I don't think it will make that big a difference, I think external factors like the economy and wars have a much greater influence. I guess I am also hoping I am rut and you aren't for the military's sake.
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NDAA FY2016 Changes to Military Retirement
- Thread starter Maxillarious
- Start date
I don't think it will make that big a difference, I think external factors like the economy and wars have a much greater influence. I guess I am also hoping I am rut and you aren't for the military's sake.
This could be great, think of all the people who hit 10 years, pick up Maj, LCDR, staff or CPO then generally suck for the next decade because if they leave they walk away with nothing. It may not solve the problem entirely but having some pocket money, (even just $50k-100k ) during transition may make leaving a better option than hanging around.
Spekkio
He bowls overhand.
The match would cost them about 50-75k per sailor in 2015 dollars over their entire career, and that's assuming everyone contributes 6% of their pay. Still short of $350k. For a 4 and out enlisted Sailor they are looking at like 7k and for a 10 and out Sgt or E-5/E-6 like 20k.
Remember that BAH is being cut to 95% of base housing cost by 2020 and the proposal included making families pay their own health insurance if not using the MTF (offset a bit with a BAHC). So there's more expenses for mil families coming down the pipe to reduce Uncle Sams matching.
So again, until we see half a mil bonuses no one is going to be sticking it to the man.
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All or nothing binary thinking is leaving out the middle ground that many of us here belong to: the Reserves. Go to the airlines, get your seniority #, yet still have a government security blanket if you lose your medical or have some other disastrous event. If you play your cards right, your reserve retirement could be substantially higher than your active duty retirement, although a decade or so later.
Spekkio
He bowls overhand.
If you don't have a clue what makes you think it's off?
SN Timmy needs to build a liquid cash reserve to afford misc expenses when transitioning and using his GI bill to attend college. He also should build enough to have a down payment on a house, since having no mortgage and only property tax + utilities + food for living expenses is a far greater return on financial security in retirement than any IRA.
Spekkio
He bowls overhand.
Anything more than 6% average return is a pipe dream. Forget it. You should plan on 3-4, anything else is gravy.
Aside from that, every IRA finanial calculator on the web is wrong but they don't give a shit because it's only function is a marketing tool. 100×.9×1.24 =/= 100×1.07×1.07. All calculators use the latter formula for average returns. Without running market profile simulations those calculators are fiction.
If it were so simple to make 7% guaranteed compounded gains then no one would take the risk to open a business. This is just a spin so people feel better when their employers take away or reduce pensions.
Had dinner last night with some folks who mentioned there are big, big changes coming with the new tricare contract being negotiated with DoD right now. The new retirement plan isn't "great", but considering the pain that is coming with our countries rising debt levels, it's better than what a lot of folks are going to get. Gross national debt is already above GDP and is expected to go vertical, rapidly around 2020 - mostly because of Baby Boomers consumption of Medicare and Medicaid. Pay close attention to the coming changes in Tricare - it's not gonna be pretty.
Any thoughts on which investment firm to use? I have heard good things about Vanguard - the others seem to have higher fees, which I am getting tired of paying, especially after watching Frontline on PBS. http://www.pbs.org/wgbh/frontline/film/retirement-gamble/
I'm using Vanguard for my Roth IRA with a target date retirement fund and I have no complaints. Their expense ratio is very reasonable, less than .2 %, which is less than USAA for a similar fund. It doesn't come close to matching the TSP expense ratio of .029%, but it is very competitive. The few times I've talked with their customer service people, they were very helpful. Of course, YMMV.
I'm using TD Ameritrade, they have a list of about 100 ETF's that you can buy commission-free for your IRA, including about 30 Vanguard funds. No complaints about them so far, I've been there about three years or so. Like Ektar said, the TSP still has the lowest expense ratio, the lowest one on the commission-free ETF list is 0.05% for the Vanguard Total Stock Market Index. But obviously the IRA offers more choices in terms of diversifying.
Rob, does that mean we can plan on equal big big changes to Medicare and Medicaid or is the military going to take it in face because there's nothing we can do about it?
Not a shot at you just tired of our benefits being messed with but not seeing a corresponding change in anyone else's.
Spekkio
He bowls overhand.
With a Roth option, max out TSP first. Even Vanguard's admiral funds (10k minimum) can't beat TSPs fees. You do get more resolution of control with Vanguard in terms of a wider variety of funds, but I'm not that market savvy for it to matter to me.
After that it's personal preference. I use Vanguard for my IRA and kids 529 plans.
One thing to note is that Vanguard's one stop shop funds also have a significant contribution to the international index. With the European and Japanese markets in the shitter with little hope of turning around soon I basically did my own picking and choosing moving some international to large cap US. However they are hardly unique here since TSPs L funds do the same thing.
Basic math skills.