Author Topic: Looking for advice  (Read 1230 times)

LoGiK

  • 5 O'Clock Shadow
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Looking for advice
« on: October 16, 2014, 12:22:34 PM »
Hello All!

I love this blog and have been working these past few years towards setting myself up to a solid retirement. I do have a few questions though, but first here is some background. - Sorry for the long read -

I am 24 years old and have will have been in the Air Force for 5 years in May. My car is paid off*, I have no debt, I have $4300 in a savings account-earning nothing, about $1800 in BestBuy stock (old employee plan I've never touched, but need to sell at $31.08 to break even), $860 in a Traditional TSP(TTSP), and $900 in a Roth TSP(RTSP), both are gov't 401k's. I plan to keep contributing 1% of my pay to the TTSP, while putting $450 into my RTSP per month. The TSP account will allow a combination of up to $17,500 per year - my goal is to eventually hit that 17,500 only using RTSP. Meanwhile I've been stocking $460 per month into my emergency fund (since I paid everything off) - which I would like to open a Roth IRA with.

My plan was to sell the bestbuy stock and throw it into a brokerage account. Max my Roth IRA while contributing to the RTSP, eventually hitting the max combined contribution limit of $23k per year - a few years down the road. With $900+ going into retirement accounts per month I have maybe 200-300 I can invest/save further. There is where I become confused.

1. Would it be better to put that 200-300 into a brokerage account and use it for stocks/bonds/index funds - buying dividend stocks for example and start making some money, or what?

2. I would like to buy my first house in the next 4-5 years. I am single with no children (divorced *high five*), Should I contribute less to my retirement and more to a brokerage account to fund this, or should the 20% down be in a separate account? To me it would make sense to lump all brokerage funds into one account to have more buying power, but remember how much is dedicated to what (20% down payment, etc.)

3. I love the Air Force and am planning on staying in until I can retire from it, maybe longer if I'm still in a great job. Assuming I don't get the boot (big IF with today's world) I'll be eligible to retire in 2030 at 39. By retirement I'll be an e7, very achievable or an o4 if I commission, and will have a pension of  $26230 per year that is taxable or $44140 if I commission for life. This can play a  huge role in my retirement future, but knowing this I still am stashing money away the way I am because of employment in the future with drawdowns. Retiring would provide enough to live off of, enough saved to put my children through college, and leave behind for possibly my grandchildren's education. That would be awesome in my book.

Any advice on my current savings situation, how to better it, any inputs, even if you'd do something completely different would be welcome.

*I'm moving next year to England and will be selling my car here, using cash to buy my car there and avoiding a loan this time around.

Note: I make around $2140 after tax per month after my $900 RTSP/R-IRA deductions, and will make $4323 after the $900 deduction once I move. Keep in mind $1USD is only worth £.62GBP so this "$2100 raise" isnít much of a raise, it's to offset the cost of living.

Thanks for your time!

CU Tiger

  • Bristles
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  • Posts: 463
  • Location: Mid-Atlantic USA
Re: Looking for advice
« Reply #1 on: October 16, 2014, 09:15:38 PM »
I would carefully select some Vanguard funds and toss as much money in them as you are able. Low fees and dollar cost averaging are your friends.

If you want to buy a house in five years, figure out how much you need to put down and divide that by 60 and save that much each month. Do you want to buy a place even if the USAF will keep moving you around?