).
Make sure you get life insurance now, before you separate and have a VA rating! Get TERM insurance only for the longest term you can (30 years, usually). This is important for both you and your husband. A SAHM is worth a lot. If something happens to you, your husband will have to hire a lot of help to take your place so he can keep working. Do NOT let anyone sell you whole life insurance products telling you they are a good investment. They are not.
Contribute a modest amount to kids 529 plans. Automate this and you will have a good amount by the time they are college bound, but don’t oversave because they may end up eligible for free college via either GI Bill transfer or VA education benefits.
Finally, do the taxable brokerage and put any remaining money into that every month, in index funds. Don’t be buying individual stocks.
**Do not liquidate your entire TSP into a Roth or traditional IRA.** The bare minimum is $200, but I recommend $1000 so you can actually make a withdrawal or transfer pre-retirement if you want to.
You want access to the G-fund when you are getting close to retirement age and thereafter. It combines the best of both worlds of a bond index fund and a moneymarket fund.
You may not understand what that means right now, but trust me… you want it.