I am a military member who began saving for retirement only since 2000. I provide the only income which is about $3200 a month. I have no monthly debt. Right now my wife and I each have a Roth IRA which we have maxed out $2k since 2000. These accounts are in Vanguard's Extended Market Index Fund. We each have about $4400. We also have a joint mutual fund in the Vanguard 500 Index Fund. The value of this account is about $5K. We also have about $5K in savings and about $13K in a money market account. We plan to max out our IRAs and contribute $150 per month into the joint fund. The question I have is I can now join the Thrift Savings Plan which allows me to invest 7% in pre-tax dollars. This percentage will go up each year but there are no matching funds. Should I utilize this plan? If so, should I continue to fund my Roth IRA? If I should utilize the plan should I invest in stocks are perhaps diversify into bonds? I am not a big risk taker. I am a new investor and appreciate any advice. Thanks.

Congratulations on starting saving for retirement!

With regard to the military TSP, note that for most purposes it is very similar to a 401k plan, so most (but not all) of the advice you see about 401k plans will also apply to the TSP.

You might want to also check out the "Military Fools" board in the "Fools of a Feather" section, and repost this question (or a link back to it) there.

http://boards.fool.com/Messages.asp?mid=17349464&bid=112957

There was a lot of discussion of the TSP there a few months back when the military part was starting up, although I haven't seen much lately.


P.S. And as an aside, thank you for your part in keeping my sorry ass safe from harm.

Hi Cajag, As an aside, first, I believe the TSP has one more open enrollment period for this year. I think they have only two a month, and if you miss the open period you have to wait @ another 6 months. Besides that I think it would be auto deducted from your pay, and I believe it does take some time to stop the auto-deduction should you wish or need the money for something else. So, those are two things to consider. But, basically what I have heard about tsps, is that for the people who have no debt and can contribute and already do to a roth, tsp's can be a great extra for retirement money to be placed. The problem Ive seen is that some people have so much debt that needs to be paid off first before they can even thing about anything else, and then it goes to the roth, which seemingly is a better deal at this time for many, then the tsp if there is still extra money in your budget after paying all your other expenses. they have in the tsp a plan that is basically an s+p500 index fund i would reccommend that one as a starter fund to look at. (But, just as an aside, it seems based on how much you have in a mma, if your planning on having kids or buying a house that might be something to get all set up with first before the tsp...of course, if your planning on full military retirment after your 20 years, you may be all set without having to do the tsp at all, I guess it just needs to be taken into consideration what you have for upcoming bills and goals)

Thanks for doing such a great service for our country, it is appreciated!