While deployed to a combat zone, military members have the unique ability to contribute tax-free combat pay to Roth TSP. This benefit can be very powerful especially for senior military officers who can contribute up to $18,500 to Roth TSP and never pay taxes on the contributions or the earnings.
By taking time to educate yourself on investment principles and start building your portfolio early in your career as a military officer, you may increase your chance of long-term success. In general, the earlier you start investing, the better - but here are some basics to consider.
Financial Advisors, myself included, spend a lot of time thinking and talking about investing money to have available for your Golden Years (had to get a cliché in). But, not a lot of time is spent talking about how to best spend that money in retirement. I'm not talking about what you will spend that money on. That is up to you. What I am talking about is where the funds will come from. If you have multiple sources of retirement income, you can improve your results about thinking about which money you will spend first. This is due to a very important acronym...RMD. Required Minimum Distributions can significantly impact your tax picture and how much you will pay for medical care in retirement. Let me explain.
You've decided to "Hang-up" your G-Suit or ABUs or whatever uniform you wear to work each day. You're pretty confident you'll roll into the new job you've been looking forward to and it won't take too much time. If your new job offers a 401(k) (or 403(b) or TSP) there are some things you need to think about AND you need to make sure you don't screw up some other things. By the way, these concepts also apply if you change civilian jobs during a year.
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