Active duty 10 years in

[Smug]

Good evening,
I'm 30 and coming up on 10 years of enlisted service, with that I'm inclined on staying till 20 and collecting the pension. Rough math at current E-6 pay grade about $2000 monthly. Wife currently doesn't have to work and chooses not too. I have not been maxing out my TSP that's currently ~55k in L2050 fund. I'm struggling with the idea of maxing out the contributions but would like to. I don't have any auto payments other than my wife's car ~12k that we use as a means to build credit history for her. I enjoy silver bullion and precious metals have currently ~$20k @$25.00/ozt silver in my possession. Edit" I forgot to mention I also recently put $15k in a few usaa mutual funds 5k in each growth fund, science and technology, and international. As well as 13k in savings account. Also some individual stocks on Robinhood all at loss currently total investment there of ~$800." I'm not sure what I want to achieve as far as retirement is concerned or when is the real question I guess. I love the idea of not working I'm not sure of what's enough or what my expectations truly are. Not having an income is a strange idea to me so I will probably maintain some type of part time job.
Well that's a bit about me I look forward to reading what is available here an thanks in advance for the advice.

 

[Fire26]

I am a retired E7 from the USAF and plan on working until 56, when my youngest graduates high school. In addition to the pension don't forget the medical, the Tricare benefits are a godsend if you want to retire early.

The TSP is great but if you want to retire before 59.5 you will need a good chunk outside of retirement accounts as well.

Next, move your mutual funds from USAA and NEVER invest with a bank, please look at index funds from Vanguard, Schwab or Fidelity. Same with your individual stocks, you won't find many people on here that recommend individual stock or precious medals unless they have a high net worth and can afford the potential losses.

Also, what is the point of the Silver? And even more so why hold the physical metal when you take a large hit when you sell it?
In the past 10 years the S&P 500 (VOO) is up 274% and silver is down 24% bring that out to 30 years and it is S&P up 1096% and Silver up "only" 484% (Source: https://www.longtermtrends.net/stocks-vs-gold-comparison/)

You are investing a decent amount of money for an E6, I think you just need to get more focused, stay away from individual stocks and precious metals and stick with the Bogglehead method of index investing

Here is a great calculator that you can play with numbers to see what you need to retire: https://calculator.ficalc.app/

 

[Smug]

I do realize that the silver isn't the best place to put the amount of money that I did. I was coming to that conclusion already after reading some more on these forums. Mostly I think I got caught up in the hype of it last year but I do like the idea of just having it and passing it along to my children if I ever have some. I'm going to stop purchasing it for some time now.
What is the concern with the USAA funds, it is actually victory capital that the funds are managed by. I assume vanguard has lower fees or something.
Glad to hear that you're doing well as retired E-7, That jump to the next pay grade brings alot more responsibility. I will dig into bogleheads and try to see why vanguard over USAA today, thanks for your input it really is appreciated. I really am trying to find that path forward as well as the destination.

 

[Fire26]

Mostly Fees for the USAA (Victory) funds, throw some numbers in the calculator I linked to and see what the fees will do over 40 years of retirement. In my case going from a .1% (reasonable self managed index) to a 1.2% (investment advisor type fee) made over a $1M difference on the low end and a $9M on the high end. Don't ever let anyone tell you fees don't matter.

As for the silver, invest the money and you will have more to give the kids some day than the silver will ever be worth.

~Q

Edit: Just looked ad the fees/expensed at VC and you should run away fast! USAA should be embarrassed to send people there! Open an account at one of the low cost brokers above, transfer in there and set up automatic investments.

I would like to suggest you listen to a few episodes of the "Talking Real Money" podcast, great on your afternoon drive...

 

[Fire26]

Read this for info on fees:
https://accessibleinvestor.com/investment-fees-matter/

 

[pacergal]

Welcome and thank you for your service.
If you have not run across his writings, look up nords on this forum.
He has much information on military/finances/retirement planning. I found good info even though I am not military.

 

[smalltownguy1]

What are you doing with the rest of your time in the service?
I was E5-E6 then got boarded for the army physician assistant program and retired as an O5 with 27 years. Tricare for life make a big difference in your ability to retire.

 

[SnowballCamper]

Welcome! Did you stick with the old retirement system or switch to the new BRS?

I saved a chunk in my TSP before military retirement. It is a bit of a hassle to withdraw it before 59.5, but one way is commonly known as a 72t plan (Substantially Equal Periodic Payments). The hang up with it is that you can't legally change the payment amount once it starts (the TSP will let you and you'll suffer the tax penalty consequences). I like the simplicity and low cost of the TSP, but for others that is a bit of a restriction.

Another option is the Roth IRA ladder, where you do conversions to make the money count as contributions to a Roth IRA which you can then take out without penalty before 59.5.

I had grown quite bitter as I approached 20 years, but four years into retirement the bitterness wanes substantially.

Oh, and go see the Doc every time you hurt. The VA will pay you later. What doesn't kill you *doesn't* make you stronger.

Oh, and seriously consider Warrant or commissioning options (if you're not too old). Just compare half of O4 over 20, with half of E8 over 20.

 

[Bamaman]

Smug: Congratulations on your 10 year anniversary in service, and you're presently at where so many of us were at your age. Your biggest assets are that you have many good years ahead of you to save (time) and compounding of interest (appreciation).

We see so many of those take 20 years and out in the service, but they just about all retrain for another job in private life. And they do just fine in civilian life. I have two close friends retired 30 years as Colonels, and they both obtained jobs they plan to work at for 10 years.

On the other side, I have seen times when a previous POTUS retired 450 Army Majors at one time. And I have three friends that were E-5's @ 13 years in the Marines that not given the option of re-upping. Things can just be in an uproar often in the military.

Being able to retire 20 years would be nicer if you had really substantial assets in retirement accounts at that time. Is there a chance that your wife will be interested in going to work in order to get to the next level in savings? That might be the difference that allows you to take a second Early Retirement instead of working way up into your 60's.

 

[Nords]

Welcome and thank you for your service.
If you have not run across his writings, look up nords on this forum.
He has much information on military/finances/retirement planning. I found good info even though I am not military.

Thanks, @pacergal!

Welcome to the forum, Smug.

Good evening,
I'm 30 and coming up on 10 years of enlisted service, with that I'm inclined on staying till 20 and collecting the pension.

I’d suggest taking the next 10 years one obligation at a time. Stay on active duty as long as you’re feeling challenged & fulfilled, but when the fun stops then it’s time to consider the Guard or Reserve.
https://the-military-guide.com/dont-gut-20-leave-active-duty-reserves-national-guard/

I enjoy silver bullion and precious metals have currently ~$20k @$25.00/ozt silver in my possession. As well as 13k in savings account. Also some individual stocks on Robinhood all at loss currently total investment there of ~$800." I'm not sure what I want to achieve as far as retirement is concerned or when is the real question I guess. I love the idea of not working I'm not sure of what's enough or what my expectations truly are. Not having an income is a strange idea to me so I will probably maintain some type of part time job.

You’ve picked some assets and funds, but it’s hard to tell whether you have an asset allocation. It’ll greatly accelerate your progress by helping you focus on whatever funds support your timeline.

You could work through the asset allocation info at Bogleheads:
https://www.bogleheads.org/wiki/Asset_allocation
https://www.bogleheads.org/wiki/Military_finances

You could also greatly simplify your asset allocation by reading “The Simple Path To Wealth.” You can find the book at your library or read The Stock Series of posts... one or two posts per week:
https://jlcollinsnh.com/stock-series/
Invest most of your savings in passively-managed index funds with low expense ratios. If you want to hold alternative assets like silver or individual stocks then limit their overall asset allocation to 10% of your total investments. 10% is big enough to move the needle on your net worth if you’re a brilliant investor, and small enough to limit the damage when you’re... not.

Edit" I forgot to mention I also recently put $15k in a few usaa mutual funds 5k in each growth fund, science and technology, and international.
What is the concern with the USAA funds, it is actually victory capital that the funds are managed by. I assume vanguard has lower fees or something.

You’re paying very high expense ratios at USAA. They weren’t considered high in the 1990s or even the early 2000s, but today they’re simply dragging at your feet on the path to FI. If you decide to hold funds in growth, S&T, and international then look for their indexes at larger firms like Vanguard, Fidelity, or Schwab. One of the world’s cheapest international index funds is the TSP’s I fund.

When you reach financial independence and start withdrawing from your assets at the 4% Safe Withdrawal Rate, a 1% expense ratio (from a fund or from a financial advisor) means that every year you’re turning over a quarter of your withdrawals to a fund manager. Meanwhile the bigger companies can do it for just a few hundredths of a percent.

Victory Capital bought the funds from USAA and continues to license the USAA name, but the turnover has not gone well. Neither company has been particularly good at helping their customers with investments, and even Vanguard does a much better job with customer service.
https://the-military-guide.com/usaa-victory-capital-and-schwab-now-what/

I think you’ll get the best of both low expenses and good customer service with one of the big three.

 

[rwdflynavy]

Welcome!

Retired Navy here after 28 years. Life is Good!

As an example of high cost of Victory fees, I pay .03 percent for a total market MF, Vanguard VTSAX. My wife's USAA fund moved over to Victory where the S&P 500 fund has a fee of .14 percent. That's on my short list to move to Vanguard.

As others have said, figure out your AA (Asset allocation plan), get out of "precious" metals and into the market. I highly recommend JL Collins The Simple Path to Wealth. A great book to figure out the right AA for you and your family.

You've met Nords. He's a national treasure for anyone who has or is serving. Check out his books and read all his posts!

 

[OldShooter]

... I also recently put $15k in a few usaa mutual funds 5k in each growth fund, science and technology, and international. ...

Welcome, @Smug. There have been several comments about fund fees, but there are more fundamental issues:

First, no one can successfully pick winning sectors, which is what you are trying to do. There is a thing usually called a "quilt chart" here: https://www.callan.com/periodic-table/ The point of it is to show that sectors go in and out of style randomly or near-randomly. So also will go your sector funds -- randomly good, randomly bad.

Second, and related to fees, "stock picker" funds will on average underperform low cost broad market funds at least by the amount of their fees. There is 50 years of data and some simple arithmetic that proves this.

So, the combination of random sector performance and consistent "stock picker" underperformance is why the winning ticket ends up being broad, low-cost, index funds. Here is a short and easy to read book as an introduction: "The Coffee House Investor" by Bill Schultheis https://www.coffeehouseinvestor.com/ (This is Bill's first book; read it before reading his second one.)

IF you are a reader, come back and we'll bury you in book recommendtaions. Another sample: "The Bogleheads Guide to Investing" by Taylor Larimore et al https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365