Retirement Question, Military Guys In Here

[NavyLS1]

Just a general question here. I am 20, 21 in a few months. I am going into the Navy next week. I know it is never too early to start saving for retirement, I am just wondering where to start. How much does it usually take to start an IRA? Could I start with $500 or would I need alot more than that?

 

Here is where the military guys come in, does the military or governemnt offer anything for us? I only plan on doing 4-6 years so I won't be retired military.

 

So what is the best/easiest way to go? Being my age and junior military, pay isn't great and saving anymore than several hundred dollars isn't tha easiest thing to do. Once an account is open I plan on contributing $50-$100 a month.

 

Thanks for any and all advice.

[Skipper12]

Just a general question here. I am 20, 21 in a few months. I am going into the Navy next week. I know it is never too early to start saving for retirement, I am just wondering where to start. How much does it usually take to start an IRA? Could I start with $500 or would I need alot more than that?

 

Here is where the military guys come in, does the military or governemnt offer anything for us? I only plan on doing 4-6 years so I won't be retired military.

 

So what is the best/easiest way to go? Being my age and junior military, pay isn't great and saving anymore than several hundred dollars isn't tha easiest thing to do. Once an account is open I plan on contributing $50-$100 a month.

 

Thanks for any and all advice.

<{POST_SNAPBACK}>

 

Hi Navy,

 

Congrats on deciding to serve your country.

 

Suggest taking a look at the US govt's Thrift Savings plan: http://www.tsp.gov/ You'll be eligible to put 9% of your pay directly into a TSP account Tax Deferred and there appears to be no mimimum deposit to start.

 

Also Pentagon Federal Credit Union (https://www.penfed.org/) has IRA Accounts that you can start on Day 1 with only $25.

 

Take care and good luck,

Skipper

[NavyLS1]

Just a general question here. I am 20, 21 in a few months. I am going into the Navy next week. I know it is never too early to start saving for retirement, I am just wondering where to start. How much does it usually take to start an IRA? Could I start with $500 or would I need alot more than that?

 

Here is where the military guys come in, does the military or governemnt offer anything for us? I only plan on doing 4-6 years so I won't be retired military.

 

So what is the best/easiest way to go? Being my age and junior military, pay isn't great and saving anymore than several hundred dollars isn't tha easiest thing to do. Once an account is open I plan on contributing $50-$100 a month.

 

Thanks for any and all advice.

<{POST_SNAPBACK}>

 

Hi Navy,

 

Congrats on deciding to serve your country.

 

Suggest taking a look at the US govt's Thrift Savings plan: http://www.tsp.gov/ You'll be eligible to put 9% of your pay directly into a TSP account Tax Deferred and there appears to be no mimimum deposit to start.

 

Also Pentagon Federal Credit Union (https://www.penfed.org/) has IRA Accounts that you can start on Day 1 with only $25.

 

Take care and good luck,

Skipper

<{POST_SNAPBACK}>

 

Thanks I will look into those.

[bemi47]

Hey Navy,

 

In addition, to the great information and advise from Skipper12 you should consider taking advantage of the Montgomery GI Bill benefits. Once you've finished school and on-the-job training, continue your education; it'll help you out later in your career. If you decided to make a career the 20 year retirement is a gimme (you're going to get it). The TSP/Thrift Savings plan is an added bonus also once you leave/retire from the military, your education will kick in at getting you a better job; you can start building another retirement. Take it slow in the beginning, and be cautious of deals regarding your future retirement benefits/investments that sounds too good to be true; it's always for their benefit else they would not offer such a deal. Remember the word 'TINSTAAFL' pronounced 'Tin-Staff-el' meaning 'There Is No Such Thing As A Free Lunch'.

 

Best of luck....

[Feisty]

Hello Nub!

 

Be very wary of the insurance, investment and savings schemes that retired military try to sell a young sailor such as you will be. They prey on military. TSP is your dream. Get all the info you can and know that it is very safe.

 

The best banks for sailors are Navy Federal Credit Union (they are on nearly every base incl. overseas), and USAA Federal Savings Bank. They have the best and least expensive insurance there is.

[54regcab]

I'll 2nd the vote for USAA, excellent company ! A true benefit to those who serve our country.

[Hwkdrvr]

Hello Nub!

 

Be very wary of the insurance, investment and savings schemes that retired military try to sell a young sailor such as you will be. They prey on military. TSP is your dream. Get all the info you can and know that it is very safe.............

<{POST_SNAPBACK}>

 

 

I agree with the aforementioned statements. Stay away from places like "First Command". The only people consistently making money at that company are the folks who work there. You only have to look in the parking lot and see the cars the sales reps are driving to know that they are scamming GI's.

 

TSP is a GREAT way to save money! It is before tax money (lowering your annual tax burden) and when you leave the service you can roll this money into another 401/403 savings or an IRA.

 

Do a little research about financial planning and investing and I am sure you won't be disappointed with your choices.

 

M.

[BrwnEyedGirl]

I am ex Navy and my DH is active duty Navy.

 

He has TSP and he contributes 9%.

 

We used to belong to NFCU but have since moved to USAA.

 

For educational purposes we both got the GI Bill. I am currently using mine now to finish my advance degree.

 

Good luck in the Navy.

Edited June 26, 2005 by SDMuse

[soldiergurl74]

USAA is great. I concur with TSP and staying away from the scams!

 

Good luck in the Navy!

[ratback5]

Something no one mentioned, when you get out the navy in 4 yrs, your time can

count if you work Federal gov't in some other capacity. Also

some states will credit your military time ( or let you buy it) towards the state retirement system.

Chris

[MistakeOfPast]

I was like you when I was 17, Marine Corps. I wanted a career, but I was injured in Desert Storm and now at retirment status.

 

contribute to edcuation so that you will have the college fund when you get out

 

while you are active duty make it a PRIORITY to get as many class credits as you can so that the military picks up part of the tab and they will transfer when you get out

 

get the military star credit card so that you can establish good credit

 

make friends at every port and don't burn bridges

 

and stay true to yourself and to your faith

 

God Speed!

[Aztec]

First of all, congratulations on 2 things: serving your country and having the intelligence to think about your financial future.

 

 

I wish I had the same financial mindset back in my army AD days. Being an enlisted, we don't get much. One thing a lot of young recruits neglect to sign up for is the GI Bill. They don't look at the positive side of this. I heard that for educational benefits, the government pays more than it used to in my days which was only 70%.

 

I think the minimum contribution to Roth is $100/mo., I don't know if there's a minimum initial deposit. I don't know a whole lot about TSP. Overall saving money rather than wasting it on booze while off duty is much better.

[Madriz]

Hi!

 

Navy wife here.

 

When Dh and I got married he was an E3. I was working and making ok money (more than him anyway). Neither of us had much savings though.

 

We started out with a Roth IRA directly taken from our bank account each month. It's a Legg Mason Value Trust and I started with $50/mo each person, no minimum enrollment if I remember correctly. It is now higher, but not maxed.

 

Dh also enrolled in TSP, a must I truly believe, for any military member. We started out at 5% and have increased it 1% each year since. Unfortunately, the military doesn't match like the civilian government does. However, DH's home state does not require him to pay state taxes. I consider it our match.

 

As DH advanced, and of course I'm still working, we were able to put money into short term savings as well as long.

 

We have NFCU but their interest rates, well everyone's interest rates, suck. YOu aren't earning much money with a regular savings account. But once you save up enough you can move it into a money market account which has slightly better returns.

 

We also banked any special pays, bonuses etc.

 

The most important thing is to live within your means. And definitely do not fall for those furniture, computer and pay-day loan scams. Figure out a budget and start investing where you can. I think $50-100 a month is great. You have a lot of time to start adding more as you earn more.

 

I believe after you make E3 or E4 you can live out in town. A lot of young single people will room together, split the rent, all while banking full BAH, freeing up extra money.

 

Good luck!

[millyjb]

Not sure how it is far Department of Navy jobs but with DOD Army Civilian jobs they have a calculation that they do so that you have to "buy back" your military time. I did 10 years and paid about 5k over a period of time. Now the 10 years that I did in the military is added to my 5 years federal time.

 

It is awesome that you are thinking ahead! It is never too early to start saving! Also the best advice that I ever received was from my buddy in the mlitary and that is USAA. I have had MANY moves and they are awesome when it comes to insurance!

 

 

 

Something no one mentioned, when you get out the navy in 4 yrs, your time can

count if you work Federal gov't in some other capacity.  Also

some states will credit your military time ( or let you buy it) towards the state retirement system. 

Chris

<{POST_SNAPBACK}>

Edited July 25, 2005 by millyjb

[breeze]

I live in the Norfolk/Va Beach area, military family - I second the warnings about the predators. Find a mentor who knows the ropes, and never get involved in anything without checking with him/her first.

[BrwnEyedGirl]

I lived in Va Bch on and off for 9 years. I don't miss the heat or the hurricanes. I was there for Isabel.

 

Military Hwy and Little Creek are the worse places for those fly by night places.

Edited July 26, 2005 by SDMuse

[gamine]

So much great advice here and on the rest of the board.

 

Husband just left the USCG a few months back, and my brother and SIL both ex-Army.

 

We weren't posted near any of those fine credit unions mentioned up-thread, so we got Bank of America-Military Bank, which we've generally been satisfied with. I can refer you if you'd like, I think they have a promo going on. Anyway, the benefit with them is that you can use almost any BOA branch to deposit your money, and they have something called a flex account. You have one main checking account, plus a flex checking for when you're travelling. That meant I could deposit a set amount for my husband to use while travelling, without it affecting our main account.

 

We've also been very happy with USAA insurance - they are repeatedly noted as one of the top firms by Consumer Reports. A group of us were in an accident, my friend the driver had USAA, and they treated him VERY well.

 

Definitely, definitely, get the GI Bill, and if your schedule merits, take some subsidized classes while you're active duty - as MistakeofPast said. You might be able to go for a bachelors AND an advanced or professional (MBA, JD) degree that way once you're out. Lots of people skip it and then change their minds later on.

 

Make sure to pay extra for the GI Bill "kicker" - it ends up being a few hundred more in benefits every month, depending on what service ... for USCG I think it's $150 or so extra a month.

 

Another investment thing to research (we're not there yet) is the housing loans. My brother bought a house on a great VA loan, paid it off, sold the house, then was able to get another VA loan to buy another property. They made a profit. We know quite a few USCG folks who were able to build up a great real estate portfolio.

 

Last but not least... This might be a controversial topic, but since many people marry a little younger in the military (even during/right after boot camp), make sure when you get married, that you find someone who you can discuss money with, who's willing to have frugal habits and actively plan a family, if the two of you wish. Being a saver and marrying a spender is tough - it's even more tough if you're under way half the year and relying on your young wife or husband to take care of bills. I mean, this is true for anyone, civilian or military, but I know of some unhappy divorces that might have been prevented if they'd slowed down a little, and talked about money and family planning early on.