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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: investing for retirement!! Date: 9/5/2011 11:26 AM
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Your most pressing need at your age and point in life, is to control your debt spending. This is all about lifestyle and behavior modification. Like an obese person, it does no good to buy an expensive weight loss program, only to gradually put the weight back on afterwards. This is more important than directing $$ into your TSP or IRA and what kinds of mutual funds you should be invested in. Unlike Congress, you've got to keep your spending within your means. If you don't, eventually you will have to direct much/most/or even all of your discretionary household income towards your debt and with the threatening letters you start getting from debt collectors, you may start to invade your retirement savings (yes, you can access your IRA dollars prior to 59.5...you would be assessed a 10% penalty and have to include your withdrawals as ordinary taxable income for that year). I know many in retirement who are very comfortable with large retirement plan balances....all of them have learned not to carry debt, but to pay off all credit cards when the bills come in...and they all seem to have learned this at a young age.

In your early years, you may not be able to afford to buy your car with cash, thus you may have a car payment. And if you become a homeowner, you won't be able to pay cash for the house, you'll have to carry a mortgage. After this, you should carry no debt. Credit cards are convenient...but you should pay off the balance every month. If you cannot discipline yourself to do this, cut up the cards and use either cash or debit card.

Pay yourself first by doing a payroll deduction to your TSP to at least the amount of the match. After that, you can either contribute to your traditional IRA (if its deductible to you) or your Roth IRA if your TIRA is not deductible. Deductibility of youy TIRA contributions is allowable if your adjusted gross income is less than $56,000 for 2011, which it sounds like you would qualify. You should be able to do this through payroll deduction also. Get used to not having this contributed income and living on what is left.

I agree with the above poster that disability insurance is important to someone like you. But you sound like you might be FBI or one of the Federal Agency law enforcement officers (Park Police, Treasury Police, etc). You should have a generous disability policy (although I'll bet not as generous as the military's... :-), but you'll need to check with your personnel office.

BruceM
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