One of the best ways to save for retirement is through your work. If your company offers a 401K or similar program, it's hard to beat the tax advantages that saving that way can offer. I've been contributing regularly to the governments TSP(Thrift Savings Plan) program for years now, but never in any great way. They don't offer matching contributions for military members, so I've been more interested in investing in a Roth IRA and limiting my TSP contributions.
This year however, I've already made my full annual IRA contribution. That means more money each paycheck for me! Alternatively, I could take the extra money that I would have invested in my IRA and switch it to TSP. Of course, there is the holy grail of retirement saving: Maxing out my TSP contributions. For 2009 that limit would be $16,500 (the same as a 401K). That is quite a chunk of change. It comes out to $1,375 per month. Can I possibly afford to save this much? Currently I'm saving about $500, and combined with the money I'm not contributing to an IRA that would be about $900. That means I'd have to devote an additional $475 each month to long term saving.
It's tempting, and I'm pretty sure I could pull it off, but right now my entire life situation is in a state of flux since I'm moving to another country. There are a few unknowns that could come back to bite me, so I'll be a little careful here. I'm definitely increasing my contributions, but not quite to the max. Once I'm settled in my new local, I'll reevaluate my situation.
Comments