CDR Salamander recently blogged about a Washington Post article that reported only about 36.1% of active duty military are enrolled in the Thrift Savings Plan. While I agree with the CDR that the remaining 63.9% are screwing themselves, I can sort of relate to why it’s not so popular. I originally enrolled in TSP sometime in 2001, not because I wanted to, but because my command made me. Whether they could legally do it or not, they did, and I complied. At that time I didn’t understand anything about it, but they said they were looking out for me so I didn’t care.
A couple years later I’m hurting for money as I’m a junior Sailor who is still living paycheck to paycheck. I learned something new around that time…I could take a loan from TSP. I took out $3,000 and blew it on crap. A couple months later I stopped my TSP contributions all together. I was still paying back the loan, but as a young guy, it’s hard to put money into something you don’t understand and that doesn’t feel tangible. A year later I was looking to invest, but everything confused me. There was so much conflicting information on the Internets, that I just said screw it and started TSP again. I still knew, and to this day, still know very little about the inner workings of TSP, I just figure it couldn’t hurt to contribute to it.
So after reading CDR’s post about it yesterday, I went to the TSP.gov website to see if I could log-in and check my current account status. Needless to say, TSP has one of the coolest and user friendly websites…of 1994. I clicked on the link for my account access, but of course I don’t remember it. So I went to request my account number by e-mail. Problem…you can’t get it via e-mail or the phone. No, you have to have your account number mailed to your address on record with TSP. That would be mother’s house in the US. So I essentially have to wait until the letter gets to my mother’s house, hope she doesn’t throw it out, and then wait for it to be mailed to my ship. Since I didn’t know my password, I thought I’d have that mailed as well. Oh wait, I need my account number to request my password by mail. So, I have to wait for them to mail my account number to the US, then mail it to my ship. THEN I have to go to the TSP site, and request my password be mailed again to my mother’s in the US and then to my ship. So I should have everything in, oh, three months. At which point I’m sure I’ll have completely forgotten I even wanted access to my TSP account. Brilliant!
Sure, I know I should care more about my future, but right now I’m just too busy. I might be more inclined to take it seriously if I actually understood more about it. Whenever I ask someone about it, I just get a bunch of opinions and guesses. If I understood the different options I could select, or could calculate how much money I’d have if I saved for n number of years, then maybe I’d be way more involved. I know I should, but it’s much easier to just say I’ll learn the stock market tomorrow, or I’ll call NavyFCU and figure out what a Roth IRA is next week.
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LOL @ “…of 1994.” I find that most government websites tend to be the same way. If I can’t find what I am looking for in under 30 seconds, I leave, which pretty much explains away a good chunk of the reason I know so little about Navy practices, even after five years of marriage.
As for investing, I’m bad with numbers, but I do understand the benefits of starting young. A few years ago we started a Roth IRA with USAA, and even though I don’t know much more aside from the fact that we put money in every month, I do know that their website is at least up to 21st century standards. If you don’t go with NFCU, check out USAA.
Posted 02 Jun 2008 at 6:41 am ¶Ahhhh Jim, to be young! It is hard my friend, but once I got my act together and sacraficed some beer money, I now have a little something growing for me. As far as the TSP, been putting money into it every month since about 2003. Holy shit!! I have a bit of money in there and it continues to grow. Don’t give up, give NFCU or USAA a call.
Posted 02 Jun 2008 at 8:11 am ¶I thought about joining when I was in, but when I compare it to the Mutual fund I belong to I realized I’d get screwed in the end. You should look at all you options, and not trust the the Navy has your best interests at heart.
Remember when the Congress mandated full tuition payment in the top up program and the Navy said, but the Congress said pay it… what they do? They said ok only up the 750 for classes……hmmmm U of Maryland…..
Posted 02 Jun 2008 at 2:18 pm ¶Don’t give up man, just think there is something actually working for you, you’re money for a change. I know very little about TSP myself but it’s like a mutual fund (I’m taking a guess from what I’ve seen).
I would suggest getting your address changed so you get your mail. I know a scary thought but TSP mails an “Annual Participant Statement.” I found our 2007 statement and it tells you pretty much everything, account summary, balance history, distribution (what funds your money is going into), contribution allocation, activity summary by fund and contribution summary.
Don’t know if you bank with NFCU but you should see if they can be more helpful with info on TSP or any other investment plans.
Posted 02 Jun 2008 at 2:25 pm ¶Don’t invest through Navy Federal for investments; try USAA instead. One of the more investment savvy guys in the office was telling us that Navy Federal runs it through another company, so in reality, you are paying twice as much in fees as you normally would. They had a much better opinion of USAA–and I have never had any problems with USAA at all when it came to my insurance. Also, DO NOT, DO NOT invest with a company called First Command. You’re better off blowing all of your money on Dobuita Street.
The other thing too about TSP is that you can choose where you have your money invested; there are certain plans where its focus on domestic (U.S.), international, a bit of both. I’m in the same boat as you as I dont know where my information on my TSP account is located. Probably shredded somewhere…
And to be honest, I never liked how COs at DITS would grill the LCPO, DIVO and DH as to why everyone was not on TSP which would lead to pressuring guys to sign up for TSP. I understand its important to save, but that’s not the way to go about it. It isn’t a required qualification for advancement.
Posted 02 Jun 2008 at 5:05 pm ¶Jim,
Google TSP and you find loads of info to educate yourself so that when the 3 months is up, you can make an informed decision about whether or not to participate.
I’m certain there’s a TSP calculator out there somewhere and I’m sure the TSP.gov website will break down the different fund options available. Contrary to popular belief it’s not a Mutual Fund. It’s more indicative of a Roth IRA in civilian terms.
Basically, something to offset the measly Social Security check you’ll recieve as a geezer. And yes, I stopped participating years ago and put my money into a Roth IRA because I’m seperating and don’t plan on working for the government. (TSP is transferable if you get a federal job after military service).
Posted 02 Jun 2008 at 10:35 pm ¶Tony, I’ve heard that same thing about USAA. I really should check that out myself. Thanks for reminding me…
Posted 03 Jun 2008 at 3:48 am ¶I heard the L2040 fund is the best one to invest in on TSP.
Posted 03 Jun 2008 at 8:00 pm ¶TSP is more like a traditional IRA (not a Roth) in that deposits are tax-deferred, i.e. you don’t pay any taxes on the money you invest until it’s withdrawn later (hopefully at a lower tax rate). If you invest the maximum deferrable amount each year– something like $15,000 for 2008– you won’t pay any taxes on that $15k. If you’re in the 15% tax bracket and invest the full amount, you’ll be paying $2250 less in taxes.
Unlike a traditional IRA, however, you’re eligible to withdraw the funds you’ve invested upon separation from the service without penalty, regardless of age. The amount you withdraw that year is simply reported as regular income and taxed accordingly.
The “best” funds are simply dependent on your investment time horizon: the sooner you plan to get out/retire (i.e., the sooner you need the money), the better it is to invest in lower-risk fixed-income or govt sec funds. Those with longer time horizons would do better to invest in more aggressive funds that can beat inflation (mostly stocks). The “L” funds seek to automatically allocate your money based on your age and investment horizon, but the “L” funds are projected over your “L”ifetime– someone planning to get out of the Navy soon and go to school on the GI Bill and live off their TSP account would be better served to invest in the “G” fund.
But don’t take my word for it… it’s YOUR money, conduct your own due diligence.
Posted 04 Jun 2008 at 8:27 pm ¶The same shit happened to me last week. The only difference is that mine has to go out to the Kitty Hawk and then forwarded on to me here in the states. Who knows if both pieces of mail will ever make it.
Posted 04 Jun 2008 at 11:48 pm ¶Post a Comment
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