Message Font: Serif | Sans-Serif
No. of Recommendations: 1
You will probably want to go to and read through the FAQs I think to get the best summary, but here's quick answers to your questions.

I've been in the Guard/Army Reserve for many years, but have never enrolled in the TSP. Is this something I can enroll in while continuing to max out on my IRA contributions?

Probably. The closest comparison is that it's like a 401K plan, but generally with no matching contributions. The fund options are extremely low fee compared to many other 401K plans, and most of us are happy with the funds' returns. They even have lifecycle funds now.

If you make too much money :) you might not be able to deduct your entire IRA contribution, but for most of us that's not an issue.

The one caveat is that if you are deployed, and you make tax free money by working in a combat zone, you probably want to sink as much of that income as possible into a Roth IRA so its earnings will stay tax free, because if you put tax free combat pay into your TSP, its earnings will be taxed on withdrawal. The initial tax free contribution will be tax free later, but that hit on earnings would stink.

Also, what are the special benefits of the TSP? Is it like a Roth or conventional IRA? Does the government match your contributions in any way? Are there any tax benefits?

The government has authorized the services to make matching contributions, but so far I think only a couple of super hazardous MOSs qualify for the match. The tax benefits are similar to the 401Ks.

You can also later roll your contributions over to an IRA, just like you can with the 401k plans. You can also purchase a lifetime annuity.


Print the post  


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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.