Comments on: Where Should You Invest – TSP or IRA? http://themilitarywallet.com/tsp-or-ira/ Personal finance for military, veterans, and their families Sat, 04 Feb 2012 04:56:31 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Ryan Guina http://themilitarywallet.com/tsp-or-ira/comment-page-1/#comment-17218 Ryan Guina Sat, 16 Jul 2011 19:32:01 +0000 http://themilitarywallet.com/2007/09/25/tsp-or-ira/#comment-17218 William, you have great points, and for the right kind of investors, the added flexibility might be worth it. But many people don't have the knowledge or discipline to invest outside of a structure retirement account and still maintain a low cost and low tax investment portfolio. The early withdrawal penalties also act as a deterrent to some investors and prevents them from making withdrawals that would otherwise hurt their chances at a fully funded retirement. In the end it comes down to personal preference and investing abilities. William, you have great points, and for the right kind of investors, the added flexibility might be worth it. But many people don’t have the knowledge or discipline to invest outside of a structure retirement account and still maintain a low cost and low tax investment portfolio. The early withdrawal penalties also act as a deterrent to some investors and prevents them from making withdrawals that would otherwise hurt their chances at a fully funded retirement. In the end it comes down to personal preference and investing abilities.

]]> By: William McArthur http://themilitarywallet.com/tsp-or-ira/comment-page-1/#comment-17216 William McArthur Sat, 16 Jul 2011 12:46:58 +0000 http://themilitarywallet.com/2007/09/25/tsp-or-ira/#comment-17216 Every article I see touts how great it is to put tax-free money into the TSP while deployed. I don't see much benefit to it. In the TSP or in a taxable mutual fund, you will never pay taxes on the principal and in both will pay capital gains tax when it's withdrawn. The only benefit to the TSP would be avoiding earnings income tax along the way, which can be minimized by investing in the right mutual funds. Even so, that's a small price to pay for the flexibility of not having it tied up till age 59.5. The articles I've read tout how great it is to be able to remove that tax-free money during retirement, but you could do that in either case. Am I off the mark? Every article I see touts how great it is to put tax-free money into the TSP while deployed. I don’t see much benefit to it. In the TSP or in a taxable mutual fund, you will never pay taxes on the principal and in both will pay capital gains tax when it’s withdrawn. The only benefit to the TSP would be avoiding earnings income tax along the way, which can be minimized by investing in the right mutual funds. Even so, that’s a small price to pay for the flexibility of not having it tied up till age 59.5. The articles I’ve read tout how great it is to be able to remove that tax-free money during retirement, but you could do that in either case. Am I off the mark?

]]> By: Ryan Guina http://themilitarywallet.com/tsp-or-ira/comment-page-1/#comment-16805 Ryan Guina Tue, 03 May 2011 18:10:13 +0000 http://themilitarywallet.com/2007/09/25/tsp-or-ira/#comment-16805 Robert, No, the TSP does not count toward your IRA contribution limits, however, there are limits to the deductible Traditional IRA, which can be found here: <a href="http://cashmoneylife.com/traditional-roth-ira-contribution-limits/" rel="nofollow">IRA Contribution Limits</a>. Thanks for your service! Robert, No, the TSP does not count toward your IRA contribution limits, however, there are limits to the deductible Traditional IRA, which can be found here: IRA Contribution Limits.

Thanks for your service!

]]> By: Robert Carroll http://themilitarywallet.com/tsp-or-ira/comment-page-1/#comment-16804 Robert Carroll Tue, 03 May 2011 18:02:10 +0000 http://themilitarywallet.com/2007/09/25/tsp-or-ira/#comment-16804 I am retired active duty and now in the Civil Service. I am contributing now to my TSP account. Taxes hit me hard this year and I wanted to contribute to a Traditional IRA to lower my taxable income. The IRA has a max contribution on $5K per year. Does my contributions into TSP count against this limit? I am retired active duty and now in the Civil Service. I am contributing now to my TSP account. Taxes hit me hard this year and I wanted to contribute to a Traditional IRA to lower my taxable income. The IRA has a max contribution on $5K per year. Does my contributions into TSP count against this limit?

]]> By: Patrick Long http://themilitarywallet.com/tsp-or-ira/comment-page-1/#comment-15263 Patrick Long Wed, 26 Jan 2011 14:46:04 +0000 http://themilitarywallet.com/2007/09/25/tsp-or-ira/#comment-15263 Question about TSP: I'm a Guardsman deployed through September. I will not be able to put in the full $49k that I'm allowed for the year prior to that time, but will be able to put in more than $16,500. When I go home, can I keep putting my drill pay in, or am I cut off for the year? What about GI Bill money? Question about TSP: I’m a Guardsman deployed through September. I will not be able to put in the full $49k that I’m allowed for the year prior to that time, but will be able to put in more than $16,500. When I go home, can I keep putting my drill pay in, or am I cut off for the year? What about GI Bill money?

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