Maximizing Retirement Savings
Maximizing Retirement Savings
My husband and I married in our late 20’s (we are now in our 40’s). We were fortunate that we were both employed full time and had minimal college loan debt. One of the first things I did after our wedding was to contribute the maximum amount possible to both his TSP and my 401(k) plan. I also opened a Roth IRA for each of us. Each year, as we received our pay increases, I put that money into the TSP/401(k) until we reached the federal maximum contribution.
When we were young, we committed to ensuring that he would not need to continue working full time after his military retirement to afford our basic needs. Making the sacrifice of a few luxuries when we were young has allowed us a great deal of freedom now that my husband has retired from active duty to not worry about how we will be able to afford the lifestyle we want in our later years.
MilSpouse Money
Mission Response:
Congratulations on your husband’s retirement from active duty! Thank you for sharing your experience and highlighting the importance of saving for the future from an early age. Retirement can seem like it is a long way off and with other more immediate financial obligations and goals to handle daily, it is easy to put it in the “I’ll figure that out later when I have time and make more money,” category. Well, the time is now, whether retirement is five years away or 25 years down the road. Retirement savings grow through the power of compound interest, this video explains why time is so important in saving for retirement.
Check our Retirement Milestone to get started. Transition out of the military can be challenging and there are often many competing demands that may include moving, looking for a new home, securing employment, and adjusting to life as a civilian. The more time you can spend in preparing for this transition, the better.
Kristina’s tip highlights the importance of two types of retirement accounts that offer tax-advantaged savings: Individual Retirement Accounts (IRA) and employer-sponsored retirement plans, which includes the Thrift Savings Plan (TSP), 401(k), plus other types of accounts. Experts recommend saving and investing 10% – 15% of pretax pay. Remember to check with your employer and the TSP to see if you are contributing enough to take advantage of potential matching contributions, which will help you save even more.
