After perusing the TSP website I am curious about some things I noticed.

I note that the funds are [passively managed] what the hell does passively managed mean? If it means what i think it means why are the operating/management expenses similar or higher than actively managed funds?

For as much money as they are collecting to [passively manage funds]. Why does that website suck so much it is not very user friendly imnho. For example of a user friendly site check out the Vanguard of Fidelity fund site for comparison.


To be fair its better than nothing for savings but not much. Personally I will max out our self directed IRA before dropping a dime in the TSP. It has limited choices with average or les than average returns as oppose to whats available in a IRA .

I would say the tax exempt deposits would be benefical in some circumstances. IE you get a 6 figure bonus while deployed or something along those lines. But for the average joe and jane a Roth IRA maxed out before any TSP deductions are put in would be the way to go.

Also civilian goverment employee's apparently get a matching bonus for their TSP contributions. How come AD/NG/Reserv folks get a healthy dose of F U from the goverment treasury ? P

Numbers,

The term 'passive investing' refers to an investment that attempts to track an unmanaged group of stocks bonds or other investment assets. An example would be the a TSP domestic equity fund that tracks the Whilshire 5000 (actually 7000 individual stocks) on a market-weighted basis.

As for your complaint about the TSP fee being too high, though I don't know what plan documents your were looking at, the TSP definetly has rock bottom expenses. I believe they are in the range of 4 bps to 10 bps per year, which is certainly on par or better than similar offerings from Vanguard.

As for the issue of not getting any or (in the case of high sought military positions), very little of a match. I would guess the reason behind a lack of the match is that fact that a person who serves 20-years+ gets a pension. No way you find that type of benefit in the private sector.

'On Target'- Motto of 1/84 FA (LAR)

Al,

Thanks for shoring that up.

Let's see while in the military, you get an allowance for being away from your family for more than 30 days (250 a month), you get an allowance for eating your meals (BAS), you get an allowance for renting a place or paying a mortgage (BAH), you get an allowance if you live overseas or certain conus locations (COLA),if you are overseas in a hostile place you don't pay taxes and you get extra money for being there, you get free medical for you and your family, you get free dental and cheap monthly payments for your family, you get 30 days of leave every year, and you never have to worry about getting laid off or fired from your job unless you majorily, majorily screw up. Then on base you have a movie theater that is either cheap or free, you have a gym and a pool that you can use for free (some dependents have to pay), you have a grocery store that sells things cheap, you also have a major department store that doesn't charge taxes, you can take a military flight for free and the list goes on from there.

It isn't like you are being forced to use TSP it is your decision to do it. If you want to invest out in town then do so, but if you want to use it then do it. My dh has used TSP for yeas and feels safe about it. Oh yeah, did you know that you can actually get a "loan" from TSP if it is necessary, whether it is to go for school or buy a house.

quote:

Originally posted by Navywifeinparadise:
Let's see while in the military, you get an allowance for being away from your family for more than 30 days (250 a month), you get an allowance for eating your meals (BAS), you get an allowance for renting a place or paying a mortgage (BAH), you get an allowance if you live overseas or certain conus locations (COLA),if you are overseas in a hostile place you don't pay taxes and you get extra money for being there, you get free medical for you and your family, you get free dental and cheap monthly payments for your family, you get 30 days of leave every year, and you never have to worry about getting laid off or fired from your job unless you majorily, majorily screw up. Then on base you have a movie theater that is either cheap or free, you have a gym and a pool that you can use for free (some dependents have to pay), you have a grocery store that sells things cheap, you also have a major department store that doesn't charge taxes, you can take a military flight for free and the list goes on from there.

It isn't like you are being forced to use TSP it is your decision to do it. If you want to invest out in town then do so, but if you want to use it then do it. My dh has used TSP for yeas and feels safe about it. Oh yeah, did you know that you can actually get a "loan" from TSP if it is necessary, whether it is to go for school or buy a house.

Simply to adress a few things in your post that you can verify at your conevenience.

Umm the Air force is in the process of rifing is it 40 thousand personell ?

The "free flight" program is a myth under the current regulations. Unless your a pilot/flightcrew and or in the position to order yourself up some military transport to go with a phone call or a fax. The chances are pretty slim. In fact if someone that did not fit the above criteria that everything worked just right for a "free flight". I would give them a twenty and have them buy me some lottery tickets P

To bad I can't just give the goverment the earnings of a minimum wage job for a week for my soldier to stay home and call it even P.

quote:

Originally posted by 10996278:

Simply to adress a few things in your post that you can verify at your conevenience.

Umm the Air force is in the process of rifing is it 40 thousand personell ?

The "free flight" program is a myth under the current regulations. Unless your a pilot/flightcrew and or in the position to order yourself up some military transport to go with a phone call or a fax. The chances are pretty slim. In fact if someone that did not fit the above criteria that everything worked just right for a "free flight". I would give them a twenty and have them buy me some lottery tickets P

To bad I can't just give the goverment the earnings of a minimum wage job for a week for my soldier to stay home and call it even P.

Actually those "free flights" are possible, it is called Space Available. You can fly just about anywhere you want when you take vacations. From Italy to Japan to Germany to Australia, the cost to you, depature tax (if it is a foreign country) and lunch (if you buy it). Your chances of getting on it, usually pretty good. We have flown from Hawaii to California and back twice. We know people who have gone from Florida to Hawaii to Japan. People who have gone from Virginia to Spain or Germany. You can sign up online and if you are AD then you have a better chance of going than anyone else. These are families that are going, including the kids. Some are AD or spouses and others are retirees. They have flown after planning it for months or doing it at the spur of the moment.

Hey Numbers,

quote:

Originally posted by 10996278:
snip~To bad I can't just give the goverment the earnings of a minimum wage job for a week for my soldier to stay home and call it even P.

Can you clarify what you meant by your statement?

I just took a look at the TSP Fund Facts site. 4 of the funds are 6 basis points (0.06% fee), 1 is 5 basis points (0.05% fee), and the last one is a blend of the other five. That is one of the cheapest investments in existence in the entire world - bar very, very few. The infamous Vanguard S&P 500 Index Fund has an expense ratio of 18 basis points, which is 300% of the highest of the TSP expense ratio. Make no mistake, your opportunities within the TSP offer some of the most cost-effective investments available to "average joe" anywhere. The only way you could actually find a cheaper alternative is through structured products available to high net worth folks.

quote:

To be fair its better than nothing for savings but not much. Personally I will max out our self directed IRA before dropping a dime in the TSP. It has limited choices with average or les than average returns as oppose to whats available in a IRA .

I would say the tax exempt deposits would be benefical in some circumstances. IE you get a 6 figure bonus while deployed or something along those lines. But for the average joe and jane a Roth IRA maxed out before any TSP deductions are put in would be the way to go.

I am a huge proponent of the Roth IRA, and I tend to agree with you. If due to opportunity cost, you have to choose, most of the time I recommend a Roth first. Every person's situation is different, but most of time, if you still qualify for a Roth, you should invest in a Roth.

If you absolutely need the current deduction, then utilize a Traditional IRA before the TSP. No IRA will have fees as low as the TSP, but if done wisely, the extra you pay in fees will be mitigated through higher performance and flexibility of investment choices (big debate, but I am 100% confident of that bold assertion).

If after fully contributing to your IRA (either Roth or Traditional) you still have funds earmarked for retirement savings, then definitely take advantage of the ultra-low-cost, vanilla TSP. It'll never outperform the market, but it will provide reliable index tracking and easy of use. Hope this helps.

OK, I will address just about everything you listed:

Seperation allowance: Current news story: Troops to serve 15 month tours with 12 months home. WOW! $250 a month! ridiculous.

BAH: Covers apartment rental in most places, how dare you the military member actually expect to live in a newer house to rent or actually buy one. Case in point: Fort Rucker, AL. E5: With dependents-$753. Current rental rates for 2 bedroom-$750, mortgage of average home price of 200K is $1300 a month.
Oh yeah, and you can always live on base! Great substandard duplexes that resemble the best examples of the projects. How embarrasing!

Overseas hostile: Gee, I don't know, just the word hostile means alot to me.

Free medical? I love this one most of all. I have had "free" medical as a dependent and now as a spouse all my life. Tricare Prime is free but it stinks. I have never had to fight so much for standard care in my life. For our "free" medical we get to see a PA in a military hospital that closely resembles a county health department. Don't even get me started on the level of care. I just feel awful sorry for AD members who have no choice at all.

30 days of leave huh? Yes, true on paper. I can't count the number of use of lose that we have lost over the years thanks to units being understaffed, deployments, etc.. Yeah, you get em, good luck in using em.

Commissary: Not a bad deal if you can weed through the already expired merchandise of the meat that goes bad the day after you buy it.

PX: In the market for a camera? Yeah, they got em, top of the line. Need a comforter set? Only if you want to pay for a designer one. A few good deals are to be had such as on perfumes but generally the store is geared toward a colonel's family. Want to know how they get everyone else to shop there? A little thing called an Exchange Credit Card. Ingenous idea they had.

Space A travel? Great that you actually got to use it. However, I have heard nothing but negative stories on this lately. It is getting almost impossible to use especially with the deployments.


Now, let's take the salary of a military member and add all of the proposed "benefits" that they recieve and then for comparison, what they would make in the civillian sector (taking into account the 24/7 work day that comes with deployment) and what it would cost him for all of these "benefits" if he paid on his own, and low and behold, your "benefit package" doesn't add up to a whole lot os marbles does it?

Plain and simple, it is embarrasing what the military is paid for what they do, no matter what token benefits you want to throw at them. The fact that 30% of our military live below the poverty line and spouses are using WIC, that 30 days they get off doesn't sound so great when you have nothing to eat during it.

That's my soapbox rant, take it or leave it.

quote:

Originally posted by 10996278:


Simply to adress a few things in your post that you can verify at your conevenience.

Umm the Air force is in the process of rifing is it 40 thousand personell ?

The "free flight" program is a myth under the current regulations. Unless your a pilot/flightcrew and or in the position to order yourself up some military transport to go with a phone call or a fax. The chances are pretty slim. In fact if someone that did not fit the above criteria that everything worked just right for a "free flight". I would give them a twenty and have them buy me some lottery tickets P

To bad I can't just give the goverment the earnings of a minimum wage job for a week for my soldier to stay home and call it even P.

If everyone thought like you, there would be no one to protect the Country. Although, it is a very noble and patriotic thing for an individual to enlist in the Armed Forces, you seem to have sour grapes about YOUR soldier. You're not alone and he wasn't forced to enlist. Sure, the Military is not perfect, but at this point, you'll just have to live with it as others like you, who do not complain.

I was single when I enlisted and I didn't complain about the pay, leave or anything else I was eligible for. I simply wanted to serve My Country as a Marine. Plain and simple.

I was curious about the "low pay" aspect of the military, and since I am no longer AD I went to the DFAS site to check-out how my former peers are doing. They are now O-4, with 14 years of service, with some of them actually O-5s, but this math is calculated on the prior.

Base Pay: $72,912 / year

BAH (tax equivalent)with dependents: $18,805/year

BAS (tax adjusted): $3,212

They are pulling down $95k/year pre-tax. That's over double the average income in the US. They're actually in the top 1/5 of income earners in the US.

They can also "retire" in 6 years and IMMMEDIATELY start pulling retirement benefits that will likely continue for 50-60 years. This benefit also has a COLA, just to make it super-sweet. Almost no one in civilian life will have that sort of amazing benefit. Perhaps there is a 42 year-old CEO out there somewhere that was able to cut this sort of deal. Not likely, though.

But I'm sure someone will argue that officers are well paid, and enlisted get the shaft. Well, there's no arguing the facts, officers do have a higher pay grade. But let's see how a 10-year E-5 is doing at age 28.

Salary: $31,356/year

BAH (tax adjusted, with dependent): $11,400/year

BAS (tax adjusted): $3,206/year

Clothing (AF, male, tax adjusted): $873

So the total for an Air Force E-5, 28 years old, with a wife and a child, is $46,835/year. That is indeed below (slightly) the median pay in the US, which is about $48k. In other words, at age 28 they make more than half of America. Pay only goes up for them from here, which means they will continue to out-pace civilian peers in terms of pay. By the time they are 38, they can retire and immediately start drawing $25k/year, and continue to do so (COLA) for the rest of their lives. Tell me that's not the sweetest deal going.

I didn't do the math for a 22 year old E-3, but I would hope it is well below the national average, as it should be. To argue otherwise is a detachment from rationale thought.

I'm sure I've made some people angry with this post, this post of facts, but please point out where the facts are incorrect or any oversights.

In these days of fast trading, I'm a bit surprised to see that there is no one here talking about ETFs, Exchange-Traded Funds. "ETFs for Dummies," might be the best resource for beginners!