• Thrift Savings Plan among best investments

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  • David Vergun | Army News Service
    WASHINGTON — One of the wisest financial choices a soldier can make is to opt in for the Thrift Savings Plan program, said Henry Manning.
    Manning, operations officer for the assistant secretary of the Army for Manpower and Reserve Affairs, said that TSP is somewhat like the highly popular 401K plans offered at many civilian jobs, but is actually much better.
    Like the 401K, the TSP is a way for income to be tax-deferred, he said. The good part about TSP is that unlike some other plans, there are no management fees tagged on and TSP has had a strong performance record over the years.
    Perhaps the biggest advantage of TSP is that the government will match a soldier’s contribution, up to 5 percent, he said.
    Also, TSP can be customized to meet the soldier’s individual needs, which could be a specified mix of stocks, bonds and/or the more conservative savings fund. He noted that the customization can be altered without penalty at any time.
    The drawback of not opting for TSP, Manning said, is that after separating from the Army, soldiers will not have those retirement savings to fall back on and no money to show for their valued service.
    Manning disclosed that he has had a TSP account for a number of years and other Army personnel he knows take advantage of it as well.
    Manning suggested speaking with a financial counselor at Army Community Service who can help soldiers customize where their TSP funds are directed. That’s why beginning the process now is important in order to more quickly take advantage of this.
    He emphasized that opting in to TSP isn’t automatic. Each soldier needs to individually enroll and specify the percentage of contribution.
    For soldiers who came into the Army Jan. 1, 2018, or after, the government will match 1 percent of contributions after 60 days of service. After two years, the government will match up to 5 percent of contributions, he said, noting that soldiers who entered the Army before this year can immediately get up to 5 percent matching once they enroll in TSP.
    Sgt. Laura Martin, who has a TSP account, showed how easy it is to enroll. She pulled up her MyPay account, which has a TSP option to select with instructions on enrolling either in a traditional TSP, which is tax-deferred, or a Roth TSP, which is not tax-deferred. Martin’s husband, also a soldier, has a TSP account as well. She said the two of them took out a TSP loan, which is interest free, to pay cash for a house they intend to live in upon retirement.
    Manning concluded by saying the vast majority of soldiers do not stay in for 20 years to take advantage of a traditional retirement pension. That’s why enrolling in TSP makes perfect sense.
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