How does the TSP compare to a 401(k)?

[mmMatt]

Good afternoon

My name is Matt, I'm 20 years old and currently enlisted in the USN. I plan on going career, but time will tell how that goes.

I have very little knowledge on stocks and anything that really has to do with retirement, but I'd like to get started early.

I'm currently contributing 10% of my paycheck to TSP. I plan on increasing it by 2-3% every year until I start maxing out.

My knowledge on 401(k) is very limited, as all I've done is read a book on retirement planning. My question is how does the TSP program compare to the 401(k) system?

In your opinions, is it better or worse? This may be an incredibly stupid question, but like I said, I've very little knowledge on investments; let alone retirement.


Thanks in advance, I plan on frequenting these forums from now on in an attempt to become more versed on the subject.

--STSSN OLLILA, M.P. USN

Matt

 

[Birchtree]

mmmatt,

The TSP for some people is just like a 401K. Providing you get the matching which in your case is out for now. But if you get deployed - that's when the bennies begin to multiply. Come join us at you pleasure. Now you realize if you don't do 20 years you never become vested - that to me is a crime. The branches should offer members the option of having a defined contribution plan and that alone would help with recruitment and retention.

 

[mmMatt]

mmmatt,

The TSP for some people is just like a 401K. Providing you get the matching which in your case is out for now. But if you get deployed - that's when the bennies begin to multiply. Come join us at you pleasure. Now you realize if you don't do 20 years you never become vested - that to me is a crime. The branches should offer members the option of having a defined contribution plan and that alone would help with recruitment and retention.

Are you saying there is a benefit to my TSP account when I'm deployed?.. or am I taking that comment the wrong way?

Thanks for the reply

--Matt

 

[Birchtree]

All your money when deployed is non-taxable which means you could conceivably sock away up to $44,000 into TSP. You won't be held to $15,000. My daughter just increased her TSP allocation - she's in Kirkuk.