About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • james

    so how does my investment company know it’s tax free/

  • Matt

    The problem with your strategy is that a Roth IRA is limited to $5000 per year. TSP is $46,000 per year while deployed.

  • Shardik

    Certainly, but the first $5k should be to a Roth, the rest to your TSP.

  • If you are able to contribute that much, great! Any amount over $5,000 should be put into TSP, but that first $5,000 should definitely go into a Roth IRA.

    I’m pretty sure that the 2010 tax-exempt TSP contribution limit is $49,000.


  • Paula

    Roth deposits are after-tax to begin with. Roth w/drawals are not taxed if they’ve been in the account for five years.

  • BeeBoo

    For what it is worth, coming shortly down the pike is the Roth TSP, which should be a good choice for many folks.

    On the other hand…the value of the Roth, supernumerae to the TSP would fast evaporate should congress decide, 15-20yrs from now…that they really didn’t MEAN it when they said your withdrawls from your Roth would be tax free. But don’t you worry, I’m sure it’s only the “rich” that this will happen to. At first…

    More to the point, our junior folks need to first cultivate the mindset of saving (doesn’t matter where, or how-much yet) for another day. To put off pleasure today for security tomorrow. Makes them more marketable to that nice lady in the bar looking for a husband as well.

    Education first, as for most folks, most of their total wealth in life will come from INCOME, little from investment gains.

    You can only INVEST that which you have put-aside, so develop the habit now, then learn the rules and laws and very few ways you can make money in the market as a private investor (time and patience are your ONLY strengths vs banks and funds).

    It is actually FUN to learn how to invest, and certainly directly pays you dividends for your effort spent. Teaches you a lot about life, people, etc.

    Can’t tell you the number of folks that have told me they are “invested in THE Roth”. The tragedy is, THEY are ahead of the pack! Something like 10-15% of baby-boomers have saved enough for retirement, and THEY are retiring NOW!

    Course, if you’re deploying and thinking you’re going to be off-ed in a few months…why not live for TODAY and NOT save for tomorrow. But there aren’t too many folks thinking that way, and not too much to spend it on in the dust anyway. Find some old guy in your unit who gets the WSJ or Investor’s Business Daily, and get a college degree in personal investing, for free!