Author Topic: Transferring GI bill..... what else?  (Read 786 times)

DapperD123

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Transferring GI bill..... what else?
« on: July 14, 2017, 06:51:18 PM »
Good evening everyone!

My wife and I just had our first child earlier this year and I'm trying to get some items in place.
I'll be putting my Post 9/11 GI bill into her name here soon.
That should cover a very nice chunk (if not all) of her college.
With that being said, I still want to put some money aside for the future, specifically for her.

I was thinking of putting 10K-20K aside with the sole purpose of being a potential braces fund, high-school vehicle fund, and then a catch all fund for any additional costs that the GI bill might not cover.
 
I've got two questions......

1) Am I completely over-thinking this? Almost being a bit excessive?
2) If this does seem like a good plan, what investment route would you consider?

If I do this I figure I have at least 12 years before I'd realistically be touching any of the money. I was considering putting this into some mutual funds and just letting them ride...... thoughts?

Thank you all for your assistance!


« Last Edit: July 14, 2017, 07:26:19 PM by DapperD123 »
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DapperD123

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Re: Transferring GI bill..... what else?
« Reply #1 on: July 15, 2017, 07:06:18 AM »
I guess another reason I ask is because I am wondering if I am putting this money aside too early?
I could cash flow braces and a car..... then tuck a solid amount away during her high school years for a catch all college fund....


Thoughts on any of this? I'm open to any and all suggestions :D
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davisgang90

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Re: Transferring GI bill..... what else?
« Reply #2 on: July 15, 2017, 07:24:09 AM »
Hey Dapper, Welcome!

1) Yes you are over-thinking and being excessive - welcome to parenthood!  This is a very normal reaction
2) Not a good plan

It is great you are looking to transfer your benefits to your daughter.  Make sure  you don't need them before she does.

A couple things to think about.  Are you already maxing your TSP/IRA contributions?  If not, I'd work on that before laying aside money for your daughter's sweet sixteen Corvette.  Your daughter can get a loan for college, you can't get a loan to retire, so focus on the needs of you and your spouse to prepare for retirement first.

I've paid for 2 sets of braces and they aren't very expensive (and part of the cost is covered while you are in the military), so I wouldn't worry too much about that at the moment.

Without knowing more about your financial situation, those are my thoughts. 

I've been active duty Navy for 27 years (retiring next June) so I'm happy to see another military type here.
Check out my blog.  Early retirement from a military perspective.

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Lepetitange3

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Re: Transferring GI bill..... what else?
« Reply #3 on: July 15, 2017, 08:14:37 AM »
The husband and I are both retired military (navy/marine couple...I know). We have 4 kids. Take a deep breath shipmate and slow down.. 

I would wait on transferring that gI bill.  You could have more children or you or spouse might need to go back to school if/when you leave the service.  Child could decide they'd rather go to trade school or even !join the military straight out of high school.  You have no idea how beautiful baby is going to shape up.  And you've got time.  Those benefits aren't going anywhere. 

Second the maxing that TSP and IRA before you're going crazy planning for daughter.  You know what doesn't help your kids?  If YOUR retirement isn't squared away and they have to fund you in your old age. 

Think of it this way, of baby girl goes to college and needs some loans or she wants a car and has to work for it, this builds character and she's funding her own lifestyle choices.  All good things.  What we don't want is for her to have to fund you and wife because you didn't set yourselves up properly while trying to give her everything. 

All this being said, each of our kids has a joint savings account with us. Depends how aggressive you want to be.  Maybe Vanguard for the first 10 years and then transfer to CD or savings as you get within a year or two of thinking of actually using it.  Any way, we put checks from relatives in the savings account and we toss a % of the extra we have after expenditures and our own base savings/investments into each child's account. 

Here's how hubby and I view these accounts- they're a privelege not a right.  (Except the portion that was gifted by relatives to the child, I keep an excel spreadsheet so I have the breakout on this).  So our plans for these accounts include whatever we think will most benefit the child at any given time- maybe college, grad school, wedding, whatever help might be reasonably needed.  Or if all else fails and we suck and child turns out a mess who can't ever be trusted with the cash, then hubby and I take a consolation cruise and call it a day (mostly kidding). 

The point is, you can't give your kid everything.  You want to.  I know.  Especially military people, because hey you go out, you fight the good fight and you want to make baby's life extra perfect to make up for the time you're sure to miss now and then.  I totally get it.  There's a reason you always see military kids ending up as low level slackers.  Because the parents are making up for things by throwing money at the problem. 

You want to enable your beautiful baby girl to make her OWN way in the world..  Always look at the money in that light and you'll do fine. 

Nords

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Re: Transferring GI bill..... what else?
« Reply #4 on: July 15, 2017, 09:37:22 AM »
... high-school vehicle fund, ...

1) Am I completely over-thinking this? Almost being a bit excessive?
2) If this does seem like a good plan, what investment route would you consider?
Welcome to the forum, Dapper.  I think you're answering your own questions just fine.  My response to (1) is "Oh, yeah" and your answers to (2) can start from these ideas below.

It makes sense to start the transfer process for your GI Bill now, but only because the military services and the VA screw up the paperwork so frequently.  I'd just transfer a month each to your spouse/kid(s) and then wait to see whether a bigger transfer makes sense.  You or your spouse might decide to use the GI Bill a few years down the road to embark on your own bridge careers with salaries far higher than anything the GI Bill could pay for your kid(s).
https://paycheck-chronicles.military.com/2017/05/18/dont-save-gi-bill-kids/

Before you plan your kid's financial life, let's back up for a minute and check the planning for your life. 

What's your plan for the military?  Do you need to save up for a transition fund in the next few years?  (Hint:  please don't tell us that you're going for 20 unless you've already served at least 16.  Only 1 out of 6 servicemembers serves long enough for a pension.  But we realize that you're going to add four years for your GI Bill transfer.)  What's your plan after the military?  What are you doing to get there?

Are you maximizing your contributions to your Roth TSP, your Roth IRA, your spouse's Roth IRA, and your spouse's Roth 401(k)?  Are you saving more in taxable accounts?  (I agree that latter question might not be achievable if you're still pushing to achieve the former question.)  What percentage of your income are you saving/investing for your financial independence?  How long will it take for you to reach FI? 

Are you eligible to convert to the military's Blended Retirement System next January, and if so what have you decided? 

What's the asset allocation plan for your FI investments (including the TSP)?  The reason this question is relevant is because you might consider a similar AA for your kid's college fund.

If you want to build a college fund (pro tip:  it's not your obligation) then you're right to want to start on the compounding now.  But you could put part of those funds in a 529 (2-4 years at community college & State U) and more funds in taxable accounts (in case your kids don't go to college).  Instead of plunking down $10K-$20K today it might make sense to set aside $100-$500/month for 10 years or so, but either decision will get you started toward the goal.  The rest of the $10K-$20K will do much better in your retirement accounts.

I don't know what brought up the idea of braces for a kid who might not even have teeth yet, but the orthodontia tech gets better & cheaper every year.  Cash flow this one.  We didn't even use dental insurance-- we negotiated a cash price with a large discount for paying up front.

Teen drivers don't need their own cars because they'll use your car while they're running all of your errands for you.  Seriously-- I didn't set foot in a grocery store or a Wal-Mart from the time our daughter passed her license exam until we dropped her off at the airport to go to college.  She also drove to all surfing, martial arts training, and other family activities.  In fact I'm having a hard time remembering any moment in the last decade when I was driving a car with my daughter in it. 

Not only does that let you drive less give them more driving practice, but it also lets your insurer offer an "occasional driver" discount to a house with more drivers than vehicles.  The law varies in every state, and who knows where you'll be living 15 years from now.

But instead of taking care of your daughter's financial future, you could teach her to manage her money.  Be alert to her financial training opportunities.  It's as simple as showing her that it takes money to buy things.  When she's 3-4 years old and you go to the grocery store, you could give her 50 cents or a buck for her to buy "one special thing".

For example, on our daughter's 8th birthday we started the "Kid 401(k) Car Fund".  Her allowance went up to $8/week, but $3/week was auto-deducted to the 401(k) (and matched by parental contributions) to save for her future.  It's just like a grownup's 401(k), and on her 16th birthday ("an entire lifetime away!") she'd have at least $5000 in her 401(k) for her driving expenses.

I had to reverse-engineer the matching contributions and the market returns on the spreadsheet, but every 3-6 months we'd review the progress of the Kid 401(k).  It was a great teachable moment for concepts like savings goals, interest, compounding, exponential curves, and spreadsheets.  Of course I'm pretty sure all she heard at first was parental "Blah blah blah" while inside she was thinking "Mustang!  Pickup truck!  SUV!!", but eventually some of the financial concepts got through.

Better yet, it removed all the angst & drama over teen driving and replaced them with realistic expectations.  She knew that when she turned 16 years old then she'd be able to afford a car... and insurance... and maybe even some gas.

If that idea piques your interest, then check your local public library for a copy of David Owen's "The First National Bank Of Dad".  We used all of his techniques to teach our daughter to manage her money as soon as she stopped putting it in her mouth.

You can read more about raising a money-smart kid at this post:
http://the-military-guide.com/raising-a-money-smart-kid/
It also shares what she decided to do with the $5000 on her 16th birthday.  She totally blindsided me, too.
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TabbyCat

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Re: Transferring GI bill..... what else?
« Reply #5 on: July 15, 2017, 09:46:11 AM »
I agree with others, but would add that you can budget and mentally set aside money for braces and helping kids as young adults without removing that money from your current funds. If you need it, you still have it. If you do end up giving/spending it as planed, it's just as easy (or easier) to cash it out of your account when the time comes. 

We also plan to give my husband's post 9/11 GI bill to a kid, but will not be officially transferring it until said kid is about to head to college and we're working out the finances, since so much could change - husband could need it later, kid could get a great scholarship or do 2 years running start and only need 2 more years which would be cheaper to fund in cash, or said kid might not want or need to go to college.  Right now, we are choosing to frontload retirement savings, but we intend to start saving for kid's college soon as well (plan to have more than one kid so someone will likely use it).

DapperD123

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Re: Transferring GI bill..... what else?
« Reply #6 on: July 15, 2017, 09:56:54 AM »
Wow, thank you both for taking the time to respond!
I truly appreciate it. I'm very excited because I can get good feedback from people who can relate to my situation!


There's a lot to respond to, so I'll try to combine both of your things into one instead of multi-quoting.

davisgang90, you mentioned my financial situation. I don't mind sharing that all..... it may show something I am doing wrong and I am all for constructive criticism.

I'm not sure if there is a standard format you'd like it in, but I can try to share it the best I can.

Our combined income is approx 100K. (Ages 29& 30)
We are debt free other than an investment property.

The investment property is valued at 185K and that's pretty true as the homes in the neighborhood are selling for that price.
I've got 105K left on that mortgage at 3%.  So 80K equity?

Currently we are investing roughly 19% of our income to retirement.
That is maxing both of our ROTH IRAs (my Roth is sitting at 84K and my wife's is at 43K) , 5% (of my base pay) to my ROTH TSP (C,S,I funds valued at 70K), and 7% of my wife's base pay to her work 401K (3% matched and only a couple thousand in there. We just moved so this one just started... it will get rolled into her Roth when we PCS again)

12K sitting in a savings account for the emergency account.
5K sitting in a savings account for an investment property emergency account.

Originally I was planning to hammer down on my investment property and have it paid off by 2022, but with the low interest rate and us wanting more property, I've been just stock piling cash in another account. 
That way when we PCS next I can either buy another investment property or if it's a place we don't want to buy, I can just go pay cash for one somewhere else.
That account currently has 54K sitting in it and we are throwing about 2K in there a month.


It seems both of you are recommending making out my TSP on top of my IRA, is that correct?
The only reason I am not making out my TSP is because that money I am adding to the investment property account, I viewed kind of as a "retirement investment".  I could be wrong for thinking that, so please let me know if that's a bad option!

You both touched on waiting for the benefits transfer.  I can do that for sure!
My wife has her bachelors & masters and I'm working on my masters, so I don't THINK we would need it, but you do make a very good point... there could be more babies in the future!


davisgang90, I wasn't sure if tricare paid for braces or not, so I just figured plan for the worse. I also heard that orthodontist will work with you when there is cash involved verse payments. I could be wrong, but I think you're right... I can tackle that when it comes that time. I don't need to have that money just sitting there.


Lepetitange3, to be honest I was going to make a blurp in my OP that said something along the lines of " I am not trying to raise my child an affluent brat" because I can definitely see how this thread could come off the wrong way. But now that you've brought up some great points I have no issue talking about it.... especially with two military members who have children. If anyone knows a good way to get things done then it'll be you two! You were in my exact same shoes.

It was so much easier worrying about just me and my wife, so when my daughter was born it definitely threw a wrench into my planning as far as investments and how I want to go about things.

Truth be told I have NO idea what I'm doing now, but what I don't want is what you explained. The low level slackers. I'm surrounded by friends who have turned their kids into affluent monsters by doing exactly what you explained.
I was so scared to have something like this happen, I've been spending the last 4 months reading book after book, reading post after post, and trying to come up with a game plan so I can teach my daughter how to properly value money, hard work, and live a simple life style like her mom and dad do. We are VERY simple.... older vehicles, live well below our means, don't have cable, etc.
One book that I've been trying to take info from is the "Smart Money Smart Kids" book.

We definitely want her to build her own character!

The idea of your joint savings account sounds like a lovely idea and I really like your plans for it.
I love running spreadsheets so it gives me a reason to play with more :D
Thank you so much for the recommendation.




I appreciate you two taking the time to respond. I had a feeling I was being a little crazy, but I needed to hear it!
Thank you!

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DapperD123

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Re: Transferring GI bill..... what else?
« Reply #7 on: July 15, 2017, 10:14:06 AM »

Welcome to the forum, Dapper.  I think you're answering your own questions just fine.  My response to (1) is "Oh, yeah" and your answers to (2) can start from these ideas below.

It makes sense to start the transfer process for your GI Bill now, but only because the military services and the VA screw up the paperwork so frequently.  I'd just transfer a month each to your spouse/kid(s) and then wait to see whether a bigger transfer makes sense.  You or your spouse might decide to use the GI Bill a few years down the road to embark on your own bridge careers with salaries far higher than anything the GI Bill could pay for your kid(s).
https://paycheck-chronicles.military.com/2017/05/18/dont-save-gi-bill-kids/

Before you plan your kid's financial life, let's back up for a minute and check the planning for your life. 

What's your plan for the military?  Do you need to save up for a transition fund in the next few years?  (Hint:  please don't tell us that you're going for 20 unless you've already served at least 16.  Only 1 out of 6 servicemembers serves long enough for a pension.  But we realize that you're going to add four years for your GI Bill transfer.)  What's your plan after the military?  What are you doing to get there?

Are you maximizing your contributions to your Roth TSP, your Roth IRA, your spouse's Roth IRA, and your spouse's Roth 401(k)?  Are you saving more in taxable accounts?  (I agree that latter question might not be achievable if you're still pushing to achieve the former question.)  What percentage of your income are you saving/investing for your financial independence?  How long will it take for you to reach FI? 

Are you eligible to convert to the military's Blended Retirement System next January, and if so what have you decided? 

What's the asset allocation plan for your FI investments (including the TSP)?  The reason this question is relevant is because you might consider a similar AA for your kid's college fund.

If you want to build a college fund (pro tip:  it's not your obligation) then you're right to want to start on the compounding now.  But you could put part of those funds in a 529 (2-4 years at community college & State U) and more funds in taxable accounts (in case your kids don't go to college).  Instead of plunking down $10K-$20K today it might make sense to set aside $100-$500/month for 10 years or so, but either decision will get you started toward the goal.  The rest of the $10K-$20K will do much better in your retirement accounts.

I don't know what brought up the idea of braces for a kid who might not even have teeth yet, but the orthodontia tech gets better & cheaper every year.  Cash flow this one.  We didn't even use dental insurance-- we negotiated a cash price with a large discount for paying up front.

Teen drivers don't need their own cars because they'll use your car while they're running all of your errands for you.  Seriously-- I didn't set foot in a grocery store or a Wal-Mart from the time our daughter passed her license exam until we dropped her off at the airport to go to college.  She also drove to all surfing, martial arts training, and other family activities.  In fact I'm having a hard time remembering any moment in the last decade when I was driving a car with my daughter in it. 

Not only does that let you drive less give them more driving practice, but it also lets your insurer offer an "occasional driver" discount to a house with more drivers than vehicles.  The law varies in every state, and who knows where you'll be living 15 years from now.

But instead of taking care of your daughter's financial future, you could teach her to manage her money.  Be alert to her financial training opportunities.  It's as simple as showing her that it takes money to buy things.  When she's 3-4 years old and you go to the grocery store, you could give her 50 cents or a buck for her to buy "one special thing".

For example, on our daughter's 8th birthday we started the "Kid 401(k) Car Fund".  Her allowance went up to $8/week, but $3/week was auto-deducted to the 401(k) (and matched by parental contributions) to save for her future.  It's just like a grownup's 401(k), and on her 16th birthday ("an entire lifetime away!") she'd have at least $5000 in her 401(k) for her driving expenses.

I had to reverse-engineer the matching contributions and the market returns on the spreadsheet, but every 3-6 months we'd review the progress of the Kid 401(k).  It was a great teachable moment for concepts like savings goals, interest, compounding, exponential curves, and spreadsheets.  Of course I'm pretty sure all she heard at first was parental "Blah blah blah" while inside she was thinking "Mustang!  Pickup truck!  SUV!!", but eventually some of the financial concepts got through.

Better yet, it removed all the angst & drama over teen driving and replaced them with realistic expectations.  She knew that when she turned 16 years old then she'd be able to afford a car... and insurance... and maybe even some gas.

If that idea piques your interest, then check your local public library for a copy of David Owen's "The First National Bank Of Dad".  We used all of his techniques to teach our daughter to manage her money as soon as she stopped putting it in her mouth.

You can read more about raising a money-smart kid at this post:
http://the-military-guide.com/raising-a-money-smart-kid/
It also shares what she decided to do with the $5000 on her 16th birthday.  She totally blindsided me, too.


Nords,

Thank you so much for taking the time to respond!


I'm currently sitting at 11 years of military service.
My current enlistment will put me at 12, but like you mentioned, to transfer my GI bill, I'll need to reenlist for another 4 years.
That will happen in December because it aligns with my 12 year mark.

I've got a degree in Occupational Safety and Heath and I'm working on my masters in Safety Management.
So after my military career my plan will be to use those along with my military experience to pick up something.
I've been spending a lot of time talking to companies like John Deere, Cat, Lockheed Martin, Bell, Fedex, UPS, etc
They have been giving me great information that will make me marketable for a safety management position or something along those lines.
I've also been very interested in real estate investing. I don't want it to be my main focus because I'd still like to work, but that's a part of the plan.

As far as retirement accounts and investing, please see my post above.
I need to recheck on the blended retirement, but I don't think I will be taking that option.

If we do decide to go the route of sticking money aside for college, then I do like the idea of a monthly contribution verse the giant lump sum.
I had the money for it, so I didn't know if it was smart to just set it up and then check that block in my mental checklist, but I do like your idea better.

My Gramps was a dentist so maybe that's why I randomly thought of the braces thing... or it's just because I'm a weirdo :D it's probably the second part ;)

Thank you so much for posting about "The First National Bank Of Dad" and the money-smart kids post. I love reading stuff like that!




Thank you again for taking the time to write a response! I truly appreciate it!
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DapperD123

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Re: Transferring GI bill..... what else?
« Reply #8 on: July 15, 2017, 10:24:10 AM »
I agree with others, but would add that you can budget and mentally set aside money for braces and helping kids as young adults without removing that money from your current funds. If you need it, you still have it. If you do end up giving/spending it as planed, it's just as easy (or easier) to cash it out of your account when the time comes. 

We also plan to give my husband's post 9/11 GI bill to a kid, but will not be officially transferring it until said kid is about to head to college and we're working out the finances, since so much could change - husband could need it later, kid could get a great scholarship or do 2 years running start and only need 2 more years which would be cheaper to fund in cash, or said kid might not want or need to go to college.  Right now, we are choosing to frontload retirement savings, but we intend to start saving for kid's college soon as well (plan to have more than one kid so someone will likely use it).


TabbyCat, thank you for the response!

I think you and everyone else in here are correct.... I could just cash flow the braces when that time comes.
I've got some money stashed aside, so it was more I had the opportunity now to put it in an account now and forget it. "Set it and forget it" :D

I also don't mind waiting on the GI bill too. At the end of the day we have no idea what could happen in the next 5, 10, to 20 years.... so it is probably smart for me to hold off until the right time.  We could think we have the perfect plan now and it could all get turned upside down in the future!




I think when she was born I just went on crazy dad mode and wanted to do whatever I could to make sure she was taken care of.
I need to ground myself a little and get  back on focusing on my wife and I first, then take care of her in necessary ways!


Thank you again so much for responding. I appreciate it!
USAF

Lepetitange3

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Re: Transferring GI bill..... what else?
« Reply #9 on: July 15, 2017, 10:39:02 AM »
You're totally on the right track in general, and your hearts definitely in the right place.  Nords website is an overflowing fountain of insanely useful info.  Hubby and I essentially did a lot of what he did without the benefit of MMM and sites like his. 

So you're definitely probably looking at 20?  I have to say, the one thing the 20 gets you that is absolute gold beyond the monthly paycheck is the health insurance!  Holy cow.  Husband is on career 2 even though we are FIRE because he loves it.  He has a law enforcement job that still comes with pensions and benefits etc etc but everyone else who is using the health insurance that's considered high end awesome in the civilian world??  They are paying mind numbing numbers from their pay checks, and it's heavily subsidized.  Especially with kids, I go to bed every night saying a little prayer of thanks for Tricare.

You definitely should start some kind of account that lets you compound now.  You have your mind totally correct in this regard.  I would just say- don't lock your mind into one specific use for it.  Since you're aiming to raise a responsible kid, if you get that done, you'll know when the time comes what you want to subsidize and why and BOOM, nice chunk of change sitting there.   

You're a LONG ways away from this, but a note on cars for kid.  My 17 yo son does not have a car and his mean horrible parents will not be getting him one anytime soon.  He is not prepared to pay for the insurance premium increase (very high for teenage males) or gas, and his driving leaves something to be desired despite passing his drivers test.  He's otherwise a pretty solid, good kid.  But that doesn't mean I'm subsidizing a  driving free for all.  It may be different when the other 3 kids get there. 

If you end up with more than one- Every child is different.  Their needs are different.  Keep that flexibility the military has undoubtedly already taught you. 

DapperD123

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Re: Transferring GI bill..... what else?
« Reply #10 on: July 15, 2017, 11:28:36 AM »
You're totally on the right track in general, and your hearts definitely in the right place.  Nords website is an overflowing fountain of insanely useful info.  Hubby and I essentially did a lot of what he did without the benefit of MMM and sites like his. 

So you're definitely probably looking at 20?  I have to say, the one thing the 20 gets you that is absolute gold beyond the monthly paycheck is the health insurance!  Holy cow.  Husband is on career 2 even though we are FIRE because he loves it.  He has a law enforcement job that still comes with pensions and benefits etc etc but everyone else who is using the health insurance that's considered high end awesome in the civilian world??  They are paying mind numbing numbers from their pay checks, and it's heavily subsidized.  Especially with kids, I go to bed every night saying a little prayer of thanks for Tricare.

You definitely should start some kind of account that lets you compound now.  You have your mind totally correct in this regard.  I would just say- don't lock your mind into one specific use for it.  Since you're aiming to raise a responsible kid, if you get that done, you'll know when the time comes what you want to subsidize and why and BOOM, nice chunk of change sitting there.   

You're a LONG ways away from this, but a note on cars for kid.  My 17 yo son does not have a car and his mean horrible parents will not be getting him one anytime soon.  He is not prepared to pay for the insurance premium increase (very high for teenage males) or gas, and his driving leaves something to be desired despite passing his drivers test.  He's otherwise a pretty solid, good kid.  But that doesn't mean I'm subsidizing a  driving free for all.  It may be different when the other 3 kids get there. 

If you end up with more than one- Every child is different.  Their needs are different.  Keep that flexibility the military has undoubtedly already taught you.


Lepetitange3,

20 is the current goal and I don't see anything driving me away from that.
Im at 11 years TIS and hit 12 in December.

It's great to hear that Tricare remains great even after active time.
The long term benefit of Tricare has always been a motivator to make hit my 20, along with the pension, and the simple fact I love my job!
I see myself being like your hubby and wanting to work after I hit 20. I love work and I want to jump into a career that I not only love, but has similar options like a pension, fair vacation time, and other benefits.


I'll try to throttle my brain back as far as assigning the compound account to specific things and just use it when the time comes time.
The idea of doing it over time verse throwing it all in an account right now sounds like a better plan to me as well.
I'd much rather put the larger chunk of cash I have to work.... not have it in a small return account for 16 years.
I'm really antsy to pick up another investment property :D

Lastly thank you for the car note! If my daughter is anything like her dad, then she won't be getting a vehicle either unless she pays for it on her own. ;)   I understand what you mean though, all kids can be different and no plan will be set in stone.
I'll have an account ready for when the time comes to be flexible, use it where it's needed, and where it makes the most sense.



Thank you again for the responses. This is all very helpful and helps put my mind at ease a little :D
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Nords

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Re: Transferring GI bill..... what else?
« Reply #11 on: July 15, 2017, 11:57:07 AM »
I'm currently sitting at 11 years of military service.
My current enlistment will put me at 12, but like you mentioned, to transfer my GI bill, I'll need to reenlist for another 4 years.
That will happen in December because it aligns with my 12 year mark.

I've also been very interested in real estate investing. I don't want it to be my main focus because I'd still like to work, but that's a part of the plan.

As far as retirement accounts and investing, please see my post above.
I need to recheck on the blended retirement, but I don't think I will be taking that option.

Thank you so much for posting about "The First National Bank Of Dad" and the money-smart kids post. I love reading stuff like that!

Thank you again for taking the time to write a response! I truly appreciate it!
I hate to be a Captain Buzzkill, but if you joined the military in December 2005-- before 1 January 2006 (Date of Initial Entry to Military Service or Pay Entry Base Date)-- then you're not eligible to opt in to the BRS.  You're still a leader who's expected to be able to help others talk through their decision, but you won't have to personalize it.
http://militarypay.defense.gov/BlendedRetirement/

It sounds like you'll be able to do your advanced degree/certification on Tuition Assistance, and it makes sense to transfer your GI Bill.  Just make darn sure the service and the VA have the records straight, and keep backup copies for yourself.  I read sad stories every day about this.

If you're hardwired to be a long-distance landlord instead of a stock-market investor, then maybe you'd want to prioritize investing in Roth IRAs over the TSP.  However you only have eight years left to contribute to the TSP before vesting for a pension, so shovel as much money as you can into it.  There'll be plenty of time for you to buy homes after you retire-- when you have more time to research the heck out of your markets and cherry-pick the desperate sellers.

You're welcome!  Our daughter is in her mid-20s and well on her way to her own FI.
Author of "The Military Guide to Financial Independence and Retirement".   All royalties (and writing revenue) donated to military charities.
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DapperD123

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Re: Transferring GI bill..... what else?
« Reply #12 on: July 15, 2017, 02:26:20 PM »
I hate to be a Captain Buzzkill, but if you joined the military in December 2005-- before 1 January 2006 (Date of Initial Entry to Military Service or Pay Entry Base Date)-- then you're not eligible to opt in to the BRS.  You're still a leader who's expected to be able to help others talk through their decision, but you won't have to personalize it.
http://militarypay.defense.gov/BlendedRetirement/

It sounds like you'll be able to do your advanced degree/certification on Tuition Assistance, and it makes sense to transfer your GI Bill.  Just make darn sure the service and the VA have the records straight, and keep backup copies for yourself.  I read sad stories every day about this.

If you're hardwired to be a long-distance landlord instead of a stock-market investor, then maybe you'd want to prioritize investing in Roth IRAs over the TSP.  However you only have eight years left to contribute to the TSP before vesting for a pension, so shovel as much money as you can into it.  There'll be plenty of time for you to buy homes after you retire-- when you have more time to research the heck out of your markets and cherry-pick the desperate sellers.

You're welcome!  Our daughter is in her mid-20s and well on her way to her own FI.


I joined Dec 27th, 2005 :D
It's ok though, when they rolled this new process out it was right around my 10 year mark, and decided it would probably be best for me to keep the regular retirement. That way at 20 years I am getting the 50% verse the 40%.
So no worries on the Captain Buzzkill! I'm very content!

You're right though, I am very excited to explain the new options of the blended retirement..... because with the right guidance, this will be a GREAT option for a lot of our young Airmen.

I was able to do my bachelors degree by using TA and plan to do my masters the same way.
I've also got my AF Cool money that I'm still trying to figure out what I want to use it on. I think that is something I'll wait to use as I get closer to 20. I have a post Air Force plan, but in 8.5 years, a lot could change. So I'd hate to use the AF Cool money on lets say a Safety Certification and then end up trying to get an acquisition position for a company. Now I used that money for something somewhat irrelevant.
I hear what you are saying though, loud and clear.... KEEP RECORDS AND MAKE SURE THEY ARE ACCURATE!

I'm currently maxing out my Roth IRA with my Roth TSP catching another 5% every month. (Approx $651 a month invested into both)
We are also maxing out my wife's Roth IRA and putting 7% towards her work 401K (3% work match... approx $582 a month invested not including the match)
I will sit down tonight and look at my asset allocation and run some numbers.
I have no issue bumping my Roth TSP if you guys believe not enough is going away towards retirement!
After all I do want to do this all the right way.

I'm not losing anything on the investment property.
The rent money covers mortgage, taxes, insurance, property management, and has a little extra on top (which I put towards the mortgage principle)

Regarding the long-distance landlord I am VERY excited about that purchase. I know there are a few ways people look at investment properties. Some are geared towards cash flow and others might be long term appreciation purchases where the cashflow might not be as great. This buy was a cash flow property that will be great for my long-term portfolio.
The area I bought in is not an ideal base for a lot of the Air Force members.
Most people want to just do their time there and leave. So a LARGE percent of them want to rent verse buy.
TO make it better I have two things in my favor.... 1) a lower supply of rental homes and base housing 2) greedy landlords
What I mean buy greedy landlords is there are people there who know supply is short, know our BAH, so they jack up prices.
Sounds horrible, but the base recently had a new MAJCOM take it over and LOTS of money has been pumped into not only the base, but the local economy... it's not going anywhere anytime soon. So I don't have to worry about the base getting BRAC'd.
Me.... I am a few hundred dollars below my neighborhood rental average, I allow pets, and make it very helpful for the military folks.
In the end I look at it like this.... they are my customer and my "family".... I want to keep them happy and make their life easy.
I am able to do this while still being able to properly pay for the property and a little on top. Fast forward to when this property is paid off and it'll be such a nice income property!
Based off some of the research I've done, most military areas appreciate at a much slower rate, but they do make up for it in steady cash flow!


Thank you again for all your help Nords and congrats to your daughter.... it sounds like she had a great teacher/mentor!
« Last Edit: July 15, 2017, 02:35:57 PM by DapperD123 »
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