Cadets and TSP

J

juliusc16

5-Year Member
Joined
Jan 22, 2012
Messages
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For those either AD or Retired: Does anyone know when cadets can start working on their TSP (Thrift Savings Plan) or does that start once we graduate? :confused:
 
You can start contributing to your TSP when you graduate. Firstie year you will have briefings about the choices.

Stealth_81
 
A Roth IRA is probably a better choice as a cadet than the TSP with the tax rates and age.
 
hornetguy said:
A Roth IRA is probably a better choice as a cadet than the TSP with the tax rates and age.
Click to expand...

+1000

As a cadet; you're Butt Poor. You're not even IN a Tax Bracket. LOL!!! You don't need the tax breaks of the TSP. If you really want to invest the little money you are getting at the academy; or if you have money set aside in your personal account from prior to the academy; then do what Hornet recommends and get a Roth IRA. It will benefit you much more years down the road. Plus; if you ever need it; you can take back out the money you put into the Roth IRA penalty free. Not that you should ever need the money while you're in the air force for the next 9 years.
 
hornetguy said:
A Roth IRA is probably a better choice as a cadet than the TSP with the tax rates and age.
Click to expand...

One thing about a Roth IRA: You need to have taxable compensation to make a contribution. If your only income is dividends and interest it won't work. Similarly, if as an ROTC cadet you receive room and board from your college, it is considered taxable income but does not qualify for a Roth IRA. There may be exceptions if you have a spouse with income but then you wouldn't be at the academy, would you?
 
EDelahanty said:
One thing about a Roth IRA: You need to have taxable compensation to make a contribution. If your only income is dividends and interest it won't work. Similarly, if as an ROTC cadet you receive room and board from your college, it is considered taxable income but does not qualify for a Roth IRA. There may be exceptions if you have a spouse with income but then you wouldn't be at the academy, would you?
Click to expand...

True; but nothing says you have to put in the full $5,000 into a ROTH. Whatever an individual would think of putting into a TSP from their cadet pay; would be taxable income. They can put the same amount into a ROTH. We are comparing the TSP to ROTH program for cadets.

And; if a person had some money in their account at home from work PRIOR to coming into the academy, they could contribute that too to a ROTH. After the first year at the academy; then you basically only have your cadet pay. But you could definitely put $5000 into a ROTH per year by your 3rd year. Especially if you had money already set aside in an account for spending money.

I know of a few individuals who had "Their OWN Money" prior to coming into the academy. They basically lived on their graduation money; birthday; christmas; etc... money (Which ISN'T Earned income); and they invested basically ALL of their cadet money.
 
Christcorp said:
+1000

As a cadet; you're Butt Poor. You're not even IN a Tax Bracket. LOL!!! You don't need the tax breaks of the TSP. If you really want to invest the little money you are getting at the academy; or if you have money set aside in your personal account from prior to the academy; then do what Hornet recommends and get a Roth IRA. It will benefit you much more years down the road. Plus; if you ever need it; you can take back out the money you put into the Roth IRA penalty free. Not that you should ever need the money while you're in the air force for the next 9 years.
Click to expand...

Thank you all! Very much appreciated
 
hornetguy said:
A Roth IRA is probably a better choice as a cadet than the TSP with the tax rates and age.
Click to expand...

This is ROTH TSP.

My perception is that TSP is a good deal based on a low management fee.

However, a friend claimed that TSP "hides" it's management fee so it is not as low as we think it is. Never bothered to follow up on it.
 
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