Episode-2287- Expert Council Q&A for 9-7-18 — 2 Comments

  1. I haven’t even finished the episode, but I’ve been looking over my records and feel inclined to reply to John Pugliano’s answer.
    First, I’m glad to hear that military members can get matching contributions under this New system. We had access to, and I started contributions back in 2004, but military weren’t offered matching contributions like the civilian side was.
    Second, I haven’t researched this, so I don’t know how this works under the New system, but as a military member, when I left the service, I have NO option to roll over, withdraw or even borrow against my TSP contributions (ironic acronym on this thread). I thought I was a career soldier until they said I was to broken to play, so I never hesitated contributing to my retirement. Another issue I faced was being “locked out” of this account during my transition out of the military, and timing couldn’t have been worse as I had most of my funds in the more aggressive F and I find options and I lost a huge portion during the recession of ’08. My point is with that is have better foresight than I had because let’s face it, the military is a dangerous and unpredictable profession.
    I love hearing there’s a wroth option, as I would have jumped all over that, but that’s how it goes.
    For student loan debt, if he didn’t get anything on initial enlistment, he probably won’t until re-enlistment comes around, but “green-to-gold” used to be an awesome program, not that I’d ever suggest a quality enlisted man ever become an officer, but it’s more about this soldier’s needs than my opinion.
    Good luck, God Speed, and thank you for being a quality NCO and reaching out to take care of your men.

  2. Just wanted to make a quick note on the TSP contributions. I’m not sure if it applies to military members, but it definitely applies to a civilian federal workers.

    Because TSP is technically it’s own separate entity, there is actually a tax trap built into the Roth option to be aware of. Basically, the matching contribution is put into a traditional account and the participant contribution is put into a Roth account, all within the same account. The trap is that all distributions from TSP are required to be proportional between both accounts. There’s ways around it, but it takes some working around. I’ve attached links that explain it in more detail and how to avoid the built in tax trap.