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nunya

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Posts posted by nunya

    Aviation Continuation Pay (ACP - The Bonus)

    in General Discussion

    Posted

    If the regionals fix their pay, the AF won't just have a problem with retention; they'll have a problem with recruiting.  I had a student in primary that left the regionals for the Navy mainly due to the low pay.  O-2s make more than regional FOs.  Can't quote stats, but there are certainly some AF pilots that joined because the civilian path wasn't financially realistic.

    Investment showdown -- beyond the Roth, SDP, & TSP

    in Squadron Bar

    Posted

    I follow the Lazy Portfolio theory (4 fund to be specific).  Not very glamorous, but I'm a believer.  You can do it with ETFs or mutual funds.  Pros and cons to each method.  With only $10K to invest, ETFs have a lot of benefits.

    https://www.bogleheads.org/wiki/Lazy_portfolios

    As for brokerage, I'd say start with building your asset allocation in generic terms.  X% small/mid/large cap, Y% bonds, Z% real estate, etc.  Then go out in the ETF world and find the funds or stocks that you want to plug in to those niches.  If two families offer the same fund (S&P 500, for example), then the lowest expense ratio wins.

    Finally, find the lowest cost brokerage to make those trades happen.  TD Ameritrade has ~100 commission-free ETF options from several fund families.  Fidelity offers iShares commission-free.  Or just open a Vanguard account and use their ETFs.  Other companies have a fund or two that are cheaper, but as a whole, the lowest expenses are at VG.

    VSP W2

    in General Discussion

    Posted

    As ya'll start doing your taxes, keep in mind the penalties start at 3 months uncovered.  If you only have 1 two-month break, you'll be ok.  If it's more than that, you need to get that fixed so you don't get hit with the obamacare tax, er, shared responsibility payment.

    PCS Weight Station Costs

    in Squadron Bar

    Posted · Edited by nunya

    No, it's not reimbursed.  Your expenses are in essence tax deductible in that the taxable portion of your PPM check is reduced by the amount of your expenses.  Should have been spelled out in your PPM brief when you left your last base.

    Thrift Savings Plan (TSP) Q&A

    in General Discussion

    Posted

    I couldn't max both until I was sr capt.  Other guys with dual incomes were putting away their entire paychecks as Lts.  The mindset/lifestyle choices are more important than the numbers.

    The Roth IRA has some benefit as an emergency fund in dire straits.  The Roth TSP has the benefit of lower expense ratios.  Which is better depends on your situation.

    • Upvote 1

    Thrift Savings Plan (TSP) Q&A

    in General Discussion

    Posted

    11 minutes ago, bluedevil said:

    My main question after reading some comments is why the heavy push on a Roth IRA that caps at $5500/yr?  In the long run, the compound interest on annual contributions of $17,500 in the TSP should beat out even the best performing IRAs... or am I missing something?  

    vs1kp.jpg

    "You need to be maxing BOTH the TSP and an IRA when you're able."

    • Upvote 2

    Thrift Savings Plan (TSP) Q&A

    in General Discussion

    Posted · Edited by nunya

    TSP isn't a managed fund at all.  TSP is a plan housing several index and target date funds.  You could say the Lifecycle funds are "managed" because the weightings were set by a manager, but the underlying funds are index funds, so even that's a stretch.  That's part of what keeps the expense ratios incredibly low.

    bluedevil, I think your question though is about asset allocation.  We'll assume we're only talking about your retirement assets - more about that later on.  You can google "asset allocation" and find months of reading if you desire.  I'll give you my OPINION.  I'm not a CFA or any other credentialed anything.

    As a 1Lt with a stable job and many, many more years left in your career, I'd be (and I was) very aggressive.  100% stocks.  S or C fund is the only question, and I'd do a mix of both.  (I get my international exposure via non-TSP funds because I want broader exposure than what you get in the I fund.)  Maybe 70/30 C/S, maybe 50/50.  The C is going to do better in some parts of the business cycle, the S is going to do better in others.  You're better off not timing it.  Read up, pick your allocation, and leave it alone.  I don't like the Lifecycle funds because I think they waste space.  L2050 right now has almost 10% in the G fund.  In your mid-20s, I consider the G fund a waste.  There's no reason to accept that low of a return when you can handle more risk.

    You need to be maxing BOTH the TSP and an IRA when you're able.  Preferably both of the Roth persuasion, too, because your taxable income/AGI while in the military is about as low as it'll ever be.

    Now, as to your comprehensive financial strategy:  Retirement is only one piece, under which you have your TSP, your IRA, eventually your 401K, etc.  You also need an emergency fund, savings, checking, etc.  Read up on those topics and decide how to allocate your assets across the entire spectrum.

    I love talking about this stuff, but again, I'm not your advisor.  If you want professional help, look for a CFA that charges by the hour.  Get them to make you a plan and go from there. 

    • Upvote 2

    Thrift Savings Plan (TSP) Q&A

    in General Discussion

    Posted · Edited by nunya

    Statistically, you're better off maxing out your TSP as early as you can anyway, instead of trying to plan it so you put in your maximum dollar in December.  (3.33, repeating, of course.)

    https://pressroom.vanguard.com/content/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf

    In this paper, we compare the historical performance of dollar-cost averaging (DCA) with lump-sum investing (LSI) across three markets: The United States, the United Kingdom, and Australia. On average, we find that an LSI approach has outperformed a DCA approach approximately two-thirds of the time, even when results are adjusted for the higher volatility of a stock/bond portfolio versus cash investments. This finding is consistent with the fact that the returns of stocks and bonds exceeded that of cash over our study period in each of these markets.

     We conclude that if an investor expects such trends to continue, is satisfied with his or her target asset allocation, and is comfortable with the risk/return characteristics of each strategy, the prudent action is investing the lump sum immediately to gain exposure to the markets as soon as possible. But if the investor is primarily concerned with minimizing downside risk and potential feelings of regret (resulting from lump-sum investing immediately before a market downturn), then DCA may be of use. Of course, any emotionally based concerns should be weighed carefully against both (1) the lower expected long-run returns of cash compared with stocks and bonds, and (2) the fact that delaying investment is itself a form of market-timing, something few investors succeed at.

    And yes, TSP will take care of any overage.  Just be careful if you have more than one account (i.e. airline and TSP).  Neither knows the other exists and both will allow you to contribute up to the maximum, then it's on you to withdraw the overage.

    Free app for tracking mil pay, DTS, AROWS etc.

    in Squadron Bar

    Posted

    Got it for my Moto X running 5.1.  Overall I like it.  I've been using a homemade spreadsheet with the same functions, but this one fits in my pocket.

    I did have one recurring crash and I sent a report to Google about it.  It crashed if I used the back button while in the TDY TRACKER function.  Of course I can't recreate it now.  Will Google send you the crash report and log files? 

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