Financial Management, Planning, And Retirement

[TDub]

As they say, it's never to early to start talking and thinking about retirement.

With the plethora of information out there about where to put your money, who is better than who and why etc. I am having trouble distinguishing what is better or worse.

We're all aware no one does anything for free, I'm not worried about that, but I am worried about what to do to be responsible. I myself come from a family with no military experience, I have no dependents and I have no mortgages or major lending to myself.

As I start my process into the Army I can't help but think about retirement. Questions like, should I do a traditional Roth IRA or use the militaries TSP, and how much should I be putting away, while still being able to spend and live within a comfortable means while being home. It's nothing I have any experience with and I would really appreciate starting somewhat of a discussion about it.

I am a bit paranoid of predatory financial management systems out there for active duty, or reserves. What might be some individuals experiences negative or positive with them.

Personally, being from the Pacific Northwest does anyone have any recommendations of places to check out?

Not just for myself but for anyone else that has these questions.

 

[Topkick]

I am retired from the Army, 23 years in. The pension pays my bills but that's it. TSP is pretty good, but just save as much as you can with anything that pays interest and live modestly. You can live good, have nice things, and still save. Talk to pros and stay on top of it. My .02.

 

[TDub]

I am retired from the Army, 23 years in. The pension pays my bills but that's it. TSP is pretty good, but just save as much as you can with anything that pays interest and live modestly. You can live good, have nice things, and still save. Talk to pros and stay on top of it. My .02.

I appreciate the .02, thanks. It's definitely reassuring to hear that

 

[Isiah6:8]

At some point if you start looking for an adviser, look for a person or firm who is a registered Fiduciary. This is a person who is by law required to look out for your best interest and not what will pay them the most. If it turns out they screw you, you can take them and their firm to the cleaners.

 

[Marauder06]

Lots of my friends handle their own investments, either because they're really well informed or because they don't like the idea of paying someone else to manage their money. I'm from the opposite side of the spectrum: I want to pay someone to handle all of that and just sit back and watch my money grow.

I use First Command Financial Services and have since I was a lieutenant 23 years ago (they were called something else back then, but same company). I've been very happy with them. They cater to a military clientele and many if not most of their advisers are prior service. They also seem to have locations near most military bases, even small ones like the one here at West Point.

My wife and I have traditional IRAs and fund them to the max. I didn't do TSP but if I had it to do over again, I would.

Depending on your rank, a military retirement can be HUGE. When I ultimately retire, I'm looking at more than $50,000 a year in pension. Others on this site do, or will, make considerably more. Given that some states don't tax military retirement, that gives enormous financial security and job flexibility. For example, I could take a substantial pay cut in my retirement job to do something I really love, and still maintain my current standard of living because of my pension. There are also significant health care benefits, and lots of other perks for military retirees, depending on state and location. Of course, you have to make it to retirement first...

That said, the way I understand the new retirement system, you still get "something" if you walk away short of 20 years. That wasn't how it was in the past, with the "cliff vesting" where (barring extenuating circumstances) it was 20 years or nothing.

I suggest you at least go talk to a financial adviser. If there is a First Command location near you, call them and ask for an informational appointment. You've got nothing to lose. However you do it, invest early and often, and stick with it even when the market turns temporarily bad. Compound interest is a helluva drug...

 

[Devildoc]

I suggest you at least go talk to a financial adviser. If there is a First Command location near you, call them and ask for an informational appointment. You've got nothing to lose. However you do it, invest early and often, and stick with it even when the market turns temporarily bad. Compound interest is a helluva drug...

This whole section times a billion, the highlighted part, more than that.

 

[Marauder06]

Also, I totally forgot to add a plug for the new GI Bill. Those benefits, which take time to fully vest, can be life changing.

 

[SpitfireV]

To add to that last line of Mara's; Diversify. Spread the risk.

 

[Marine0311]

Plan early.
Mind your own shop.
Do your homework
Stay out of debt.

 

[Gunz]

My wife and I put everything we had--which wasn't an extraordinary amount--and got a big-ass loan and bought some land in the country, upon which we have built a home and a farm.

The general premise is, population grows, land is a finite resource, if you hold on to it long enough it might eventually be worth a lot more than you paid for it. Theoretically.

Plus you can build your own gun range.

 

[Isiah6:8]

To add to that last line of Mara's; Diversify. Spread the risk.

Agree that over time this should be the idea, but not early on.

It is all about time horizon when looking at retirement. If you are in your early stages of putting money away for retirement, it is not actually necessary to be wholly diversified.

Over time, as the contributions stack up there should absolutely be diversification to protect the money put away. But, there is no problem in the first few years to allocate 100% to a risky asset class like equities and be non-diversified. Because due to the time horizon, the initial contributions have the longest time to use, therefore, can be exposed to the most volatility.