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Is a Command Financial Specialist a substitute for an accountant?
- Thread starter AllYourBass
- Start date
Yeah, whoops- reading is a breeze when you don't worry about comprehension. Sorry about that. There isn't anything wrong with having mix of Roth and traditional retirement assets. Either one, or a mix of the two is better than having none at all. I've heard great things about Vanguard, and Fidelity. USAA actually used Vanguard funds (or at least used to) and takes a cut for being the middle man like they do with so many other products, in return for being able to get into them for a smaller amount of money etc. If the subject money started off as a tax deffered 401k and you're okay with that, are you opposed to making it a tax deferred, traditional, IRA or would you rather keep it how it is?
I can't speak to in service. But I called up and talked with the TSP personnel and found out that you can roll funds into TSP from another 401k. They have a form for it on their website. I know you can do this while retired. I don't see why you couldn't do it in service.
Spekkio
He bowls overhand.
Then honestly, Roth TSP might be your best option.
If company A charges 1/2 the fees of company B, you can get the same bottom-line returns even if company A's funds don't perform as well as company B's. It's one of the most important attributes when selecting a fund. So, looking back over the last 5 years or so of performance, I would have to pay someone else money to create a portfolio to match what TSP did (around 20% overall ROI), or delve into learning more about the market than I care to do. TSP's biggest drawbacks were no Roth and no match. Now there's a Roth, and you don't get a match on an IRA, sooo...
Of course the best way to max gains is to create a stock portfolio yourself, but that requires knowledge about company strategy and where the market is going well above my head and ability to keep up with to be anything more than gambling for me.
USAA's fees are just not competitive, and are a big reason why I am switching to Vanguard. But honestly, now that TSP has a Roth I am going to max that out before I start putting money into the IRA.
Another option within the TSP realm that's relatively new is their varying assets fund (my term...can't think of the official term). This can be even more fire and forget, because you pick the year (or something close to it) that you want to retire and then "they" adjust the holdings in the different types of accounts as time goes by (stocks, bonds, etc). So for now, lots of your money would be in stocks, but as you grow closer to your retirement (not your Navy retirement, but you're actual forecasted retirement), the money gets moved into less volatile options (like bonds), all "automatically" (by the fund manager). I've started doing this with my T. Rowe Price IRA and when TSP started doing it, I moved my TSP funds into the same thing there.
-1 for lifecycle funds. They're just a bit too hands-off in my opinion. And most of them come with higher expense fees. Although the TSP doesn't charge any additional fees for its lifecycle funds, the same may not be true for funds held in an IRA. I think most half-competent people could read two or three books (Stocks for the Long Run, for example), spend like an hour every three months reviewing their allocation, and do much better than lifecycle funds, especially since there's no fee to rebalance.
Spekkio
He bowls overhand.
You don't even really have to move it that often. You just have to be able to understand some financial jargon and pick a few mutual funds that mimic what you think would be the proper amount of aggressiveness/conservativeness that you desire.
He said he wanted fire and forget. You want Semi-active. One does not preclude the other (I have both, by the way).
Spekkio
He bowls overhand.
Yea, now that TSP has a Roth option, the only reason to invest in a Roth IRA is to have more control over which funds to invest in (which you said you aren't ready for right now). So you should max out Roth TSP before looking to other funds until you're edumicated on what to do with the increased control to beat the higher fees. Or hire a financial advisor and let him do it for you, but that also costs money.
At your age and salary the higher tax bracket is going to be a minimal hit. If you have the funds to pay the tax hit roll it into a Roth IRA. Pick a low fee Vanguard fund and you will do fine. Take the time to learn how to manage your own money, but below are a few things that have worked well for me:
- live within your means
- never spend your next raise before you get it
- save off the top (and add at least some of every raise you get)
- Never pay a commission on any investment. Never.
- Never believe anybody (car salesman, financial advisor) that tries to push you to buy something before you can take time to think.
- Don't get greedy
- Buy less house than you think you can afford
- Car loans can be a necessary evil when you are young, but pay them off early and buy less car than you can afford.
Finally, there have been a lot of stay/go threads around here recently. Just remember that if you put yourself in a situation where you can't afford to miss a paycheck or risk a salary reduction then you don't really have a debate - you have to take the Man's money and do what he says.
- live within your means
- never spend your next raise before you get it
- save off the top (and add at least some of every raise you get)
- Never pay a commission on any investment. Never.
- Never believe anybody (car salesman, financial advisor) that tries to push you to buy something before you can take time to think.
- Don't get greedy
- Buy less house than you think you can afford
- Car loans can be a necessary evil when you are young, but pay them off early and buy less car than you can afford.
Finally, there have been a lot of stay/go threads around here recently. Just remember that if you put yourself in a situation where you can't afford to miss a paycheck or risk a salary reduction then you don't really have a debate - you have to take the Man's money and do what he says.
^^what bert said. Just because you're getting a fat navy paycheck now, don't spend it. Start investing early, get your loans paid off and save as much as you can by buying less than you can afford. TSP is a great option, when I used one, my financial advisor routinely told me it's the best thing going (with a few expceptions), my TSP made close to 20% last year. Max it out when you can with bonuses and deployment monies.
I would also recommend looking into life insurance (no I don't sell it). By the time I started thinking about it when I was around 30, I had just been diagnosed with skin cancer and no insurance company since then will touch me. Yes, the wife and kids get 400K SGLI, but that hardly replaces my lifelong earning potential should I kick the bucket in a few years. You can get a small policy for low premiums that you can increase should the need arise.
I would also recommend looking into life insurance (no I don't sell it). By the time I started thinking about it when I was around 30, I had just been diagnosed with skin cancer and no insurance company since then will touch me. Yes, the wife and kids get 400K SGLI, but that hardly replaces my lifelong earning potential should I kick the bucket in a few years. You can get a small policy for low premiums that you can increase should the need arise.