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.


 
 

 
Johnny Saldivar

Roberson takes command of AETC

Johnny Saldivar Lt. Gen Darryl Roberson, Air Education and Training Command commander, speaks during the AETC change of command ceremony Tuesday at Joint Base San Antonio-Randolph, Texas. Roberson is a command pilot who has mor...
 
 

Payday lenders prey on Airmen

Loans can be very useful in life. From paying off bills to moving expenses, loans can help Airmen out when they need it. Sometimes Airmen are attracted to a less than ideal option of obtaining cash other than getting a traditional loan. What they may not realize is that going to a place that offers...
 
 

Dwell time, PT exemptions for new mothers increase

The six-month deferment for female Airmen to accomplish their fitness assessments following childbirth will be increased to 12 months to align with recent changes to the deployment deferments, Air Force officials announced July 14. The deployment deferment policy, as part of the Air Force’s 2015 Diversity and Inclusion initiatives, increases the deferment from deployment, short...
 

 

Hill activates their first F-35 fighter squadron

The jets won’t arrive for another few months, but Hill Air Force Base, Utah, activated its first F-35 Lightning II fighter squadron during a ceremony July 17. The 34th Fighter Squadron — affectionately known as the Rude Rams — was reactivated, marking the beginning of the F-35’s combat era for both the 388th and 419th...
 
 

Air Force News – July 24, 2015

Hawaii Airmen from the 613th Air Operations Center at Joint Base Pearl Harbor-Hickam were the nerve center for the movement of seven C-17 Globemasters carrying almost 450 U.S. Army paratroopers on a nonstop flight from Joint Base Elmendorf-Richardson, Alaska, to Royal Australian Air Force Base Amberley, Australia. Afghanistan Ten Afghan National Army flight medics and...
 
 

People First – July 24, 2015

AF releases first-term Airman retraining quotas Eligible first-term enlisted Airmen interested in retraining opportunities can review the fiscal 2016 online retraining advisory on myPers. Air Force officials approved 1,599 fiscal 2016 first-term Airman retraining quotas in 45 Air Force specialty codes. Airmen can retrain into a variety of AFSCs, including cyber, intelligence, pararescue, fligh...
 




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>