Make the most of the new military retirement plan

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Make the most of the new military retirement plan
Military personnel are advised to take advantage of the federal Thrift Savings Plan by contributing enough to get a matching contribution from the Department of Defense, according to this article on Kiplinger. They should also consider staying longer in the service to boost their retirement savings. Although military personnel who joined the military just last year and later will get a smaller pension than they would under the old system, they can expect additional benefits from the tax-advantaged Thrift Savings Plan.

Save like you’re retiring early, even if you’re not
Clients who are saving aggressively as if they wanted to retire early will end up with better retirement prospects even if they don't intend to retire sooner than expected, according to this article on MarketWatch. “Saving money to retire early is a worthwhile goal, because none of us know how long we’ll be on this Earth,” says a retirement saver who joined the "Financial Independence, Retire Early" movement. And “by living within your means, you’re setting yourself up to be able to handle life’s curveballs."

Saving is not the key to building wealth — here's what is, says author of 'I Will Teach You to Be Rich'
A personal finance advisor says that socking away money in a savings account is not enough to build wealth, according to this article on CNBC. Clients can grow their savings by investing the money in "low cost and long term" investments, such as an index fund, the expert says. "Consistently buy an S&P 500 low-cost index fund. I think it's the thing that makes the most sense practically all of the time."

How to invest to meet short-term goals
While tax-advantaged retirement accounts such as 401(k) and IRA are great savings vehicles to build long-term wealth, clients can use taxable accounts to meet their short-term financial goals, writes an expert on U.S. News & World Report. Before investing in a taxable account, clients should assess their tolerance for risks and determine when they will need the money. They should set up an investment fund for general short-term goals, decide on the approach to use for the fund, and consider the impact of the fund on their taxes. "You can ... reduce the amount you pay in taxes by only taking money out once it qualifies for the long-term capital gains rate.”

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Retirement income Social Security Investment returns Investment strategies Tax planning