A bit lost and confused

[Esbjorn]

I've recently started reading MMM and it has finally given me the inspiration/motivation to make changes.  However, I'm not really sure where to begin. In apologize if this is the wrong forum, not really sure where else to post.

first, a bit about me: 30, single and no kids.  I have an extremely stable career (U.S. Government) as a civilian worker, and honestly, I like the job.  I've been employed here for 7 years.  Base salary is 60k but normally around 70-80k due to over time and travel.

Financially: I've recently become debt free.  I rent a small duplex style house.  I've only recently started half assed saving so I don't have as much as I should.  currently have 20k in the bank (including emergency fund) that isn't doing anything.  My original plan was to save for a down payment for a house but now I'm not sure which direction to go.

Since im a federal worker, I have been putting 10% of my pay into the Thrift Savings Plan.  Everything is in the L2050 fund and currently around 60k in there.  5% goes into traditional for the matching and 5% for the Roth tsp.

What I'm basically asking is, what do I do?  I realize it's an odd question but I'm a bit lost.  Everyone tells me I should buy a house but these are the same people that struggle with bills.  But at the same time home ownership is intriguing.  It also scares me seeing 20k in the checking account not doing anything.  right now I feel like I'm spinning my wheels.  Both financially and long term retirement planning.  Do I keep putting money into the tsp or open a vanguard account (vtsax)?

Sorry for the long winded post.  Just hoping to get some opinions or guidance.

Edit: I should also add my monthly bills add up to around 1200 not including food/gas

[MDM]

Since im a federal worker, I have been putting 10% of my pay into the Thrift Savings Plan.  Everything is in the L2050 fund and currently around 60k in there.  5% goes into traditional for the matching and 5% for the Roth tsp.

What I'm basically asking is, what do I do?  I realize it's an odd question but I'm a bit lost.  Everyone tells me I should buy a house but these are the same people that struggle with bills.  But at the same time home ownership is intriguing.  It also scares me seeing 20k in the checking account not doing anything.  right now I feel like I'm spinning my wheels.  Both financially and long term retirement planning.  Do I keep putting money into the tsp or open a vanguard account (vtsax)?

What about putting $18K/yr into the traditional TSP, and $5.5K into a traditional IRA?  You would still be in the 25% marginal bracket.

You would (I think - do you agree?) still have money left over and putting that into VTSAX (or VTTSX, etc.) would be a reasonable thing to do, at least for starters.

[TaxChick]

Financially: I've recently become debt free.  I rent a small duplex style house.  I've only recently started half assed saving so I don't have as much as I should.  currently have 20k in the bank (including emergency fund) that isn't doing anything.  My original plan was to save for a down payment for a house but now I'm not sure which direction to go.

Do you have the desire to be a homeowner? I have had several friends rush to buy a house, not realizing the costs of maintaining or the time that it takes to do maintenance. If you do want to be a homeowner and take on the extra responsibility, it can be a blessing.  I would recommend making sure that you increase your cushion to prepare for those unexpected house emergencies such as a broken hot water heater and plan for longer term repairs such as replacing a roof.  If you plan on staying in the area, buying a small house could be a good move financially.

[horsepoor]

Another fed here.  I'd suggest maxing out your tsp (18k) this year, for the tax savings. 

Do you think you want to work for the gov until you're 58, or might you want to move on at some point?  You're in a position to load up that tsp and then have a very nice stash at traditional retirement age even if you leave the government early and let it grow untouched for a while.  It will also give you flexibility later if you want to start a family or do something else that might make you want to lower retirement savings later on.

Can't answer on the house thing since it depends on your location and your motivation for owning instead of renting.  I'm in a low col area, and prefer to own because I like having pets and a garden, so I prefer to own.  In a higher real estate market, it make more sense to rent.  It also gives you more mobility.

[Janie]

You might want to check out NYT's rent or buy calculator http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?abt=0002&abg=0

[MustachianMD]

First off, congrats on taking that first step. It is definitely the hardest one.

I use to work for the VA, so I can tell you the TSP is a great retirement tool. Even cheaper than vangaurd, so I would take full advantage like others have said and put the full 18k in pretax and then try to make out your IRA. If you do not have a rollover IRA from another job, you could potential "backdoor" convert these into a roth IRA.

As for the homebuying. This is really a personal choice. Looking back, I wish I did not buy my first home a condo that I am still renting because I ended up moving and the real estate market crashed. I am happy with my current home because it is in a relatively low cost of living area and I am much more settled down with a wife and kid. I did not buy a home the other two places I lived because there was not a long term plan to stay in those places. If you are thinking of buying I would use the buy vs. rent calculator from the NYT that was listed above.

Good luck, you are in a good place since you are thinking about this relatively early in the game. Compounding/the time value of money is really going to help you reach your goals!

[MDM]

put the full 18k in pretax and then try to make out your IRA. If you do not have a rollover IRA from another job, you could potential "backdoor" convert these into a roth IRA.

Why Roth, let alone why backdoor Roth?  OP is in the 25% (plus whatever for state & local) marginal bracket.

$75K gross income minus $18K for the TSP gives $57K for the AGI, well under the tIRA phaseout that begins at $61K.  If gross is $80K then AGI would be $62K so only ~$4950 could go into a tIRA and $550 would have to go to a Roth.

But if an HSA is doable...the AGI could be $3,350 lower so we're back to all $5,500 into the tIRA....

[KungfuRabbit]

there is nothing wrong with renting.  if you aren't 100% sure you WANT a house, don't.

also, its not a great idea in my opinion to buy before you are sure what your relationship future holds (ie, marriage).  you could want a different location due to jobs, or a different size, or your future significant other may already have a house.  and it really hurts to sell a house after only a few years, tons of lost money.

Just invest like crazy in tax advantaged funds, and then start the brokerage funds after that. 

[rafiki]

Maybe instead of renting a duplex you buy one for yourself, rent out one half and live in the other. That way you can subsidize some of the maintenance and expenses with a tenant and if home ownership ultimately isn't for you, then you can sell the duplex or possibly turn it over to a property manager.

And I would maximize the tax savings of your TSP.