Air Force

August 24, 2012

Retirement options available for Airmen, federal employees

by Airman 1st Class GRACE LEE
56th Fighter Wing Public Affairs

Saving money for retirement may seem overwhelming, but there is help for military personnel and federal employees.

Some of the retirement plans available are the Thrift Savings Plan, Roth Individual Retirement Account and the new Roth Thrift Savings Plan option, which is scheduled to be available to Air Force and Army personnel in October, according to Cory Carmichael, 56th Force Support Squadron Airman and Family Readiness Center community readiness specialist.

“The TSP is a retirement savings and investment plan for federal employees and military members,” Carmichael said. “It offers the same types of savings and tax benefits that many private corporations offer their employees under 401K plans.”

The advantages of having a TSP is that there is some control for where the retirement income is invested, said Ronald Lewis, 56th FSS A&FRC community readiness consultant.

“The money can be moved to different funds that are more or less risky,” Lewis said. “The more risk, the more chance of a potential return. I say, ‘potential’ since there is no guarantee on an investment.”

While this plan has its benefits, it also has its drawbacks.

With the TSP whether you are eligible to receive agency contributions will depend on how much your agency will put into your account during the years worked and the earnings accumulated over that time. If contributions weren’t previously taxed, they will be taxed upon withdrawal of the funds, Carmichael said.

Unlike the TSP plan where the amount received depends on the years worked and upon one’s agency, the final amount received with the Roth IRA depends on market growth.

“A Roth IRA is an individual retirement account that offers many tax benefits to the future retiree,” Carmichael said. “Contributions to a Roth IRA are made with ‘after-tax’ dollars and account holders do not pay taxes on withdrawals made in retirement. This in itself can be a big advantage for those who expect to be in a higher tax bracket later in life, which allows them to take advantage of market growth.”

Although, the Roth IRA has arguably been the best retirement product available, Carmichael said there is an even better option coming out.

“It’s called the Roth TSP. It can be better since it has very low management fees,” he said. “In addition, with the national budget being the way it is, the likelihood of tax rates going up in future years are very high. It all comes down to whether you’d like to pay your taxes now or later.”

Additionally, Carmichael said the Roth TSP greatly benefits military personnel who are deployed, since essentially no taxes will be deducted from the amount put in or taken out.

As it may be hard to decide what plan to go with, Carmichael recommends speaking with a financial counselor such as the ones in the A&FRC prior to making a final decision.

“If all these choices make you dizzy, speak with someone you trust to help you make a decision,” he said. “Just do it now and not later. I recommend you check out TSP.gov for detailed information on retirement options.”

For more information, call (623) 856-6550. The A&FRC will assist Luke Air Force Base members with additional questions on retirement plans or other finance related issues.




All of this week's top headlines to your email every Friday.


 
 

 
Pg-1-photo-150612-F-EC705-058

Emerald Knights go out with bang

Emerald Knights watch a burning piano during the 308th Fighter Squadron inactivation party June 12 at Luke Air Force Base. The 308th FS and aircraft maintenance unit have packed up and are transitioning to the 314th FS standing...
 
 
2_lemery_d2

Respect — want, earn, give, but don’t lose it

Lt. Col. David Lemery We all want it, some earn it, some are given it and some lose it. Respect can be defined as a feeling of deep admiration for someone or something elicited by their abilities, qualities or achievements. As ...
 
 

Solve problems at lowest level

Crucial in our Air Force environment today is having the proper tools and skillsets available to deal with problems. There is literally something new almost every single day that will invoke problem solving skills. When faced with a problem, an important mindset to have is to resolve the issue at the lowest possible level. Some...
 

 

News Briefs June 26, 2015

607th ACS change of command Lt. Col. Charles Jones will relinquish command of the 607th Air Control Squadron to Lt. Col. Jerald Canny in a ceremony at 8 a.m. Wednesday in Hangar 999.   CMS change of command Maj. Scott Hall will relinquish command of the 56th Component Maintenance Squadron to Maj. Anthony Sutton in...
 
 

Fighting Falcons arrive at Holloman

Courtesy photo Six F-16 Fighting Falcons from the 308th Fighter Squadron at Luke Air Force Base arrive in formation June 16 at Holloman Air Force Base, New Mexico. The 308th FS has inactivated and the soon to be activated 314th FS assumes the 308th FS mission of training F-16 pilots as a 56th Fighter Wing...
 
 
5_Courtesy-photo

Monsoon season blows in storms, rain, dust

Courtesy photo Arizona is known for being sunny with clear skies for the majority of the year, but every year “it” happens. As the clouds roll in, the sky darkens with thunderbolts streaming overhead, and the first drops of...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>