A new Harley.
I am about to get a nice bonus in the $100,000 range. I already invest 18% in TSP, max my Roth IRA and have mutual funds so what looks good?
A new Harley.
In Dog Beers I've only had two.
I need your job.
Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."
It depends on your situation. Is the bonus taxable?
Figure out how much you have contributed to your TSP and then max out your TSP, $16,500, to lower your AGI.
Front load next years TSP contributions during the first few months but be careful if you get a match because TSP will cut you off at the limit. This requires a little creative planning.
Good luck and congrates. Your not the Postmaster General, are you?
Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."
Yeah, I need another Harley!
If you are in a "tax free" designated area, you may want to consider a ROTH IRA first:
A. You are not getting taxed on the income right now.
B. All interest on a ROTH IRA is NOT TAXABLE.
Then TSP second:
A: AGI is not taxable earned - deployed
B. Interest and principal taxed in retirement
Third traditional IRA.
A. AGI is not taxable earned - deployed
B. Interest taxed in retirement
Your military retirement will be taxed so you might as well get the best BANG for your buck.
I'm not sure if the yearly limits apply to you, I'd check with your military pay/JAG for rules and laws....
Also, you may need to "buy" other investments like gold or silver to protect long term, but research that for yourself to see if it is a way you want to go.
I have a few friends that used their bonus for a down payment for a house that they now rent.
Also, you may want to grab some dividend paying stocks ad well!
You're smart to want to invest it...just choose the right investment for you!
THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
Tracker = Check my position
Front loading would just get the funds into the TSP quicker to make you money, even if it was in the G fund. I would not do it now that I know it is tax free.
After what you just posted I would look for a tax exempt investment outside TSP. Why put tax free money into a account that will be taxed when you withdrawal it. TSP is a tax deferred account. Even if you just laddered a bunch of CD's with a crappy rate of return you would not pay tax on the principle. It would give you some time to research too.
Load your Roth IRA and pray the Roth TSP gets here quicker.
Look on some of the sites like Clark Howard to find a investment that will be tax exempt.
Also, you can only contribute $5000 to a Roth and/or Traditional IRA. Go Roth.
Splitting Your Contribution
If you are eligible to contribute to both types of IRAs, you might want to divide your contributions between your Roth and Traditional IRA; however, your total contribution to both IRAs still must not exceed the limit for that tax year (plus the catch-up contribution).
Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."
I believe that what ever I invest in the TSP is tax exempt while deployed. I just pulled this from my account (Tax-Exempt Contributions Year to Date: $10,736.12) that is from three trips over there. I am able to drop any amount of my bonus in the TSP and it would be tax exempt. Am I reading this correct?
munibonds are also exempt from fed taxes as I understand it, never bought any yet. They are riskier than in the past tho, since many municipalities may be bordering on bankruptcy due to bad investment guidance during the last 10 years-do lots of homework. 3 megacredit unions just got taken over into receivership in the past couple weeks too. the kinds that stand behind your local credit unions.
Put the first third towards some fast women. Then the second third towards some fast cars. Use the final third for some decent whiskey.
Whatever you have left - go ahead and waste...
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