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Old 11-10-2013, 06:00 PM
  #21  
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Yes. ROTH TSP as mil is a good deal. Tax free month = Tax free in = Tax free out with free growth. A will deal all around.
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Old 11-10-2013, 06:11 PM
  #22  
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Originally Posted by block30 View Post
Hello all, I apologize for crashing the thread, but he's a real noob question(s); as a guardsman, is it worth getting into TSP? I have an American Funds Roth IRA since high school, and Roth 401k with small match from my civilian employer. Is there any reason to get into TSP, or should I instead just use the same amount of money to put in my American Funds IRA? Also, I notice you talk about Vanguard. What do you think of them? Vanguard has piqued my interest, but I believe their initial investment minimum is $3,000. If I were still single, no problem. But with anything now, my wife nixes just about any spending I do.
The TSP, in my opinion, is excellent. It doesn't overwhelm the novice with a huge list of choices. The expenses are extremely low. It allows you to invest in a diversified portfolio. As I've said before, I wish I had the TSP at my work. And I certainly wish my wife's crappy, expense laden plan was a TSP.

I would NOT invest any more money with American Funds, ESPECIALLY if they are charging you a 5.5% front end load. The only good thing I can say about American (in my opinion) is that for an actively managed company, their big funds have done pretty OK. If you have to invest in an actively managed fund family, you could have certainly done worse.

If it were my money, I would do what is called a "trustee to trustee" transfer and roll whatever money you have with American and put it into a similar Vanguard index fund, which will have much lower costs and will likely outperform its actively managed peers anyway......and no lame a$$ loads!!! If you do a "trustee to trustee" transfer, it will be a non-taxable event if done correctly. I believe the trustee to trustee transfer my get you around their minimum account balances but not sure.

Tell you wife you're not "spending." You're investing. Big difference.
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Old 11-10-2013, 06:43 PM
  #23  
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Just as FYI, a few TSP trading sites are out there. Obviously its up to the TSP participant to manage his own funds

TSP Pilot

The Fed Trader

TSP Talk
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Old 11-11-2013, 07:14 AM
  #24  
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Thanks everyone for then input, I really do appreciate it! I try to get signed up soon...first baby is on the way really soon, so things will be a little hectic. And global, as far as what you are saying, I totally agree. The trouble is my wife's dad got burned in some investment years ago, and ever since he told his kids to stay away. So my wife's plan was to just put money into your savings account and CDs.
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Old 11-11-2013, 08:11 AM
  #25  
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Originally Posted by block30 View Post
Thanks everyone for then input, I really do appreciate it! I try to get signed up soon...first baby is on the way really soon, so things will be a little hectic. And global, as far as what you are saying, I totally agree. The trouble is my wife's dad got burned in some investment years ago, and ever since he told his kids to stay away. So my wife's plan was to just put money into your savings account and CDs.
Yikes! Well those savings accounts and CDs are NCUA or FDIC insured. The government bond fund is insured by that same entity.....the US government. At the very least you'd probably want to put money in a government bond fund rather than a savings account or CD.

And with a little one on the way, once he/she gets a social security number, you'd want to consider opening a 529 plan for his/her future college expenses. Good luck.
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Old 11-11-2013, 10:51 AM
  #26  
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Originally Posted by block30 View Post
Hello all, I apologize for crashing the thread, but he's a real noob question(s); as a guardsman, is it worth getting into TSP? I have an American Funds Roth IRA since high school, and Roth 401k with small match from my civilian employer. Is there any reason to get into TSP, or should I instead just use the same amount of money to put in my American Funds IRA? Also, I notice you talk about Vanguard. What do you think of them? Vanguard has piqued my interest, but I believe their initial investment minimum is $3,000. If I were still single, no problem. But with anything now, my wife nixes just about any spending I do.
I am 54. Between my wife and I we have IRAs, Roth IRAs and my 401k. All are set up as brokerage accounts (meaning that we can buy and sell just about anything). I think that we would be considered to be fairly knowledgeable, and have both picked stocks and used options (mostly selling covered Calls and buying protective Puts). We have done OK over the years.

My wife also has a TSP account. It is very, very impressive. And after years of watching it sit there and simmer I finnally got it. Fees kill you in the long term. You are not, without great luck and risk, going to beat the market over the long term. Individual investors are just chum in the water for the professionals.

So we not only use the TSP, we have gone that route with everything. I selected an asset allocation that I felt was appropriate for our situation, and then created it across all of our accccounts using very low cost index funds and ETFs. Just like what the TSP offers. This is very simple, takes little maintenance and is not going to blow up on me. I don't have to worry about some MBA investing "my" mutual fund in the Pakistan pork belly market, CEOs leaving for Israel with the company cash or CFOs who have created financial houses of cards.

So: Select an asset allocation. Fill it with low cost index funds and ETFs. Rebalance once a year. Adjust the allocation model every 5 years. Not only max the TSP, use it as the standard for everything else.

Another major advantage of the TSP is that it's annuities are excellent. These are not the annuities of various forms that crawl out of the sewers around Wall Street, but the simple single payment annuities that at are in effect retirement plans. These are going to become more and more important in a world of self financed retirement, and the TSP's are by far the best that you are going to find. Again, fees are critical. This is not something that you need to do anything about until your actual retirement, but at that point you need money in the TSP in order to have this option.

So TSP? Absolutely!

As for your wife, perhaps she is wary of you trying to invest aggressively. She may have friends who have had spouses lose money in the market. But most women fear living on cat food in retirement, so it should not be hard to get her onboard with a retirement plan (yes, I am being a bit sexist here). Emphasis on the word "plan". And she might be more comfortable with a passive index approach as opposed to one that involves active management.

Sorry for the long answer. And best of luck.
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Old 11-11-2013, 05:02 PM
  #27  
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Thanks again for the responses. Global, I am indeed looking into 529s. Begrudgingly, my wife has let me do some investing. I think she is also pleased and reassured with what I was able to squirrel away back in 2008 when the market tanked...that has now more than doubled.
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Old 11-19-2013, 04:30 PM
  #28  
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Ok, so I am looking at TSP information, and it looks like TSP has a really low expense ratio (.027%). I am looking at my American Funds, of which I have five different funds, and their expenses according to MorningStar range from a touch over 1.0% to .8%. My funds also have a load of 5.75. Is the difference in load and expense why TSP comes highly recommended?

As always, thanks everyone. Also, I did go into mypay and start a percentage contribution to the Roth TSP. Being able to do that electronically is nice, especially for a traditional guardsman living away from base. I'm excited to get this started!
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Old 11-19-2013, 09:07 PM
  #29  
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Originally Posted by block30 View Post
Ok, so I am looking at TSP information, and it looks like TSP has a really low expense ratio (.027%). I am looking at my American Funds, of which I have five different funds, and their expenses according to MorningStar range from a touch over 1.0% to .8%. My funds also have a load of 5.75. Is the difference in load and expense why TSP comes highly recommended?
Yup, that's why I wouldn't touch American Funds with a 10 foot pole (or any loaded fund). You're paying American Fund salesmen 5.75% of your money, up front, for the "privilege" of investing in their funds. Then you're paying another 1/2 to 3/4 percent in higher expenses EVERY YEAR, year after year, whether the fund does well or not, over what you would pay in the TSP. That's a lot of drag to overcome. I'd ditch the American Funds ASAP if they were mine.
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Old 11-20-2013, 06:28 AM
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