I’m not the most investment savvy person on the planet so I figured I’d ask around about how much I should be contributing to my Roth IRA on my TSP. Currently I am putting in 35% of my base pay into my Roth with 80% into the C fund and 20% into the S fund. I don’t have any debt and my bills are pretty much limited to my car insurance, WiFi, cell phone bill, and streaming services. E5 at just under 8 years TIS and I’m still living in the b’s so no current rent or mortgage payments either. Planning on ETSing within the next year and a half so a friend of mine advised me to dump as much money into the account as I can now due to the advantages the TSP gives you. Thanks in advance for any tips or suggestions
How much should I invest into my TSP Roth IRA
byu/No-Profession-5996 inMilitaryFinance
Posted by No-Profession-5996
3 Comments
It’s just Roth TSP. A Roth IRA is a separate account you can open with a brokerage company l. It’s similar to the TSP though with tax advantages. 80 C/20 S is a good mix and what I do also. 35% is really good and much more than most people, but if you don’t have any other expenses then I’d put as much as you can right now. The more you put in now, the more time it has to grow and you’ll have hundreds of thousands or a million dollars in the account by the time you retire.
80/20 C/S is a good way captures the entire US market and is commonly recommended, you should be fine to leave it. If you want international stocks, add some I fund but maintain an 80/20 split of C/S.
Of note, your TSP is like a 401k, not an IRA. Ie- you have your TSP that you are contributing to with Roth dollars but you could also open a Roth IRA, they are separate accounts. It seems like you’re in a great spot financially, keep it up and don’t try to chase performance or niche investments, just stick to index funds. Read The Simple Path to Wealth, it summarizes 95% of the good information you’ll find online in one book.
Point to note: TSP and IRA are separate entities with different rules and advantages.
TSP is an excellent vehicle that I personally love. Low fees, decent options for flexing it.