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Money Matters
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Old 01-28-2011, 01:03 AM   #1
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401K IRA versus Roth IRA

TSP is opening up new 401K IRA this year. Cap will be greater than Roth IRA $5000 cap and will include matching funds. Depending on types of funds would you forgo the ROTH and instead maxmize the TSP?
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Old 01-29-2011, 10:59 PM   #2
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??? hadn't heard anything about this - so you're saying that for active duty military, TSP will now look more like a civilian styole 401k in that they match??? or is there still TSP (max up to 16.5k) plus another option for a 401k???
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Old 01-31-2011, 10:22 PM   #3
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- Max 401k match first
- Then max Roth IRA
- Then max the remaining 401k.
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Old 01-31-2011, 11:42 PM   #4
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TSP is opening up a 401K Roth IRA option this year. It can be funded with after tax dollars so it is tax free just like the Roth at 59 1/2. Interesting is the cap versus the $5000 on the Roth. I have both plus a pension, but like most I prefer to work now and not have taxes eat away my retirement later on.
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Old 02-01-2011, 12:10 AM   #5
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http://themilitarywallet.com/thrift-...tsp-roth-401k/
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Old 05-23-2011, 02:35 PM   #6
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I just read the article, this Roth IRA TSP seems like a great opportunity for those of use who are eligible for the TSP. I have my money going into the L2040 fund currently, but I haven't really been too satisfied with it. I think I'll start putting a smaller portion into the L2040 and start a Roth as soon as it's available. I was looking into starting one through USAA, but with the TSP IRA allowing you to contribute a much larger amount annually, this is basically a no-brainer in my mind. Great post!
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Old 05-24-2011, 10:35 PM   #7
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YEah it is $16500 then you have the $5000 for the roth as well. Bonus due this FY then maybe a deployment or two.
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Old 06-07-2011, 12:56 PM   #8
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So wait, are you saying you're going to max your TSP ($16,500) and also a civilian Roth ($5,000)? In that article it said that this new TSP IRA wouldn't be available until 2012, but I haven't checked my TSP online yet, I just look at my quarterly reports. I see they've started the L2050 fund, however.
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Old 06-07-2011, 01:03 PM   #9
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I don't know for TSP, but the comparable civilian 401k plans do allow you to do $16.5k in 401k plus 5k in Roth Ira. Provided your income don't exceed the limits (107k single, 169k married).

It's a hell of a deal. I would max out the Roth if you can.
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Old 06-09-2011, 06:59 AM   #10
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Oh okay, I haven't really looked into that stuff for awhile. I thought 5k was the limit for any type of 401k/IRA/whatever, and the 16.5k limit was one of the unique features of the TSP. Right now I'm thinking about the Vanguard 2045 or 2050 fund, I already have a L2040 fund through my TSP, as well. The 2040 is a little bit early for my retirement goals, however. So I think I want to start another one that's a little bit later, the 2040 will be invested entirely in G funds (government bonds, if I'm not mistaken) once 2040 rolls around, and I'd like to maintain a little bit more risk than that in the 6 years prior to retirement.
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Old 06-09-2011, 11:27 AM   #11
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The Vanguard target fund is not a bad idea. You might want to further diversify with some international exposure, something like Vanguard emerging market index VEIEX. I like to keep my investments 60% domestic 40% international, with about 70% stocks 30% bonds at current age (36).
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Old 06-09-2011, 02:36 PM   #12
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Hmm, I was thinking about international funds, but hadn't really found one I liked yet. I'll have to check it out. I'm a little bit younger than you (24), so I'm definitely looking at taking more risk, maybe 20-25% bonds. The only fund I'm in right now is USAGX, USAA precious metals and minerals. I've just started trying to build a portfolio, I want to add some sort of S&P fund, a foreign emerging markets fund (will check out VEIEX), and a target fund such as the Vanguard fund I mentioned previously. It would be fun to trade individual stocks, but I can't get nearly as much diversification that way. I should begin by starting an IRA, though, to take advantage of any gains. Right now I have a non-retirement investment acct.
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Old 06-09-2011, 02:51 PM   #13
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Sounds like you're on the right track. If it was me, I would fund tax-advantaged retirement accounts before an after-tax investment account. And I would max out the Roth before I do the 16.5k IRA. I wasn't as savvy as you at the same age, and missed out on the tremendous leverage contributing when young gives you.

For S&P just about everyone go Vanguard SP500 (VFINX). I'm a big fan of Vanguard and their low cost index funds.
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