By Doug Nordman
Military Spouse Guest Writer and founder of The-Military-Guide.com.
When you leave the military, where can you get keep tabs on your military finances?
Keep in mind that I'm not a financial advisor, and neither are the people who've contributed to the sites mentioned here. These resources should be used for your own information (and entertainment!) but you'll need to consult with a professional to see if they can be adapted for your particular situation and requirements.
I read a number of personal-finance discussion boards, and one of the largest is Bogleheads.org. Their best feature is the user's wiki, which has grown way beyond a FAQ page to become one of the Internet's top guides to investing and retirement.
Just over a year ago a poster started a thread on military investing topics which has been expanded and formatted as a new wiki page on military finances. It neatly complements their wiki page on the Thrift Savings Plan. The TSP is one of the world's largest collections of index funds with some of the world's lowest expense ratios-- as low as 0.025%. That's less than half the fee of Vanguard's cheapest index fund.
Another comprehensive websites on using the TSP is Ryan Guina's "Military Wallet" Thrift Savings Plan tab. One of the more popular posts explains how to handle TSP tax-exempt contributions and withdrawals, and he's also following the Roth 401(k) plans for the TSP (still scheduled to start next quarter).
When you're out of the service, you should probably let your TSP funds continue to compound until you meet the withdrawal criteria. However many veterans would like to see more details on the TSP's funds and compare them to products from major fund companies. The TSP funds still have the lowest expenses, but the TSP website doesn't answer questions like: "How does the 'C' fund's performance compare to the competition?" "How will the 'I' fund be affected by a foreign country's debt default?"
One resource is TSP Center. It includes archives of TSP data and share prices as well as a wealth of analysis tools for choosing an asset allocation. It also has a blog, a discussion board, and a "FantasyTSP" analyzer. You can download your own data or use their tools. You can tinker with different asset allocations and see how your TSP assets interact with your IRA and taxable accounts. You can follow their updates on Facebook. If you have a question that the TSP website doesn't answer, one of TSPCenter's 4000 members can help you figure it out.
TSP Talk is another site full of tools and archives. Its "TSP AutoTracker" gives you an easy way to monitor your TSP fund's performance with daily quotes and analysis. Its "Tools and Utilities" section offers member blogs, data charts, and e-mail alerts for TSP news releases. The site includes a forum with thousands of members who've probably answered every TSP question ever asked. Yep, they're on Facebook and Twitter too.
TSP Center and TSP Talk cater to active TSP investors, and activity is not always a good thing for your TSP account. Use these resources to educate yourself and to match your TSP asset allocation with the rest of your investments. Don't turn into a trader-- TSP investors don't have to be involved in their fund's daily twists and turns, let alone switching from one fund to another every month. For the vast majority of veterans, the most important aspects of the TSP are tracking it and rebalancing your overall investment portfolio. However the blogs and discussion boards are fantastic education tools and reference sources. If you've been all over the government's TSP website looking for an answer, you might find it on one of these "unofficial" websites.
About Doug Nordman
I graduated from the U.S. Naval Academy in 1982 and spent 20 years in the submarine force. I served as an engineering division officer and a Weapons Officer during the end of the Cold War, and then I finished my final eight years as an instructor at training commands. My spouse graduated from USNA into the Navy's Meteorology/Oceanography community and spent 17 years on active duty before joining the Navy Reserve for eight more. Both of us are retired in Hawaii, where we were first stationed in 1989. Today our daughter is a college sophomore on an NROTC scholarship.
We made plenty of investing mistakes during our careers, but we always lived below our means (easy to do on sea duty) and saved as much as we could. As my retirement approached, we realized that our investment income plus my pension would nearly replace my base pay. We've always been "green", and we made a spending plan to enjoy a beach-bum lifestyle. We overhauled our investments for low expenses and diversified income. Today we live off my pension and spend our investments to bridge the gap until my spouse's Reserve pension starts. After nearly 10 years - so far so good!
The military's inflation-fighting pension and cheap healthcare solve an early retiree's two biggest challenges. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other servicemembers and veterans. All royalties are donated to military charities, and we're collecting more stories for the second edition at The-Military-Guide.com.
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