Search found 61 matches

by MCM 2008
Tue Nov 02, 2021 12:21 pm
Forum: Personal Investments
Topic: TSP Rollover Question (military)
Replies: 5
Views: 1235

TSP Rollover Question (military)

Hello,

I have a block of Combat Zone Exclusion Pay in my Traditional TSP. This CZE Pay is earmarked as income tax-free, which as I understand it, means when I withdraw it, it will not be taxed. However, any return it generates is taxable.

I cannot transfer it to my Roth TSP because TSP has not yet implemented intra-TSP transfers (last I heard).

After I separate from service, I would like to rollover this CZE Pay into my Roth IRA. I suspect this will not create a taxable event, but I don't know.

Does anyone have experience with this sort of transaction, and/or can you comment on the tax consequences? Is this something Vanguard can do?

Thanks.
by MCM 2008
Tue Oct 09, 2018 10:58 am
Forum: Personal Consumer Issues
Topic: Six Pillars of Self-Esteem: Nathaniel Branden
Replies: 16
Views: 3188

Re: Six Pillars of Self-Esteem: Nathaniel Branden

I read it some years ago. I don't recall a lot of specifics, but I remember liking Branden's approach. I would like to read it again some day. For context, Branden was once upon a time the erstwhile heir to the leadership position in Rand's Objectivism movement. He had an affair with her while they were both still married to other people. He ended the affair and she kicked him out of the movement. This happened decades ago; I think there was a movie about it. In my view, their possibly distasteful personal behavior (I wasn't there, so I don't really know all of the details) in the matter do not necessarily taint what she or Branden wrote, either. Rand's shadow still looms somewhat over Branden's post-Objectivism work, and in my view, he ret...
by MCM 2008
Thu Apr 09, 2015 11:06 am
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump Sum for Active Duty
Replies: 2
Views: 722

Re: Pension vs. Lump Sum for Active Duty

A few thoughts that may or may not affect your risk assessment as you plan: 1. Wanting to retire from the military does not equal retiring from the military. We are in a major drawdown and lots of people are being separated involuntarily. You might not get that NCOER/OER or job you needed for promotion to stay in. Lots of things could happen to force you out before retirement. 2. If you do manage to retire from the military, you will not receive a pension, you will receive retired pay. This is reduced pay for reduced service. (The Supreme Court has stated this in two separate cases.) Given that you expect you may not live to 65, you should also familiarize yourself with the differences between retired pay and disability pay. 3. I agree with...
by MCM 2008
Tue Oct 28, 2014 8:18 am
Forum: Personal Investments
Topic: My first post, TSP advice.
Replies: 17
Views: 2688

Re: My first post, TSP advice.

Not sure what your question is, but let's start with these: My only real investments are in the TSP, most of which has been the traditional type (I just switched over to the roth in april, but am contributing 459 a month to get the 5500/year) The TSP contribution limit is $17,500 per year, not $5,500. The IRA contribution limit is $5,500 per year. I would also like to set something up for her, she is not military, so I was looking into setting up an IRA through USAA. Her savings is our safety cushion until she gets a job, so that is not going to be invested in the immediate future. USAA is a fine choice, but you pay extra for their great service. You can start an IRA at Vanguard with a much lower expense ratio, and they still give very good...
by MCM 2008
Wed Jan 02, 2013 7:29 pm
Forum: Personal Investments
Topic: Opportunity Cost of Roth TSP - Help
Replies: 2
Views: 599

Re: Opportunity Cost of Roth TSP - Help

Thanks, that helps.

I will be able to max out my TSP contribution either way, the issue is how much I'll have left over to invest in a non-tax advantaged account (TSM and TISM) in addition to that. Does that affect your analysis?

Edit: I read part of the Wiki entry you posted, and will read the rest when I get more time. Looks like my best bet at this point is to max out the Roth.

Thanks!
by MCM 2008
Wed Jan 02, 2013 6:33 pm
Forum: Personal Investments
Topic: Opportunity Cost of Roth TSP - Help
Replies: 2
Views: 599

Opportunity Cost of Roth TSP - Help

Up until 2012, I had been maxing out my Roth IRA and Traditional TSP every year for the past several years. For some reason, due to the unnecessarily complex way in which DFAS implemented Roth TSP contributions, the TSP folks are telling me I didn't max out my contribution for 2012. (Tangential issue that I'm trying to fix with DFAS, not the point of this post.) I realized that converting from Traditional TSP to Roth TSP increased my income tax withholding by about $400 per month (not exact, but rough estimate). I'm in the same tax bracket (25%) either way. (My state does not tax military pay, and I anticipate retiring to a state that has no income tax.) However, that's $400 in increased taxes per month that I can't invest elsewhere and get...
by MCM 2008
Tue Sep 18, 2012 8:03 pm
Forum: Non-US Investing
Topic: American living in Japan: taxes
Replies: 9
Views: 1538

Re: American living in Japan: taxes

nekotikara wrote:Hi!

I'm an unmarried American citizen in my late twenties and want to start investing more seriously. I live in Japan and recently passed the five year mark which seems to mean Japan can now tax anything I make worldwide. I'm particularly wondering how taxes in Japan and US ought to affect my investment decisions.
This may sound like a dumb question, but I don't think it was addressed (if I missed it, I apologize).

Are you in the US military stationed in Japan, or are you a DoD civilian?
by MCM 2008
Mon Sep 17, 2012 4:40 pm
Forum: Personal Investments
Topic: Military Deployment - Advice on tax advantages
Replies: 24
Views: 3182

Re: Military Deployment - Advice on tax advantages

The best option is the DOD Savings Deposit Program. A total of $10,000 may be deposited during each deployment and will earn 10% interest annually. It is not limited to military pay. ------ SDP ends after 90 days in the USA. ------ WRONG If you have other savings you can immediately deposit (NO) cash or check into the program when the account is opened. WRONG Just saying "wrong" without providing the correct information is not very helpful. According to DFAS, your SDP account will continue to accrue interest for 90 days after you re-deploy, and will automatically be deposited into your direct deposit account 120 days after you re-deploy: http://www.dfas.mil/militarymembers/payentitlements/sdp.html Unless they changed the SDP sinc...
by MCM 2008
Sat Sep 15, 2012 8:39 am
Forum: Personal Investments
Topic: [Military] Total newbie needs advice. Please :)
Replies: 8
Views: 1138

Re: [Military] Total newbie needs advice. Please :)

Mimi57, Some thoughts: 1. Could you please post your portfolio according to the standard for this board: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212 It will allow us to better target our advice to your specific needs. 2. USAA is a great bank, very reliable, with excellent customer service. However, their expense ratios on their investments are much higher than Vanguard's. That means more money is taken out of your investment account over time for account expenses. I suggest having your investments (e.g. mutual funds, IRAs) with Vanguard instead. 3. Have you decided what to do with your husband's Post 9/11 GI BIll? You didn't mention it in your post, so I don't know if I'm about to say what you already know. He can assign it...
by MCM 2008
Mon Sep 03, 2012 9:46 am
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

Tax Rate: 25% Federal, 0% State That assumes I would realize a tax savings of $750 today, of which I'm not convinced. I might have missed some other information elsewhere in the thread. $3,000 harvested losses x 25% = $750. Nope, you didn't miss the information because I didn't post it. The only year I can recall having near $3,000 or more of capital losses, I was deployed to a designated combat zone for 11 months. That particular year, my investment strategy was messy and not particularly well thought out. I seem to remember having gotten into a foreign real-estate mutual fund right at the peak, and then getting out of it sometime early in 2008. I don't know if TLH would have helped me then, because I don't recall all the details of my po...
by MCM 2008
Mon Sep 03, 2012 9:18 am
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

I have read the Tax Loss Harvesting Wiki page at your suggestion. I still fail to see how it benefits me. OK. So if you don't plan to donate appreciated shares or gift them to a nephew or leave them to your heirs, what will happen to them? (Hint: I manage the finances of an elderly person with six figure income who is in the zero percent bracket because assisted living expenses are deductible. We're not talking about LTCG rates here, we're talking 0% tax on all income.) Second question: if you avoid $750 of tax today, what do you do with that $750? (By the way, the ACA tax on investment income is for singles with AGI over $200,000, not $250,000. The $250,000 threshold is a marriage penalty.) With regard to your first question, what I antic...
by MCM 2008
Mon Sep 03, 2012 8:02 am
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

Johm221122 wrote:You may want to consider I bonds for your cash.Tax Deffered, keep up with inflation, government guarantee and easy to cash after 1 year
http://www.bogleheads.org/wiki/I_Savings_Bonds
John
John, thanks for the link. I'll take a hard look at that. I've been hesitant on I Bonds because I've heard bad things about Treasury Direct and their customer service, but maybe those fears are a bit overblown.
by MCM 2008
Mon Sep 03, 2012 7:45 am
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

I believe that the Affordable Care Act changes the tax code so that dividends are taxed as regular income. This is incorrect. I think the change takes effect on 1 January 2014 This is incorrect. I also think that the change is applicable to those who make $250,000 or more per year. This is incorrect. I've read about tax-lost harvesting, but I don't do it. Maybe I don't get it. This is correct. Read about TLH on the wiki and in threads here. Once you get it you'll start doing it. Following up, according to this article from Mr. Swedroe on June 29, "This can be especially important if other tax changes scheduled to take effect at the beginning of the year -- such as the increase in capital gains rates from 15 percent to 20 percent and d...
by MCM 2008
Sun Sep 02, 2012 11:02 pm
Forum: Investing - Theory, News & General
Topic: Permanent Portfolio - my experience
Replies: 48
Views: 7504

Re: Permanent Portfolio - my experience

staythecourse wrote:Who said hold gold in a tax adv. account?? Gold has no dividends so it is great in a taxable account.
My understanding is that gold is taxed as a collectible, which is either 28%, or your marginal income tax rate, whichever is lower. This is why, it seems to me, that holding a gold ETF in a non-tax-advantaged account in tax inefficient.
by MCM 2008
Sun Sep 02, 2012 9:44 pm
Forum: Investing - Theory, News & General
Topic: Permanent Portfolio - my experience
Replies: 48
Views: 7504

Re: Permanent Portfolio - my experience

I admit I'm intrigued by the PP. I like Harry Browne, and his reasoning makes sense to me. What keeps me away from the PP primarily is I can't figure out a way to own the gold component that I'm happy with. I don't have enough tax-advantaged space to keep both gold and long-term treasuries in tax-advantaged in the percentage proportions required. I can't keep gold in a safe in my house because I rent and move a lot. Similarly, keeping it in a safe-depoist box doesn't make sense to me. Holding it in an ETF in taxable seems tax-inefficient, and defeats part of the purpose of having gold (because I'm not actually holding gold, I'm holding a gold ETF.) Plus, having access to the TSP (which is difficult to work into the PP in a tax-efficient way...
by MCM 2008
Sun Sep 02, 2012 8:19 pm
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

I'm not concerned with stepped-up basis for heirs. Leaving an inheritance is not part of my financial strategy. I think the ACA also raises the capital gains rate, but again, I think it's for those making $250,000 and above.

I've read about tax-lost harvesting, but I don't do it. Something doesn't sit right with me about it. It seems to me that if you TLH, you're lowering your cost-basis in the new fund. Eventually, you will have to account for that in increased capital gains. Unless the strategy is to make up the difference between income tax and capital gains tax. Maybe I don't get it, but I don't see the benefit of it for me.

I'm not interested in giving away shares. I don't itemize my tax return, and don't expect to for many years.
by MCM 2008
Sun Sep 02, 2012 7:45 pm
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

Livesoft,

I believe that the Affordable Care Act changes the tax code so that dividends are taxed as regular income. I think the change takes effect on 1 January 2014, and I also think that the change is applicable to those who make $250,000 or more per year.

I don't make that much, but I'm not 100% on the details. It concerns me a bit from a tax perspective, so I thought I would mention it and solicit opinions.
by MCM 2008
Sun Sep 02, 2012 4:25 pm
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

Thanks, Duckie. I see what you did there with that portfolio proposal. I put in the orders to make the switch. It seems that I'm currently paying foreign tax on the TSP portion of my international stocks, which I'm not re-capturing through the foreign tax credit, so this is a bit inefficient. Also, switching to TSM from TBM in the Roth lowers my expense ration. (But I'm concerned that moving the bond interest income from tax exempt to tax deferred may result in a wash in the long term anyway.) I don't recall if I've read that particular article on the Roth TSP before, but I've read several. Thanks for the link. It occurred to me that my current pay is not taxed by my state, but TSP withdrawals down the road probably will be. Further, making...
by MCM 2008
Fri Aug 31, 2012 5:09 pm
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Re: Portfolio Review and Questions

Thanks for the thoughts. I was leaning toward putting some of my emergency fund into a tax exempt bond fund, so maybe I'll do that.
by MCM 2008
Fri Aug 31, 2012 3:52 pm
Forum: Personal Investments
Topic: Military Deployment - Advice on tax advantages
Replies: 24
Views: 3182

Re: Military Deployment - Advice on tax advantages

billted wrote:Active Duty, first deployment. I'm a surgeon so I get a fair amount of taxable pay over and above an 04's base salary.
Then unless the Air Force is different from the Army, you're probably not going to sell leave when you re-deploy. I don't think this option is even available to active duty service members unless you're ETSing. You just won't be taxed on your accrued combat zone leave when you take leave.

Regardless, your combat zone tax exempt pay is capped at the annual salary of the highest enlisted member of your service component, so that would be the Chief Master Sergeant of the Air Force. I would say even at your pay grade, it's not likely you'll exceed the CMSAF's annual salary in six months of deployment.
by MCM 2008
Fri Aug 31, 2012 3:30 pm
Forum: Personal Investments
Topic: Military Deployment - Advice on tax advantages
Replies: 24
Views: 3182

Re: Military Deployment - Advice on tax advantages

billted wrote:BlackBeltLurker,

Thanks for the information. I'm 04 and probably max out the tax free income. Does it still make any sense to sell the CZ leave in this scenario?

BillTed
Just to clarify, are you reserve component being activated for this deployment, or active component?
by MCM 2008
Fri Aug 31, 2012 11:26 am
Forum: Personal Investments
Topic: Portfolio Review and Questions
Replies: 21
Views: 1925

Portfolio Review and Questions

Hello, Bogleheads, I'm asking for a portfolio review and looking for answers to a few questions for maybe tweaking my portfolio. Emergency funds: About 8 months of salary, or 12 months of expenses (including CD ladder) Debt: None Tax Filing Status: Single (no dependents) Tax Rate: 25% Federal, 0% State State of Residence: Michigan (Military pay not taxed by Michigan) Age: 36 Desired Asset allocation: 70% stocks / 30% bonds Non-tax-advantaged: 14.6% Vanguard Total Stock Market 26.2% Vanguard Total International Stock Market Roth IRA: 16.2% Vanguard Total Bond Market TSP: 43.0% Lifecycle 2030 My current asset allocation is 70/30 by my calculations. I'm comfortable with this allocation. Addendum: I have maxed out my Roth IRA contributions for ...
by MCM 2008
Sun Nov 13, 2011 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: Reducing student loan interest rate
Replies: 15
Views: 1454

Re: Reducing student loan interest rate

EmergDoc wrote:2) Get a bunch of credit cards, take out a bunch of cash from them, pay off student loans, declare bankruptcy.
I suspect/hope this is a tongue-in-cheek response. I recommend that he does NOT do this. Aside from all the negative consequences of filing for bankruptcy, the bankruptcy trustee could void this transaction as fraudulent. Then your friend would still be on the hook anyway.
by MCM 2008
Fri Nov 04, 2011 8:10 pm
Forum: Personal Consumer Issues
Topic: How Do You Deal with Status Anxiety?
Replies: 95
Views: 11392

Re: How Do You Deal with Status Anxiety?

Status is what you make it.
by MCM 2008
Fri Nov 04, 2011 7:39 pm
Forum: Personal Investments
Topic: Bogleheads Unite...and Help a Soldier with his Portfolio
Replies: 21
Views: 2379

Re: BOGLEHEADS UNITE!...and Help a Soldier with his Portfoli

Welcome to the board and thank you for your service. 1. I advise you to re-think your emergency fund strategy. From time to time, Congress reaches a budget impasse, and the ability of the federal government to pay military salaries comes into question. Earlier this year, I advised my commander about the possibility of relief through the SCRA and unemployment compensation because at one point it looked like we might not get paid, and Soldiers had bills. You never know when that situation might appear. Further, guaranteed pay on the 15th of the month does nothing for you if you have an emergency and need a pile of cash for some unforeseen situation that occurs on the 8th of the month. Finally, this is a new military: we have budget deficits. ...
by MCM 2008
Mon Oct 24, 2011 3:14 pm
Forum: Personal Consumer Issues
Topic: Any Teachers?
Replies: 10
Views: 1318

Re: Any Teachers?

Pacific wrote:For an interesting (and depressing) look at the declining American educational system, see the documentary "Waiting for Superman."
Or if you prefer books, try Inside American Education by Thomas Sowell.
by MCM 2008
Mon Oct 24, 2011 3:11 pm
Forum: Personal Finance (Not Investing)
Topic: [not disclosing pregnancy during hiring]
Replies: 40
Views: 3753

Re: [not disclosing pregnancy during hiring]

Life is uncertain. You could have hired a man for this position and he could be hit by a car 4 months from now and be out for 2 months on disability. Or have a heart attack. Or choose to quit because he doesn't like working for you. Unfortunately, as much as we may like - we cannot hire anyone and be guaranteed that they will be able to provide their services at our convenience and without pause. To feel differently about pregnancy in these circumstances is to discriminate. Getting hit by a car is not a choice for a sane person, and thus not analogous. Having a heart attack is not a choice for anybody. And yes we do have a guarantee that the people we hire will be able to provide services at our convenience, because if they don't, we can f...
by MCM 2008
Mon Oct 24, 2011 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: [not disclosing pregnancy during hiring]
Replies: 40
Views: 3753

Re: [not disclosing pregnancy during hiring]

I wouldn't have not hired her if I knew ahead of time, but I really feel like that should have been disclosed by her during the interviewing. Am I wrong for thinking that? [title edited by admin alex] I'm going to disagree with the previous poster and say no, you are not wrong for thinking that. Pregnancy is a lifestyle choice, and not the concern of the business. Your business was in the hiring process because it needed someone to do a job, not someone who to tell you they could do a job, and then skip out on the job because of their lifestyle choice. This person's failure to disclose that she knew that she would not be able to do the job she was applying for (even temporarily) is fraud. It's probably legal, but you should check with a la...
by MCM 2008
Mon Oct 24, 2011 11:07 am
Forum: Personal Consumer Issues
Topic: How do you live your life?
Replies: 112
Views: 57870

Re: How do you live your life?

A couple of years ago, while searching for meaning in my first deployment to a combat zone, I realized that I did not believe in any type of afterlife, and that I should not live my life as though I did.

That changed my perspective on most things.

I also realized that, in the grand scheme of things, most of what we do doesn't matter to the world; and in a hundred years probably no one will remember it anyway. You may as well do what makes you happy instead of getting all wired up about things that ultimately don't matter.
by MCM 2008
Fri Oct 21, 2011 12:05 pm
Forum: Personal Investments
Topic: ROTH IRA conversion question
Replies: 10
Views: 766

Re: ROTH IRA conversion question

I would check last year's Form 1040 instruction manual. I think you can go $9,000 or so in taxable income without even being required to file, let alone pay taxes.

My point is, I think you can go a little above the combined value of your standard deduction and personal exemption in your conversion and still not have to pay income taxes. Verify, though, as my numbers may not be correct.
by MCM 2008
Fri Oct 21, 2011 11:41 am
Forum: Personal Investments
Topic: Vanguard Hindering Diversification?
Replies: 12
Views: 1544

Re: Vanguard Hindering Diversification?

What exactly is your concern?

If it is diversification in terms of asset allocation, as your title implies, I don't see an issue. (Maybe someone else does and will comment.)

If you're worried about losing all your assets should Vanguard go out of business, you're probably protected by the Securities Investors Protection Corporation:

http://www.fdic.gov/consumers/consumer/ ... ciorn.html
by MCM 2008
Fri Oct 21, 2011 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Girlfriend is an heiress, who should pay?
Replies: 197
Views: 20833

Re: Girlfriend is an heiress, who should pay?

And by definition, exploitation means that one offers a job at low wages and conditions because the employer knows that the person can't turn it down. That's the very definition of exploitation. So where exactly does this alleged definition come from? A legal definition of exploitation would imply coercion, force, or violence. You were certainly not forced to take this job. There may not have been reasonable alternatives, but no one threated violence against you if you did not take this job, did they? Dictionary.com defines exploitation as "selfish utilization". Based on your recitation of the facts, it seems that you are also exploiting your employer in order to advance your career, so that you can eventually land a tenure-track...
by MCM 2008
Fri Oct 21, 2011 8:13 am
Forum: Personal Finance (Not Investing)
Topic: Capital Gain on Sale of a Home
Replies: 3
Views: 738

Re: Capital Gain on Sale of a Home

If you are active duty military, then the 5 year period that rwwoods mentioned can be suspended for up to 10 years, essentially only requiring you to have lived at the house as your personal residence for 2 of the last 15 years.

From the IRS's website:

http://www.irs.gov/newsroom/article/0,, ... 06,00.html
by MCM 2008
Wed Oct 19, 2011 12:01 pm
Forum: Personal Consumer Issues
Topic: What Book Are YOU Currently Reading? Part IV. (07/04/2010)
Replies: 1507
Views: 401915

Re: What Book Are YOU Currently Reading? Part IV. (07/04/201

The History of the Decline and Fall of the Roman Empire by Edward Gibbon
by MCM 2008
Wed Oct 19, 2011 11:48 am
Forum: Personal Consumer Issues
Topic: [Books that changed your life]
Replies: 577
Views: 72745

Re: Any books really change your outlook on life?

The Virtue of Selfishness by Ayn Rand
Tao Te Ching by Lao Tzu
Analects of Confucius
Human Action by Ludwig von Mises
Art of War by Sun Tzu
The True Believer by Eric Hoffer
How to Argue and Win Every Time by Gerry Spence
by MCM 2008
Wed Oct 19, 2011 8:27 am
Forum: Personal Finance (Not Investing)
Topic: Personal Finance Seminars
Replies: 13
Views: 1789

Re: Personal Finance Seminars

The Color of Money
by MCM 2008
Wed Oct 19, 2011 8:21 am
Forum: Personal Investments
Topic: Portfolio tune up in high interest environment
Replies: 5
Views: 596

Re: Portfolio tune up in high interest environment

Are those funds in taxable or tax-advantaged accounts?
by MCM 2008
Sun Oct 16, 2011 1:17 pm
Forum: Personal Finance (Not Investing)
Topic: Family member owes me money but hasn't paid me back, what sh
Replies: 27
Views: 3926

You might talk to an attorney about putting a lien on one of the properties for the amount of the loan. That way, you're guaranteed your money back the next time the property changes hands, and you wouldn't have to buy one of them.

Depending on the laws of your state, it could be as simple as preparing a document that you and the family member sign agreeing to the lien and the amount, and then filing it with whatever government agency records the title documents.
by MCM 2008
Sun Oct 16, 2011 12:08 pm
Forum: Personal Investments
Topic: How are TSPers planning to use the Roth option?
Replies: 21
Views: 2233

baw703916 wrote:One thing I haven't heard is how the automatic/matching contributions will be handled. Will those still be pre-tax regardless of whether the participant contributions are traditional or Roth? I assume so, but hadn't heard.

So, if I were to max out my TSP and make it all Roth, would the total contributions be $16,500 in the Roth portion and 5% of my salary in the regular?
According to Bulletin 10-13, matching funds will be sent to the regular TSP regardless of how you characterize your contributions.
by MCM 2008
Sat Oct 15, 2011 12:31 pm
Forum: Personal Investments
Topic: How are TSPers planning to use the Roth option?
Replies: 21
Views: 2233

Contributing combat pay to the Roth is a no-brainer. I have already contributed a significant amount of combat pay to my TSP, and the TSP keeps track of how much of your TSP is tax-exempt. I anticipate (though I don't yet know) that I will be able to transfer the tax-exempt amount to the Roth TSP without further tax consequences. Also, I anticipate I will be able to gradually transfer tax-deferred contributions to the Roth TSP during deployments. Beyond that, I already fully fund my Roth IRA every year. It's not clear to me at this point whether I should split my non-deployed TSP contributions. Currently, I'm leaning toward placing them all in the regular TSP. I expect I'll lay out my circumstances and ask for advice on this forum at that p...
by MCM 2008
Thu Oct 13, 2011 9:56 pm
Forum: Personal Investments
Topic: Request for an opinion on investment advice
Replies: 8
Views: 1027

Great advice. Even better that he followed it.
by MCM 2008
Thu Oct 13, 2011 9:20 pm
Forum: Personal Finance (Not Investing)
Topic: College advice to high school seniors...
Replies: 36
Views: 6546

Don't major in political science. I did, and regret it.

Study hard and get good grades. It helps you get a good-paying job or helps you keep a scholarship. This translates into more wealth and less debt.

I slacked off in law school and lost my scholarship after my first year. I had to borrow more to finish, and I regret that.
by MCM 2008
Tue Oct 11, 2011 8:45 am
Forum: Investing - Theory, News & General
Topic: Military Investing
Replies: 125
Views: 65487

That looks great. I just sent the link to my young staff-sergeant, who is just getting started in investing. The BAH entry is a little confusing. It says: "The Basic Allowance for Housing (BAH ) is $2K per annum." What does this mean? BAH is not a fixed amount, it is calculated based on rank and locality. Also, I would suggest adding a caveat for Overseas Housing Allowance (OHA), which applies to those service members stationed in Europe the far East (and I suspect other places around the globe). It is contingent upon your actual housing costs, so there is no potential for excess, like you would have with BAH. I'd be happy to make the changes if you trust me with Wiki access, or feel free to copy anything from my post. I could pro...
by MCM 2008
Mon Oct 10, 2011 6:20 pm
Forum: Personal Investments
Topic: Where do I start?
Replies: 2
Views: 688

You might start here with the Bogleheads financial start-up kit:

http://www.bogleheads.org/wiki/Boglehea ... art-up_kit

I think the most important thing you can do right now is to have an emergency fund with at least 6 months of expenses. I suggest keeping it in a savings account or money market fund.

What you do after that depends on how much debt you have, what kind of debt it is (if any), what your financial goals are, and what types of tax-advantaged plans you have available to you (e.g. 401k, etc.).

Are you married? Does your spouse work?

Can you tell us more about those things?
by MCM 2008
Mon Oct 10, 2011 6:10 pm
Forum: Personal Investments
Topic: Target 2035 for a 42 year old married couple a good choice?
Replies: 14
Views: 2206

I suggest that you look at the Target Retirement funds in terms of asset allocation, and how they fit into your overall asset allocation strategy, rather than in terms of what year-date they attach to the name.
by MCM 2008
Sun Oct 09, 2011 1:43 pm
Forum: Personal Investments
Topic: Need guidance on investing
Replies: 19
Views: 2211

raildogg wrote:I am going to consider the different types of investment funds mentioned but I have some questions regarding them and some others. The Target Retirement fund seems to me as being very long term. Also, it seems like its a "set it and forget it" type of fund. It has had 1.09% growth since its inception.

I like the LifeStrategy fund as well. Its expense ratio is low as well. It has averaged 6.89% growth since its inception.
At the risk of sounding like a cliche, past performance is no guarantee of future performance.

I personally like the Target Retirement funds becuase I can set it and forget it. It automatically moves to a more conservative allocation over time, and eventually includes TIPS and cash as part of its allocation.
by MCM 2008
Sun Oct 09, 2011 8:12 am
Forum: Personal Finance (Not Investing)
Topic: Military Tax Free Leave
Replies: 4
Views: 6561

If memory serves me correctly, I think you can only take tax-free exclusion zone leave the first time you take leave after re-deployment. Even if you did not consume all of your tax-free leave on your first leave period after re-deployment, the tax-free nature is forfeited for all subsequent leave. For example, let's say you earn 20 days of tax-free leave. After re-deployment, you go on block leave for 10 days. That's tax-free. A couple of months later, you go on leave again for 10 days. That second period of leave doesn't count as tax-free leaves, and instead reverts to normal leave. At least, this is how I recall the finance office explaining it to me. I haven't researched the statute. This might account for the differences you saw among ...
by MCM 2008
Wed Oct 05, 2011 1:32 pm
Forum: Personal Investments
Topic: TSP Roth option question
Replies: 5
Views: 939

Re: TSP Roth option question

Thanks for the responses! 1. Yes, although you should just adjust your contributions so that they go directly into the Roth TSP during that time. Welcome to one of the only times where you can earn money and never pay income taxes on it. Let me rephrase the question. I have already contributed tax-free combat zone pay, and the TSP keeps track of how much of my total past contributions are tax exempt. Can I roll this over to a Roth TSP without further tax consequence? I am a legal resident of Michigan. Michigan has an income tax, but military income is fully deductable. (So, you transfer your AGI from your federal return, deduct your military pay, deduct your personal expemtion, and are taxed on the balance.) I haven't paid any income tax to...
by MCM 2008
Wed Oct 05, 2011 6:55 am
Forum: Personal Investments
Topic: TSP Roth option question
Replies: 5
Views: 939

TSP Roth option question

Hello,

I put a lot of money into my TSP (military, so no matching).

When the Roth option is available:

1. Will I be able to move my tax-free combat zone contributions to the Roth TSP without any further tax obligation?

(I suspect yes, but I haven't been able to find an answer anywhere.)

2. Would I be better off in the long run switching all of my new contributions to the Roth TSP, versus continuing to contribute to the traditional TSP?

(This question only applies to taxable non-combat zone pay. I currently contribute the yearly maximum to a Roth IRA, and also the yearly maximum to the TSP. Also consider that currently, whether I contribute to the TSP or not doesn't change my tax bracket, which is 25%.)

Dave
by MCM 2008
Thu Sep 29, 2011 6:29 am
Forum: Personal Finance (Not Investing)
Topic: Taking a Financial Hit to Pursue Your Passion
Replies: 65
Views: 6190

Re: Taking a Financial Hit to Pursue Your Passion

dgm wrote:If I were you, here is what I would do to decide:
1. Get a really good idea of what career options are available for meteorologists. Talk to as many meteorologists as you can and explain your situation and see what they say. They will have a ton of great insight into areas where you might have the wrong expectations.
This.

I would also suggest asking a meteorologist if you could spend a day shadowing him/her at the office, so you can get a good idea of a typical day in the career.