Iraq bound

[8_percent]

Hello, everyone. I just posted an introduction in the new member section and wanted to come here as well. We will depart for Iraq soon for a year long deployment. While deployed my plans are to max the TSP, take advantage of savings deposit program and basically save as much as I can. What are some of you guys/gals thoughts? Thanks!

[KevinD]

My thoughts are...




































THANK YOU FOR YOUR SERVICE!!!

[8_percent]

KevinD, thanks. Have a happy New Year!

[Diesel]

8 Percent,

Welcome to the boards. You're in the right place to learn all that you can about managing your TSP. Thanks for your service and be safe over there.

I'm currently at Camp Liberty (Baghdad), retired US Army and working as a DA Civilian now.

Everyone on this site has their own process for reasoning the way they contribute to their TSP. Learn as much as you can, by reading the boards, and asking questions, and determine which process fits your risk model.

[Harley69]

I can't really give you any advice, except to say take care of yourself and thank you.

Good luck!

[JTH]

The best advice I can give is to use a long-term approach with your allocation while deployed.

Think of it like this, if you had zero access to news and the internet for a year, what allocation would you choose during that time?

During my last deployment, I left everything in the I-fund. At the time the market was still bullish, but slid down the entire time I was deployed. Most of my access to TV was at the chow hall, and my internet was either slow, or completly broken, for weeks at a time.

While deployed, I worked long gruesome hours and had little time, nor desire to do my TSP homework.

Cheers and good luck!

[Steadygain]

Hello, everyone. I just posted an introduction in the new member section and wanted to come here as well. We will depart for Iraq soon for a year long deployment. While deployed my plans are to max the TSP, take advantage of savings deposit program and basically save as much as I can. What are some of you guys/gals thoughts? Thanks!

There are few things in life that compare to honorably serving your country and being a good soldier. So my first thought is "You will always carry yourself in a better way and be proud of being a veteran".

While in the Military you have the advantage to save like never before because all the essentials are provided. Give yourself a little treat but stock up big time and let your earnings add up.

You should always MAX the TSP - put as much as you can possibly put in and get use to living on what's left over. I put in 16% and with the 5% matching that's 21% of my income. Just make sure you don't exceed the limits which I think is $15 - 16K.

Hope all goes well and we'll rejoice when you return.

Steady

[PessOptimist]

Thanks for serving!

I am no expert on this but it seems to me that a Roth IRA might be a good thing too as I believe your pay will be tax free and the Roth withdrawal will be tax free later. Someone who knows for sure, can you help?

[Harley69]

You have to check to see if the Roth will accept tax exempt money. Some plans do, some don't. If they do, it's a great idea but the interest earned from the tax exempt amount will probably still be taxed on withdrawal. The IRS isn't THAT nice!

[roskopfm]

Tax exempt money can be contributed to the TSP, earnings willl be taxable when withdrawn. You cant transfer this money to a Roth since its a quazi (mix) of pretax/exempt money, it wont work.

[PessOptimist]

8%, did you ever get an answer or figure out putting tax free income in to a Roth IRA and then witdrawing it tax free?

[8_percent]

PessOptimist and others

I've been here for 7 months now and so far been contributing 60% ($2379 mo) of base pay for a total over $16600, all in G-Fund(mistake). I should've allocated to C,S,I or at least L2040 fund. I missed out on some decent gains.

Roth IRA contributions are tax exempt as well. My next mission over the next 5 months is to max my wife's and my RIRA. Take care.

[JTH]

Yes you might have missed out on some decent gains, but you also missed out on some substancial losses and gained 1.37%. Had you been invested prior to March, you might have bailed out at the bottom and taken a big hit.

I have to admit, that 60% contribution is impressive! :D

[8_percent]

JTH

You're right about the comment of decent gains and substantial losses. Thanks for the protection of the G-fund. With 8 yrs left in the Army, I'm playing catch-up on retirement savings. Thus, the 60% contribution. I'm trying to get my soldiers to not make the same mistake (not saving for retirement) as I did as a young soldier. Because of that, IOT reach my personal goals, I have to max out TSP/RIRAs for the next 8 yrs. Take care.

[PessOptimist]

8%, stay safe. And congrats on the agressive savings!

I am curious about something though. You are putting tax exempt income (part of base pay) in to TSP as an allocation. When you withdraw money later, are the earnings only or the entire amount (including allocation from tax exempt base pay) taxed at the then current rate? How do you keep track of this?

I may have missed the answer somewhere. Inquiring minds want to know.

[anthony]

If I were you, my priorities would be:
1 – Roth
2 – TSP
3 – SDP
4 – Child’s college savings plan (529) if applicable

1) Roth IRA maximization - the tax benefit is greatest here. Contributions from CZTE pay are tax free and the earnings are nontaxable upon withdrawal. Prior to deployment consider converting your Roth account into a self-directed brokerage Roth account; then consider investing in ETFs from Trader Fred's long term approach models. Too many people get steered into dud mutual funds sponsored by the bank where they set up their IRA.

2) TSP Contributions - tax exempt pay is always tax exempt, but you will be taxed on interest earned on the tax exempt pay, upon withdrawal. I agree with the others, keep a long term horizon. It is very challenging to stay in tune with markets while deployed. Set your desired fund allocation before you go, and make sure you adjust you contributions allotments to make sure money is going on autopilot into the fund you want it to, so you can take advantage of dollar cost averaging.

Also remember, if you reenlist overseas and you want a portion of your bonus to go into TSP (highly recommended), you need to adjust your TSP contribution allocations on MyPay. Prior to receiving you bonus, you need to modify the percentage of your bonus pay going into TSP. If the bonus hits your bank account before you do this, you will not be able to put the bonus back into TSP later. If necessary, tell disbursing to delay the bonus payment until you can set everything up properly.

3) SDP Participation - interest earned on the $10,000 in SDP is taxable. Best thing is it is guaranteed interest that exceeds any CD or bond guarantee. No matter what the market does this will net you 2.5% per quarter. Plus it is liquid money – you have access to it whenever you want, unlike a retirement plan contribution like IRAs or TSP.

You'll have to excuse me if you already are familiar with SDP, but for the benefit of all, here are some SDP tips and myth-busting:
- In order to maximize gains you need to get the full $10,000 into SDP as soon as possible. You can actually have more than $10,000 in the account, but interest is only earned on $10,000.
- Used to be you could not make deposits until you had been in theater for 30 days. This rule was up for review and possible change. Do some research and get your money in earlier if possible.
- For me allotment method is least preferred. You CAN write a personal check to any disbursing office or representative to deposit your money directly from a bank account. Do NOT let some untrained disbursing agent tell you otherwise.
- Make sure you get a copy of the form documenting your check deposit. Keep it safe (mail it home if necessary).
- Even if you have $10,000 sitting in your checking account, you cannot write a check to deposit money in SDP for more than the total amount of your base pay. So, this check writing method may take a couple of months to accumulate, but I still think it is better than allotments. You have more control using the check writing method. But, use allotments if your access to disbursing is unpredictable/nonexistent (not likely in the current operating environment).
- Write your checks for SDP on/after the 9th day of the month. That way you will get monthly interest from your bank as well as SDP.
- Remember, if you can afford it, leave your money in SDP for 90 days after return from deployment. It earns 2.5% per quarter, including one quarter after you redeploy.

Last thing: If you haven't been already, get yourself and your men into a counseling session with your base's financial assistance office prior to deployment. These are free trained financial counselors who can better steer you on the programs above as well as other programs out there. Also consider getting the rest of your unit into the Military Saves Program (http://www.militarysaves.org/).

Good luck & Semper Fi

ps - I'll be in Diyala Province in about a month. Where are you headed?

[James48843]

Hello 8%:

My best advice is this---- If you have TIME, then use TIME to your best advantage by diversifying out of just "G" fund, and into exposure in stocks to some extent. The L funds are a great way to do it if you are not comfortable being in either the C, S or I alone. The L funds, aimed at the year you want to access the money, are taylored to give you both the ability to gain some of the benefit of a stock, and some of the benefit of the fixed investments. If you are not up to risking your money purely in a stock play, but you DO want to get some of the higher return potential, then by all means park your money in an age appropriate L fund for a while, and see what happens.

I am pretty much convinced that we've seen the low for now on the stock side. We may get some swings down as well as some swings up from this point here- but if you've got at least nine years before you are going to ever even think of touching any of this money, then you have long enough horizon to break out of the "G" - and need to get better returns elsewhere.

In the history of the U.S.- there has never been a 10 year period where stocks did not out perform the "G" fund. There have been several FIVE year periods of downturns where that hasn't been true. But at the TEN year timeline, and longer, you are pretty much always better off with some stock risk in your portfolio.

Talk to a USAA investment advisor as well- I've been a USAA member since OCS in 1990, and can tell you that I have had nothing but positive experiences with them.

Good luck, and thank you for your service.

[8_percent]

James and others

Thanks for the advice. Due to my circumstances and not much time on hand, I will IFT from G to either L2040 or L2030 fund next week. I need to do more reading and research on both funds. The C,S,I all have nice YTD gains. Again thanks and take care.

[Intrepid_Timer]

I put my carry-on in the luggage compartment and sat down in my assigned seat. It was going to be a long flight. 'I'm glad I have a good book to read. Perhaps I will get a short nap,' I thought.

Just before take-off, a line of soldiers came down the aisle and filled all the vacant seats, totally surrounding me. I decided to start a conversation.

'Where are you headed?' I asked the soldier seated nearest to me.
'Petawawa. We'll be there for two weeks for special training, and then we're being deployed to Afghanistan

After flying for about an hour, an announcement was made that sack lunches were available for five dollars. It would be several hours before we reached the east, and I quickly decided a lunch would help pass the time...

As I reached for my wallet, I overheard a soldier ask his buddy if he planned to buy lunch. 'No, that seems like a lot of money for just a sack lunch. Probably wouldn't be worth five bucks. I'll wait till we get to base.'

His friend agreed.

I looked around at the other soldiers. None were buying lunch. I walked to the back of the plane and handed the flight attendant a fifty dollar bill. 'Take a lunch to all those soldiers.' She grabbed my arms and squeezed tightly. Her eyes wet with tears, she thanked me. 'My son was a soldier in Iraq ; it's almost like you are doing it for him.'

Picking up ten sacks, she headed up the aisle to where the soldiers were seated. She stopped at my seat and asked, 'Which do you like best - beef or chicken?'
'Chicken,' I replied, wondering why she asked. She turned and went to the front of plane, returning a minute later with a dinner plate from first class.

'This is your thanks..'

After we finished eating, I went again to the back of the plane, heading for the rest room.
A man stopped me. 'I saw what you did. I want to be part of it. Here, take this.' He handed me twenty-five dollars.

Soon after I returned to my seat, I saw the Flight Captain coming down the aisle, looking at the aisle numbers as he walked, I hoped he was not looking for me, but noticed he was looking at the numbers only on my side of the plane. When he got to my row he stopped, smiled, held out his hand and said, 'I want to shake your hand.' Quickly unfastening my seatbelt I stood and took the Captain's hand. With a booming voice he said, 'I was a soldier and I was a military pilot. Once, someone bought me a lunch. It was an act of kindness I never forgot.' I was embarrassed when applause was heard from all of the passengers.

Later I walked to the front of the plane so I could stretch my legs. A man who was seated about six rows in front of me reached out his hand, wanting to shake mine. He left another twenty-five dollars in my palm.

When we landed I gathered my belongings and started to deplane. Waiting just inside the airplane door was a man who stopped me, put something in my shirt pocket, turned, and walked away without saying a word. Another twenty-five dollars!

Upon entering the terminal, I saw the soldiers gathering for their trip to the base.
I walked over to them and handed them seventy-five dollars. 'It will take you some time to reach the base.. It will be about time for a sandwich.
God Bless You.'

Ten young men left that flight feeling the love and respect of their fellow travelers.

As I walked briskly to my car, I whispered a prayer for their safe return. These soldiers were giving their all for our country. I could only give them a couple of meals. It seemed so little...

A veteran is someone who, at one point in his life, wrote a blank check made payable to 'The United States of America ' for an amount of 'up to and including my life.'

That is Honor, and there are way too many people in this country who no longer understand it.'

[OMA]

Thanks for the story. There were times while in Afghanistan that I thought the majority of Americans wake up, go about their day, and go to sleep without even thinking that there are thousands of soldiers working hard in both Iraq and Afghanistan (many in harm's way). Its nice to see acts of appreciation like in your story.

[tsptalk]

You are probably right OMA. We need to be more aware of the great things the military is doing on foreign soil so that Americans can be safe at home. Too bad the media ignores you guys too, that is unless something goes wrong.

Thanks for your service!

[nnuut]

You are probably right OMA. We need to be more aware of the great things the military is doing on foreign soil so that Americans can be safe at home. Too bad the media ignores you guys too, that is unless something goes wrong.

Thanks for your service!

Our Military is the BEST and we really appreciate what you are doing, been there!!:cool:

[8_percent]

All

Me and my men are finally back from a 1 yr deployment in one piece:D! Actually we are 3 weeks short of 1 yr. However, we're grateful to be home for Xmas to spend with family and friends. I want to express thanks and acknowledge the brilliant members of this site. The information shared and provided at TT gives one a roadmap to financial independence. In 2009, financially I met the goals I set out to accomplish. In 2010, I want to contribute more, so I'll add 5k ee bonds to my plan. My investments are conservative due to retirement w/pension from military. What are your suggestions and advice. Thanks!

2009 goals
1) TSP - contributed over 16.5k
2) RIRA - contributed 10k to his/her
3) I-bonds - purchased 5k

2010 goals
1) TSP - 16.5k
2) RIRA - 10k
3) I/EE bonds - 10k

[tsptalk]

Welcome back 8 percent! Thanks for your service!!

[WorkFE]

Welcome home 8% glad you all are home.
Have a great well deserved Holiday.

[nnuut]

LIkewise 8%, good to have you back!:D

[OMA]

Welcome back and a big THANK YOU for all that you did in service to your country.

Sorry -can't assist w/ your questions. I have my own problems (losses) - would hate to add to someone elses.

Good luck in the upcoming year - stay safe.

[8_percent]

All,

We are here once again. We've been in country for about two months now. However, I may be leaving before the year is out. I'm going back to homestation and clear installation and heading out to the career course early next year. In regards to TSP, prior to arriving myself and others promoted and encouraged soldiers in the unit to the maximize what they could afford to TSP. Obviously others recommended the Roth IRA. In which I'm a huge fan of as well. The wife and I are zoomed and focused on contributing the max to TSP/Roths. Obviously, having a diversified retirement plan is probably the right answer. I recently changed my IFT to L2040, but consistently contribute monthly allocations to stock funds C,S,I (34/33/33). Also, in 2011 I switched from buying I/EE bonds to contributing to a taxable account USAA's S&P 500 and Mid Cap funds. USAA is also the same brokerage we have our RIRAs with. I like the idea of having all accounts under the same roof. The wife and I still debate whether that's the right answer or not. Can anyone give me additional tips or advice? Thanks

2011 Goals:
1) TSP - 16.5k (L2040)
2) RIRA - 10k (USAA- TR 2040)
3) Taxable - 5k (USAA - USSPX/USMIX)

[tsptalk]

Hey 8 percent. Good to hear fom you again. I have 4 different accounts with Scottrade. I never gave it much thought as to being less safe that way or not. Maybe I should think about it. Let's see what others say.

[Birchtree]

My new son in law had a USAA account all in mutual funds that were basically slow mode - I made him a portfolio with ten different stocks all on dividend reinvestment. His account is now on auto-pilot and always working. You have mutual funds in TSP so branch out into individual stocks for faster gains over time with the Roth or any other accounts. It's a risk on economy.