UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: JAllen2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75523  
Subject: Re: Roth IRA vs. TSP (Thrift Savings Plan0 Date: 5/19/2001 11:26 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I have to tell you if you can only fund one DO NOT FUND THE TSP!!!

I to am a fellow military member and have been worried about some of the briefings I have received from various people about the tremendous opportunities TSP will provide. Without a doubt it is a great thing that the government is allowing us to do now. However, the problem with the TSP program is there is a very limited amount of investments you are allowed to do in it. I believe there is going to be a total of five different investment choices (S&P 500, International, Gov. Bonds, 2 others). A Roth IRA will allow you to invest in virtually anything. At first this is not an issue since most people put money into a nice Mutual Fund or Index fund and forget about it, but as most people will tell you in fooldom you can do much better.

The benefits of the TSP program are as follows:
1) The military is allowed to match your funds you place into the TSP program, but at this time no branch is planning on doing so...if this changes this can be a MAJOR advantage.
2) The money is pre-tax money so when you place 2K in the TSP you are only losing about 1.4K from your paycheck (assuming 30% tax bracket).

Disadvantages of the TSP program:
1) The money is taxed when you take it out (unlike the Roth IRA)
2) Limited investments you can place your money into
3) A fairly high yearly charge rate

I do not want to come out completely negative about the TSP...the program is much better (for retirement investments) then investing it yourself, because of the pre-tax advantage.

Please contact me to talk more about this program if you wish...as usual my post is more babbel then coherent thoughts.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Berkshire Hathaway

Brookfield Asset Management
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement