This is the third post in a seven-part series related to Military Saves Week. Visit us every day this week for tips to help you secure your financial future; from eating healthy on a budget to contributing to your Thrift Savings Plan and getting your kids to start saving, too.
TSP, IRA, 401(k), Roth TSP: what do all these acronyms mean and what do they have to do with my money?
Navigating the field of investment options is confusing enough without having to decipher the financial language that surrounds them. Basically, they all boil down to one thing: retirement savings accounts.
So, are you saving for the day when you won’t have to wear a uniform anymore? While it’s true that 20 years of military service will earn you a pension, it’s not guaranteed to cover your expenses following retirement, even with the help of Social Security. And what if you don’t retire from the military?
By investing in a personal retirement account, or an Individual Retirement Account, you will help ensure your financial future after your military and civilian employment ends.
The Thrift Savings Plan is the retirement savings and investment plan the federal government offers to civilian employees and service members. Similar to it, a 401(k) is what private corporations extend to their employees. In 2012, TSP introduced a new retirement savings plan, offering employees the flexibility to contribute pre- or post- taxable income to their TSP retirement account.
Watch as Lee Acker and Jeff Morrison, financial coaches for the Navy’s Fleet and Family Support Program, explain what the Roth TSP is and what its advantages are.
Still not sure which retirement investment is right for you? Read more about it here or watch as a military tax expert explains the tax benefits of contributing to a traditional or Roth retirement account.
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