Mission Your Money: Military Retirement Savings
It’s never too late to kick start your retirement savings. June Walbert shows you how to get started with the Thrift Savings Plan.
It’s never too late or too early to kick up your retirement savings. So if you’re behind or just eager to get it started, consider the Thrift Savings Plan. Here’s how it works. The annual contributions limit to the saving plan is $16,500, but did you know it jumps to $49,000 for military members serving in combat zones?
The Thrift Savings Plan, or TSP, is a long-term retirement savings that supplements military and other pensions.
There’s all kinds of benefits to the plan. This could be the perfect perk for you.
TSP contributions are not currently subject to income tax. You don’t pay taxes on the contributions or earnings until withdrawals begin.
The TSP is a great way to invest automatically. Money gets deposited directly from your paycheck and investment choices range from stable government securities to foreign stock.
Another plus, you can choose a diversified mix of these investments with Lifecycle or “L” funds, which contain a mix of the available options. And guess what, the L funds are automatically rebalanced for you.
If you’re over the age of 50, you can make catch-up contributions of up to $5,500 a year.
Once you separate or retire from the military, you can roll your TSP into another retirement savings account. For more on that, go to www.tsp.gov.
For Mission: Your Money, I’m June Walbert.