Thank you all for the welcome. I'm currently reading "The Military Guide to Financial Independence and Retirement". From browsing the topics on this forum, this site is exactly what I was looking for. Now I need to stay motivated for my financial goals, while staying involved with this forum. Thanks again!
Welcome to the forums, and you're on the right track. Send me a PM or an e-mail if you have questions.
A quick question, since I'm not sure which specific sub-forum I should be posting this in: I'm interested in investing with the potential to access funds in 8-10 years... in other words, after I retire from the Coast Guard in 8 years, I'd like to have access to funds for a house, or travel, or some other goal which I haven't decided upon yet. I already have a Ross IRA that I'm contributing to. What about options for a more short-term (8-10 year) investment? I figure that I can start an investment with approximately $3000, and then make regular monthly contributions. Thank you, and any pointers are greatly appreciated.
First, figure out how much you'll want for your goals-- living expenses (including travel), or buying a home, or a kid's college expenses. If you can save up for that goal from taxable accounts then you're good.
But you should also be trying to maximize your TSP and Roth IRA contributions while you can-- once you're out of uniform then you're done with TSP contributions, and once you stop receiving earned income then you're done with Roth IRA contributions. So ideally your saving/investing effort for FI would be at least 40% of your gross income. You'd max your TSP contribution, max out both Roth IRAs, and save even more in taxable accounts.
Once you ER, you only have to bridge the gap to age 59.5. Some military retirees do this by starting a bridge career, either full-time or part-time. You'll have surprising employment offers come your way ("even as a Bosun's Mate!") or you'll figure out ways to turn your interests into income.
Others live off their military pension, augmented by dividend/interest income or by income from rental property. That's all an asset-allocation decision.
If you decide that you're done working, then you'd spend down your taxable accounts first. Next you can withdraw your Roth IRA contributions at any time for anything, with no taxes or penalties.
While you're spending those funds, you've also started a Roth IRA conversion ladder for five years from then.
1. Upon leaving the military, transfer your Roth TSP to a Roth IRA. After it sits in your Roth IRA for five tax years, that principal of the transfer (but not its gains over those last five years) can be withdrawn free of taxes or penalties.
2. Upon leaving the military, transfer your traditional TSP to a traditional/rollover IRA. Every year, convert some of that account from a traditional IRA to a Roth IRA. (You might have to pay tax on the conversion amount, so you'll try to convert only what you need for each year that's five tax years in the future.) After five tax years, the amount of the conversion (but not its gains during those five years) can be withdrawn free of taxes or penalties.
That's the theory.
In practice, you might not ever need to do more than withdraw your Roth IRA contributions, or possibly transfer your Roth TSP to a Roth IRA (and then wait five tax years). The reason I say this is because you and your spouse will both have plenty of assets saved in taxable accounts (even after maximizing your TSP and Roth IRA contributions). By the time you quit working you'll have lined up your expenses with your values, eliminated wasteful spending, and have most of your budget covered by your pension as well as your dividend/interest income.
So my primary advice would be to keep maximizing those TSP and Roth IRA contributions (and saving even more in taxable accounts) while knowing that you'll be able to tap the tax-deferred money if you really need to. You'll ensure that you enjoy years of the world's lowest expense ratios in the TSP, along with more tax-deferred growth in your Roth IRA.
Here are some more posts with the excruciating details:
Early Withdrawals From Your TSP and IRA After The Military - Military Guide
Funding The Gap: "I Need Money From My TSP!" - Military Guide
When do you stop contributing to tax-deferred accounts? - Military Guide
How Do You Survive A Stock Market Crash? - Military Guide
How Should I Invest During Retirement? - Military Guide (even more spending details)
How much cash in a retirement portfolio? - Military Guide