Invest in Your Retirement by Enlisting in the Army

If you are like most people thinking about enlisting in the Army, you’re in your late teens or early twenties and saving for retirement is probably the furthest thing on your mind. In reality, now is the best time to start preparing for retirement and the Army has an investment program to help you – the Uniformed Services Thrift Saving Plan (TSP).
 
Thrift Savings Plan
TSP for uniformed service personnel is an investment plan that you can use to build money for retirement. It functions similar 401(k) plans available to employees in the civilian world. With TSP, you determine how much money you contribute from your Basic Pay before taxes and the money goes into your account through automatic payroll deductions.
 
Contributions
You determine your contributions on your enrollment form by either filling in a set dollar amount or a percentage of your before-tax Basic Pay amount. The advantage of using a percentage is as your pay increases, so does the amount you contribute.
 
As a soldier, you can choose from two types of contributions. The first one, the elective deferral limit, is regular employee tax-deferred contributions limited to a maximum of $17,000 in 2012.  The second, the annual addition limit, are tax-exempt contributions, such as combat pay, with a $50,000 maximum 2012 contribution limit. Also, you can contribute up to 100% of any incentive pay, special pay or bonus pay as long as you are already contributing to your TSP account.  
 
Investing
TSP has six funds to choose from – Lifecyle, G, F, C, S and I. Each fund has a risk factor and potential gain associated with it. The G fund is the most risk-free, with its objective being to produce a rate of return that keeps pace with inflation. In comparison, the I Fund has the most risk and it can fluctuate much like the Stock Market. It may or may not grow enough to offset inflation.
 
One of the best funds for young investors is Lifecycle. With Lifecycle, your investment is optimally balanced between the other funds for risk and expected return based on the number of years you have until retirement. It is the value of time that makes this strategy so appealing. You have the luxury of being able to take more risk now (and potentially earn more gains) because you have more time to recover if you do get into a down market.
 
Loans and Rollover  
Another benefit of TSP is if you need a loan in the future, and your loan meets TSP loan criteria, you can borrow against your TSP account. When you pay it back, you are paying back yourself.
 
The other benefit is if you decide to get out of the Army before you’re eligible for retirement, you can either leave your money in TSP or roll it over to a civilian Individual Retirement Account (IRA). If you decide to stay until retirement,  you will have your TSP money in addition to your Army retirement.
 
When you enlist, start a TSP account right away. With time on your side, and an aggressive contribution strategy, you can build up a sizable account over time.

 

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Thanks for that info. I would

Thanks for that info. I would also like to know which job can a soldier take after leaving the army. So far I think there will be no problem only with freelancing like writing unique papers. But I'd like to know more on this matter.