New Member, Just Wanted to Say Hi

[Henman004]

Hello all! My name is Jeff. I am 27 years old, and have been in the USAF almost 10 years. My plan is to complete another 10 years, and hopefully be FIRE'd.

I have been dreaming about early retirement for years. Allow me to give you some background info:

I started working when I was 12, detasseling corn. I had my first real job at 15, bagging groceries. I worked a few other jobs until I was 18 and joined the Air Force.

Fortunately, I have a father that was looking out for my future because he helped me open my first Roth IRA when I was 17. He helped me invest some money my first year, but once I joined the Air Force, I was out on my own. I didn't really get serious about saving/investing until I was about 20, and deployed for the first time. I figured I needed to do something with my money rather than just spend it on things I don't need. Long story short, I have been maxing out my Roth IRA since I was 20 years old.

Today, I have about $60K in my Roth IRA, invested 100% in 4 different equity index mutual funds. I have a taxable account with another $60K (I match my Roth IRA dollar for dollar). I do not contribute to TSP because my taxes are already very low, and US military does not give a match. I am recently married with my first baby on the way. I helped my wife open up a Roth IRA, and she already has $10.5K in it.

Although becoming FIRE'd is very important to me, I do take the time to enjoy life. I spent 5 years overseas, travelled to more than 70 countries, and I am getting ready to be stationed overseas again in the UK.

At this time, I don't really have any questions, but I am looking forward to imparting some of the wisdom I have learned in my young age, as well as, picking the brains of some of the much "wiser" not "older" folks out there.

 

[omni550]

Welcome aboard, Henmann! And thanks for your service.

Sounds like you're well on your way. You'll fit right in with the LBYM folks here.

omni

 

[Henman004]

Thanks for the warm welcome, Omni

 

[Midpack]

Welcome aboard, and thanks for your service.

 

[braumeister]

I didn't really get serious about saving/investing until I was about 20

Oh no, another total slacker!

Sounds like you're well ahead of the vast majority of people you know. Good for you! Welcome to the board. There is a lot of wisdom here, and folks are very willing to share it.

 

[Henman004]

Thanks Midpack!

Braumeister, NOBODY I know is interested in FIRE. That's why I'm here. I am looking forward to getting some input on a question about my taxable account, but I will be posting that in another thread.

 

[nash031]

Thanks Midpack!

Braumeister, NOBODY I know is interested in FIRE. That's why I'm here. I am looking forward to getting some input on a question about my taxable account, but I will be posting that in another thread.

Not surprising to hear, far too many young (and not so young!) soldiers, sailors, and airmen put little to no thought into retirement and their future. You are WAY ahead of the game! Well done!

Welcome aboard from a fellow servicemember (36yo with 14 years Navy here) who is aiming for FI by the 20 year mark, then fully or semi-retire. Not interested in a second career at this point, though that's always subject to change!

 

[Henman004]

Thanks Nash, and best of luck to you on becoming FI and/or RE. I am not interested in a second career either, but I would like to get into the land lord thing to generate passive income. Well, passive, except for when maintenance/renovations need to be done.

 

[obgyn65]

Welcome to the forum.

 

[hsmom4]

Welcome to the forum. We're a military family too and you're a lot further that we were at your age. We didn't really start saving until we were in our early 30's (long story on that one). My only recommendation would be to revisit the TSP program. It's a really good program with very low expense ratios. Most of our money is parked between TSP and Roth IRAs. But then again, since you intend to be a passive landlord, maybe the taxable account is a better fit for you.

Anyway, best of luck to you. My DH has between 5-10 years of service left and retirement can't come soon enough!

 

[Henman004]

Thanks OBGYN65!

hsmom4, you are certainly right about those expense ratios. I looked at the TSP G-Fund, and it was .027% for 2012. My S&P 500 index fund with fidelity is currently charging .05% While it is not a huge difference, it still costs an extra 23 cents for every $1K.

The taxable account is a better fit for me, for now, because my wife is not working, and we will need something to bridge the gap between active duty military retirement and tapping into the Roth IRAs at 59 1/2. However, if our household income increases substantially once my wife starts working again, I may revisit the TSP.

I'm sure your husband loves the military just as much as I do, but I have to agree, retirement can't come soon enough! Best of luck to you as well!

 

[Nords]

The taxable account is a better fit for me, for now, because my wife is not working, and we will need something to bridge the gap between active duty military retirement and tapping into the Roth IRAs at 59 1/2. However, if our household income increases substantially once my wife starts working again, I may revisit the TSP.

You might want to take another look at ways to tap into the TSP (and the Roth TSP) after you leave the service (resignation or retirement). You can already withdraw your Roth IRA contributions whenever you want (no penalty). The Roth TSP is especially easy to roll over to a Roth IRA, and then five years later you can start withdrawing its contributions if necessary. Other alternatives include a TSP--> IRA rollover followed by a Roth conversion, or a TSP--> IRA rollover followed by a 72(t) SEPP. There's even a provision for a one-time hardship withdrawal.

In general, servicemembers who are planners & savers tend to overshoot the mark. You could probably afford to max out the TSP (and your Roth IRA) for another five years (to the 15-year point) and then start shifting your savings to taxable accounts. Once you retire you'll find that your belt & suspenders planning has more than enough safety margin. Every person's situation is different, of course, but I get a lot of 20-20 hindsight from military retirees who wish they'd put more into their TSPs. I'm one of them.

Once you leave the military then you can no longer contribute to the TSP. That not only deprives you of the rock-bottom expense ratios but also the asset-allocation advantages of the "F" and "G" funds, let alone the equity funds.

 

[hsmom4]

However, if our household income increases substantially once my wife starts working again, I may revisit the TSP.

Definitely keep it as an option and I would suggest you look at it sooner, rather than later. As Nords mentioned above, many military families miss out on this great saving vehicle. If we could go back in time, we would have put more money into TSP a few years ago.

I'm sure your husband loves the military just as much as I do, but I have to agree, retirement can't come soon enough!

I'm not sure if "love" is the right word, but he's been serving in the military (Marines and Army) for 22 years. It's been a LONG, but interesting ride. Our plan is to fully retire in about 5 years. Hopefully, with the great resources available on this board, we'll make it happen.

Take care and thanks for your service.

 

[Henman004]

Nords/hsmom4, thanks for the advice. The Roth TSP is definitely something I've been interested in since the announcement of it last year. You've both given me some thinking to do. As of now, I am focusing on this PCS move to the UK, but once we arrive, it could be a great opportunity to establish a new budget and invest some money into the TSP.

 

[mjgruber]

Welcome

Welcome! and best of luck !

 

[HawkeyeNFO]

You are already waaaaay ahead of your peers. Keep the press on. I hit 16 yos last week, and am looking into the Roth TSP options. I recommend putting money into the TSP & possibly the Roth TSP simply for the low costs involved. But first, max out your IRA (Roth or traditional).

Enjoy the UK, I'm hoping to get overseas duty for my next job. Stick around and share your questions - lots of smart people here.

 

[Henman004]

Thanks, mjgruber

HawkeyeNFO, anywhere in particular you want to get stationed?

 

[nash031]

You might want to take another look at ways to tap into the TSP (and the Roth TSP) after you leave the service (resignation or retirement). You can already withdraw your Roth IRA contributions whenever you want (no penalty).

Once you leave the military then you can no longer contribute to the TSP. That not only deprives you of the rock-bottom expense ratios but also the asset-allocation advantages of the "F" and "G" funds, let alone the equity funds.

I always tell anyone who will listen that if they're not maxing their TSP, they're throwing away free money. That's in two forms - tax-advantaged investment AND expense ratio. You can't beat it most years. As of right now, my TSP is our largest single portfolio component, though taxable will catch up in a year or two.

I need to look into Roth TSP and see if it's a good idea for me. Will read more on it so I can provide some thoughts down the road.

 

[Henman004]

Hello all! My name is Jeff. I am 27 years old, and have been in the USAF almost 10 years. My plan is to complete another 10 years, and hopefully be FIRE'd.

I have been dreaming about early retirement for years. Allow me to give you some background info:

I started working when I was 12, detasseling corn. I had my first real job at 15, bagging groceries. I worked a few other jobs until I was 18 and joined the Air Force.

Fortunately, I have a father that was looking out for my future because he helped me open my first Roth IRA when I was 17. He helped me invest some money my first year, but once I joined the Air Force, I was out on my own. I didn't really get serious about saving/investing until I was about 20, and deployed for the first time. I figured I needed to do something with my money rather than just spend it on things I don't need. Long story short, I have been maxing out my Roth IRA since I was 20 years old.

Today, I have about $60K in my Roth IRA, invested 100% in 4 different equity index mutual funds. I have a taxable account with another $60K (I match my Roth IRA dollar for dollar). I do not contribute to TSP because my taxes are already very low, and US military does not give a match. I am recently married with my first baby on the way. I helped my wife open up a Roth IRA, and she already has $10.5K in it.

Although becoming FIRE'd is very important to me, I do take the time to enjoy life. I spent 5 years overseas, travelled to more than 70 countries, and I am getting ready to be stationed overseas again in the UK.

At this time, I don't really have any questions, but I am looking forward to imparting some of the wisdom I have learned in my young age, as well as, picking the brains of some of the much "wiser" not "older" folks out there.

It's been about 5 years since my first post, so I thought I'd make a update.

I'll be turning 33 in 2 months, and I have about 5 years left until I hit 20 years in service. I've been promoted twice since my last post. My family and I left the UK about 8 months ago and now we're stationed in Germany. We have 2 kids and don't plan to have any more. I opened up UTMAs for both of them to possibly supplement the cost of college. But, I also transferred my GI Bill to my kids, so that should be the primary means of funding college or some other post-secondary education. I have already served the 4-year Active Duty Service Commitment. I have completed an Associates Degree, several professional licenses, and I will finish my BS Degree in January 2019. My wife is still doing the SAHM thing, and makes about $500/month working from home. Something I didn't mention before is that she has a BA in Communications and is Graphic Designer by trade. She plans to start investing a lot more in her home business once both kids are in school. That should be right around the time we head back to the States, and I will have just 2 years left before I hit 20 years in service.

The Numbers:
My Brokerage: $123K
My Roth IRA: $123K
Wife's Roth IRA: $49K
Kid 1 UTMA: $3K
Kid 2 UTMA: $3K
Total Assets: $301K

I am still not contributing to the TSP. I am putting away about $19K per year, and don't really plan to save much more at this time. I am already on track with my savings goals so the rest gets spent on life.

 

[HI Bill]

NOBODY I know is interested in FIRE. That's why I'm here.

I've never been in the military, but most I know there spend 100%+ of their housing allowances. On Oahu, the AF, Army, Navy and MC parking lots are filled up with shiny new muscle cars and fast bikes. A few of the more forward-looking folks seem to buy houses each PCS, and then develop a rental pool. Great job on the forward looking thinking! I wish I'd started saving earlier. By waiting until 27, it caused my ER to be delayed until 53.