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I'm deployed for 3-4 months and planning on throwing as much into Roth TSP as possible (new my pay code stops you at 60% base pay and 65% flight pay). I understand I'm limited to 18K for the Roth IRA.

My question is, after I return home, can I still continue towards the 53K limit for combat zone pay or can money only be invested towards that higher limit while the member is deployed? My guess is the latter, but I'm trying to figure out a way to max out TSP for the year and go above the 18K overall limit. My pay is not making it easy for us to invest.

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While you're deployed, you can only contribute a max of $18,000 to the Roth TSP. After you hit that max, you can only make traditional contributions beyond.

Once you get back, you can contribute up to $18,000 on top of what you've contributed while you were downrange.

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PBS and Frontline did a great episode on 401Ks and the market. Index funds for the win.

http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/

I am in fidelity value discovery and perm portfolio while the wife is in fidelity contra. Based on what we have with them it is crazy what we are eating in expenses. This was eye opening to me thanks for posting this.

Sent from my iPhone using Tapatalk

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While you're deployed, you can only contribute a max of $18,000 to the Roth TSP. After you hit that max, you can only make traditional contributions beyond.

Once you get back, you can contribute up to $18,000 on top of what you've contributed while you were downrange.

Not sure where the second $18K comes from since the overall limit allows up to $53K total contributions.

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Not sure where the second $18K comes from since the overall limit allows up to $53K total contributions.

That was in Whitman's instance where he won't get close to the $53K limit while he's deployed. Say he socks away $18K into Roth TSP while he's deployed; once he gets back, he can contribute another $18K to traditional TSP (because his deployed contributions didn't count towards his $18K regular limit, and because he hasn't exceeded the $53K overall limit).

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I think you overestimate basic financial education and properly-placed values among Americans. Members of my own extended family spend $300 on a hockey jersey, yet have 0 savings or investments. Comes down to values, and values are hard to change in adulthood.

I've known enlisted that stopped trying to make more rank because increasing their income would cause them to lose their WIC payments.

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That was in Whitman's instance where he won't get close to the $53K limit while he's deployed. Say he socks away $18K into Roth TSP while he's deployed; once he gets back, he can contribute another $18K to traditional TSP (because his deployed contributions didn't count towards his $18K regular limit, and because he hasn't exceeded the $53K overall limit).

Incorrect (though, you could look at it exactly the other way around--put $18K toward traditional with CZTE money, then put $18K toward Roth). The $18K limit refers to the "elective deferral" limit, which applies across all similar employer-sponsored retirement account--TSP, 401(k), 403(b), etc., whether traditional, Roth, or a combination. If you're AD, the 401(k) issue doesn't apply; if you're Guard or Reserve, it's important to understand that all the limits involved apply to total contributions to ALL such accounts. Roth contributions count against the elective deferral limit, regardless of whether they're "after tax" because they came from tax-exempt earnings or if they've actually come from taxable income.

If you want no-kidding source documents, you'll need to dig through the IRS' instructions; otherwise, the TSP site makes it pretty clear: https://www.tsp.gov/planparticipation/eligibility/contributionLimits.shtml

If it's important to you to max your Roth TSP, AND you want to maximize your total contribution above the elective deferral limit (via CZTE money), you must avoid putting any CZTE money into the Roth. While deployed, put as much as you can into your traditional TSP (I'm assuming you're not above the officer limit, i.e., you get 100% tax exempt), being careful not to exceed $35K ($53K - $18K). Then, during non-CZTE months, put your money into the Roth side. Adjust as required based on your specific situation (number of months deployed, how much you can afford to put in, how close you can get to the limits, etc.).

I'm deployed for 3-4 months and planning on throwing as much into Roth TSP as possible (new my pay code stops you at 60% base pay and 65% flight pay). I understand I'm limited to 18K for the Roth IRA.

My question is, after I return home, can I still continue towards the 53K limit for combat zone pay or can money only be invested towards that higher limit while the member is deployed? My guess is the latter, but I'm trying to figure out a way to max out TSP for the year and go above the 18K overall limit. My pay is not making it easy for us to invest.

Short answer: no.

Longer answer: CZTE money is month-by-month--you can't "save" it up to be used in another month. TSP contributions have to be made directly from earnings (you can't make a "deposit"). BL, you can only put money "above" the $18K limit *to your traditional TSP* during CZTE months. If you want to max out your Roth, "save" at least $18K (don't contribute more than $35K of CZTE) for non-CZTE months, then make those contributions when you're home.

See my reply to Disregard for more details.

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Did DFAS screw up anyone else's Roth TSP contributions for February? Nice of them to tell me ahead of time that they're going to take all of my Feb contribution from my end of month paycheck.

Also sweet that they emailed my CC to let him know that I won't be receiving any money at the end of the month. Now he wants me to go to A&FRC and shit to look into getting an advance for March. I told him I got more than I expected for the first half, and I'm not retarded so I'm good.

I guess more of you tards live check to check than I thought.

I remember seeing some email traffic in Jan regarding needing to fill out some paperwork to continue Roth TSP contributions. Did you do that?

ETA: apparently you need to make sure your Roth TSP contributions are characterized by a percentage of pay vice an actual dollar amount. http://www.holloman.af.mil/news/story.asp?id=123432619

Edited by stract
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I remember seeing some email traffic in Jan regarding needing to fill out some paperwork to continue Roth TSP contributions. Did you do that?

ETA: apparently you need to make sure your Roth TSP contributions are characterized by a percentage of pay vice an actual dollar amount. http://www.holloman.af.mil/news/story.asp?id=123432619

Yep, did that in January. Then DFAS "forgot" to take my mid month contribution in February.

Only real reason I posted in this thread is as a heads up to everyone else who uses TSP. Fantastic expense ratios, good funds, but it can be a pain in the ass to put money into it.

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Yep, did that in January. Then DFAS "forgot" to take my mid month contribution in February.

Only real reason I posted in this thread is as a heads up to everyone else who uses TSP. Fantastic expense ratios, good funds, but it can be a pain in the ass to put money into it.

Ditto. Made the required input, did not get desired February result. Maybe next time.
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I know Mint.com has been mentioned here before, which I've been using the past 4 years.

I just started using Personalcapital.com & have been pretty impressed with their app. Similar to Mint, but more focused on investments. After you upload your accounts they have a nice tool that shows all of the fees you are paying & estimates what you'll pay over the years as your account grows. Very eye opening. My 1.24% fee with USAA's precious metal fund is not so bueno. Highly recommend the app though.

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If it's important to you to max your Roth TSP, AND you want to maximize your total contribution above the elective deferral limit (via CZTE money), you must avoid putting any CZTE money into the Roth. While deployed, put as much as you can into your traditional TSP (I'm assuming you're not above the officer limit, i.e., you get 100% tax exempt), being careful not to exceed $35K ($53K - $18K). Then, during non-CZTE months, put your money into the Roth side. Adjust as required based on your specific situation (number of months deployed, how much you can afford to put in, how close you can get to the limits, etc.).

Longer answer: CZTE money is month-by-month--you can't "save" it up to be used in another month. TSP contributions have to be made directly from earnings (you can't make a "deposit"). BL, you can only put money "above" the $18K limit *to your traditional TSP* during CZTE months. If you want to max out your Roth, "save" at least $18K (don't contribute more than $35K of CZTE) for non-CZTE months, then make those contributions when you're home.

I was recently asked a question via PM that makes me think I may have been unclear above. In an attempt to clarify:

If you want to maximize your tax advantage, don't put any CZTE into the Roth. The point is to "retain" your ability to make tax-deferred contributions to the traditional TSP. Since the Roth "counts against" your $18K whether or not made from CZTE funds, you will forego the opportunity to make a traditional contribution (and defer those taxes) when you're home.

If your goal is to max the Roth ($18K) and you're not worried about getting a current-year tax advantage, it doesn't really matter when you put into the Roth. If your goal is to max the amount in your TSP *and* max the Roth, you should put non-CZTE money into the Roth (up to $18K), then put CZTE money into the traditional (up to $35K). If your goal is to maximize your current-year tax advantage, put non-CZTE money into the traditional (up to $18K) and CZTE money into the traditional (up to $35K). As always, you have to choose between Roth & traditional for that $18K, and it's important not to exceed $35K of traditional contributions from CZTE money, lest you lose the ability to max the $18K portion (due to the overall $53K limit).

My personal approach was always to maximize the current-year advantage--I maxed the traditional, both non-CZTE & CZTE. YMMV, and there are strong arguments for using the Roth, too.

All of the above assumes (a) you're not above the officer CZTE limit; and (b) you're not deployed the entire calendar year. In the case of the former, you have to take into account that you have "some" non-CZTE money each month. In the case of the latter, you may be making enough CZTE money not to have to worry about "saving" your $18K Roth contribution until you get home, and/or you actually may NOT be able to make a tax-deferred traditional contribution for the year (if you don't have any taxable income to begin with).

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  • 1 month later...

I'm up 20% on Halliburton....which is offsetting most of my other energy stocks I bought on the way down......keeping about even the year. Today I bought: BBEP, LINE, SDRL, SD, HK.......I have been reading a lot on how many speculators are starting to dump money in to energy as its held steady low (i.e. the bottom) for a bit...I figure in 5 years I'll be in the black.

I still can't pull myself to dump all my savings into it though so I just DCA the market each month so and look for the ones who have been crushed but still have some clout.

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  • 3 weeks later...

Energy seems to be a popular speculation on the forums so I thought I would post this. I believe his presentation was televised on CNBC so if you dig online you can probably find the recording which gives it a little more life. If you can't find the video though the PDF has a transcript of his comments on each slide. I highly suggest you read through this if you're considering investing in any of the fracking companies.

https://www.greenlightcapital.com/926698.pdf

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  • 4 months later...

For the airline guys (or anybody with a decent 401K option):

How do you practically handle your TSP alongside your 401K?  I'm thinking about not contributing anything to my 401K (no match at my airline) and putting my entire Guard paycheck into the TSP.  TSP has lower expense ratios and I'll invest in broad market index funds in the TSP or the 401K. 

What am I overlooking in my plan?  Any other techniques?

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For the airline guys (or anybody with a decent 401K option):

How do you practically handle your TSP alongside your 401K?  I'm thinking about not contributing anything to my 401K (no match at my airline) and putting my entire Guard paycheck into the TSP.  TSP has lower expense ratios and I'll invest in broad market index funds in the TSP or the 401K. 

What am I overlooking in my plan?  Any other techniques?

With no match on the 401K then you can't really beat the TSP in terms of expenses or ability contribute (i.e. high limit).  Having the Roth option in TSP is also outstanding.  To me there are very few downsides to the TSP unless you want to invest in some kind of more exotic security rather than common, broad indexes.  TSP + Roth IRA for you and any associated spouse is a pretty damn solid plan.

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Thanks gents.  For now, I'll use the Roth variety IRA and 401K, no matter which one I use.  The TSP seems like the winner as long as I'm using Roths.  When I switch to Traditional, state taxes make the airline 401K mo betta.

Edited by nunya
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That's a problem I hope to have sooner than later. 

Even then, since we're covered by employer sponsored retirement plans, we hit the traditional IRA deductible limits (118K) before we hit the Roth limits (183-193K) anyway.

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  • 4 months later...

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