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Author: wo1webb Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75632  
Subject: Military Personnel and Retirement Investments Date: 12/27/1999 8:49 PM
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Being in the military puts me in a special situation in that I have no 401K to fund; I will get a pension upon completion of 20 years of service. I have maximized my IRA contributions, but overall I am only contributing $2000 annually toward my retirement.

The question is...what is my next move? What is the best place to put my money so that I can ensure I live a plush retirement?
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Author: arahfool Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 16970 of 75632
Subject: Re: Military Personnel and Retirement Investment Date: 12/28/1999 11:12 AM
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Being in the military puts me in a special situation in that I have no 401K to fund; I will get a pension upon completion of 20 years of service. I have maximized my IRA contributions, but overall I am only contributing $2000 annually toward my retirement.

The question is...what is my next move? What is the best place to put my money so that I can ensure I live a plush retirement?


Not sure how one saves enough to insure a plush retirement but keep in mind that you are not limited to investing $2000 per year. You can invest as much as you want, you just have pay taxes on the gains in the case of funds, but nothing on increases in stock prices until you sell. Lots of companies allow drips.
We are just finishing our first year of retirement, my military pension accounts for 50% of our 'income' and our current income is about 40% of my pre-retirement income. While I don't think of our lifestyle as plush , we pretty much do whatever we want to do.

arahFool



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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 16983 of 75632
Subject: Re: Military Personnel and Retirement Investment Date: 12/28/1999 12:33 PM
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Greetings, WO1Webb, and welcome. You wrote:

<<Being in the military puts me in a special situation in that I have no 401K to fund; I will get a pension upon completion of 20 years of service. I have maximized my IRA contributions, but overall I am only contributing $2000 annually toward my retirement.

The question is...what is my next move? What is the best place to put my money so that I can ensure I live a plush retirement?>>


"Best" is in the eyes of the beholder. However, in your case you have exhausted your tax-deferred options with the exception of using annuities. As to the latter, almost certainly you will do better elsewhere, and that means a taxable account invested for the long term. As to in what, most Fools would suggest equities like individually selected stocks or an S&P 500 Index fund for those who want a "no brainer" choice. You, though, have to make that choice based on your knowledge and willingness to make your own decisions.

Regards..Pixy

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Author: Seawind Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17150 of 75632
Subject: Re: Military Personnel and Retirement Investment Date: 12/31/1999 2:49 PM
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Hey WO1Webb

Welcome to the situation of a military member. I am regular to the fool and I am also trying to position myself and my family for a comfortable retirement without a 401K. It's obvious a military retirement after 20-25 years isn't what it used to be.

First of all our credit cards are paid off. No sense in having the debt. So, if you have balances, pay them off. We are also out of debt except for one loan on land for retirement.

I have several investments other than our IRA's. First of all we have converted to Roth IRAs. IF our retirement is "plush", our tax bracket will be higher, so we opted for the Roths.

We have a few mutual funds, one of which is an Index 500 fund to mirror this index. The others consist of technology and health care. They have done very well, but then again, so has everything.

Next we one a few stocks (HD, INTC, JNJ, & KO)

My next move WAS to participate in the Foolish Four or a BSP portfolio. The recent changes in the F4 force me re-evaluate this move.

The most important aspect of our goals is to CONSISTENTLY, on a monthly basis, put away money for our future.

The bottom line is keep at it and be Foolish!

Seawind

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Author: SnootFool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17524 of 75632
Subject: Re: Military Personnel and Retirement Investment Date: 1/7/2000 10:48 PM
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Hi wo1webb:

I'm also in the military & in the same boat WRT tax-sheltered investment vehicles. A few thoughts:

1. Your post implies (but doesn't state outright) that you're single. If you are married, perhaps your spouse has access to a 401K/403B plan, which you can then max out.

2. Rumor has it that Congress & the Pentagon are mulling over introducing a DOD Thrift Savings Plan (TSP) which would allow you to save up to 5% of base pay in a tax-deferred index mutual fund (among other choices). My understanding is that this fund would mimic the "C fund" S&P 500 clone currently available to Govt civilians in their TSP. So, if & when this becomes a reality, you will have a 401K (sort of) in the future. BTW, there won't be any employer matching funds either!

3. As noted in the other replies, the thing to do is start a taxable account with a deep discount broker & start an allotment into it. (Eliminate credit card debt, if you have any, as a 1st step) Try to save & invest as much as you can of each month's paycheck, for 2 reasons: 1. You'll have more $$$ in retirement (No sh*t!)) 2. It's good training for living below your means. IOW, if you can save 20% of your gross pay & still live well enough today, then you KNOW that you'll be able to retire on much less than 80% of your pre-retirement salary since you're already doing it.

4. Try to maximize your post-tax returns in the taxable account: don't trade too frequently & watch expenses (Mutual funds fees & commissions) too.

5. If you haven't already, explore the Fool website, it's got a ton of information.

Good luck,

Chris



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