Why invest in TSP?

**MaoKhan** · 11-23-2006, 02:22 AM

Hi everyone. I'm a relatively young soldier in the military with a little more than 2 years under me. I have a Roth IRA that I max out every year but after seeing this article from CNN http://money.cnn.com/magazines/money...ex.htm?cnn=yes I can't but help to think I am possibly missing out on something huge. Truthfully I am doing very well in my Roth, up near 60% since I started it right before I joined the service. My question is would the TSP still be a better option for me in the long run? I remember being "educated" on the TSP and couldn't help but thing they were trying to make a commission off of me. If anyone could help me find a place to find out the pros and cons, I would trully appreciate it!

Richard

**weatherweenie** · 11-23-2006, 04:19 AM

If you get any kind of matching funds from the gov't you immediately double your money. That is one big reason to participate.

**SkyPilot** · 11-23-2006, 12:17 PM

There are no commission fees, and the management costs are some of, if not the lowest of any retirement investment fund in the world. See TSP.gov website for the particulars.

**Show-me** · 11-23-2006, 12:38 PM

Maokhan,

Your on the right track. IMHO max. out the ROTH first, especially if you are in a tax free zone. Use the "tax free" money to fund a Roth. Double whammy, you don't pay income tax on it before it goes in and you don't pay income tax on it when you draw it out. Principle can be used in a emergency penalty free. Discipline on the not toughing principle.

You are military so you are most likely not getting any matching fund from TSP. TSP is a great deal for Fed. Civilian employees because of the low management fees and the matching funds.

Now, this is just my opinion.

Good luck and Happy Thanksgiving.

**Ghageman** · 11-24-2006, 01:00 PM

Originally Posted by Show-me

You are military so you are most likely not getting any matching fund from TSP. TSP is a great deal for Fed. Civilian employees because of the low management fees and the matching funds.

Believe the Army is currently offering some sort of matching to new recruits only. No other services are included as far as I know. I just hope it expands and the rest of us can participate.

**James48843** · 11-27-2006, 08:26 PM

For Military it's a good deal (I've got both mil and civilian TSP accounts).

Why do it instead of your private Roth?

1. Lower costs
2. Possiblity to borrow in the future for a home down payment, at a very low cost compared to your Roth.
3. Preparation in case they do offer matching in the future. there is a lot fo talk around matching Army in the furture, so you won't miss anything if they do.