E-4 who needs ELI5 finance help/suggestions for Roth TSP and more

[farmerdan]

30 y.o. USAF AD. I came in slick sleeve (August will be my 4 year mark) and have been contributing 10% to a Roth TSP since I got in. My only debt is my car loan. I am NOT enrolled in the BRS because

-I honestly didn’t think I was going to stay in past my initial enlistment and originally just wanted my GI Bill and then to gtfo
-As the title above hints at, I am a complete and total clueless IDIOT when it comes to anything having to do with finances. Seriously, that is not an exaggeration. People may as well be talking in Pig Latin.

Due to finding out about the perk that is TA and also finally being approved to retrain as a FTA, I will be staying in.

My questions:

1. I’ve seen some posts in regards to where to allocate funds for Roth and they mostly seem to be advocating for L 2050. Initially I had all of mine in whatever spot it automatically gets put in and then about 2ish years ago I spoke to a TSgt who showed me how you could split everything between the different funds and basically copied what she did. This is my current situation. aM I dOInG tHiS rIgHT??? Because the past couple of things I’ve read on this sub just now are all majorly pointing in the direction that no... no I’m not.
2. I want to do more in regards to saving/investing money/making my money work and earn for me while at the same time spending as little amount of time, AKA preferably NO time, doing it. Basically something I can set up and leave and forget about. I am not opposed to paying someone to help me do that. The question is, who?

I will reiterate: the world of finance is NOT. MY. FRIEND. I am not delusional in my strengths and weaknesses and for something as important as my money, I would much prefer the help of someone who knows wtf they’re doing vs me being the financial illiterate that I am spending hours on end trolling websites/comments/posts that I barely even understand what they’re saying. Any suggestions on who/what/where I could go to for help and guidance would be great.

 

[typo]

@farmerdan BRS or legacy was your choice, but if you planned on getting out after 4 BRS actually makes more sense not less. If you do decide to stay 20 then the traditional pays off more. However, that is also the only case. That ship has sailed though so better to focus on now. I only brought it up because it was mentioned.

1. Roth is the better option for most members. I recommend talking to your free financial resources at the Airmen readiness Center instead of the TSgt. I also recommend going back to the L Fund cycle 2050 until you understand the different funds. Never blindly just go off someone else's allocation especially if you don't understand the reasoning for such allocations. What works for one won't work for all. At 30, 26% in a G fund is likely way too conservative. If you want to focus on growth (sounds like you do).

Basically, what I'm saying for that is stop just going off whatever you see Airmen Snuffy or Sgt Mcgrue do and stick with the L cycle until you actually understand for yourself what allocating different percentages towards the different funds affects. Use your free financial resources bud.

1. That starts witha budget and I'm going to say a written budget. Not something you just think in your head it needs to accurate to the tee (meaning you actually keep track of your spending for a few months to get a feel for what you actually spend money on). This allows you to put aside what is known as an emergency fund. It's exactly what it sounds like a fund for emergencies in a High yield savings account. I'd aim for at least 3 months expenses.

As for investing, bump up your contributions at absolute bare minimum to 15% OF YOUR "TOTAL" COMPENSATION That includes BAH, BAS, specialty pay, etc. calculate that and adjust because the percentage you have now is just your basic pay and you make a crap ton more than that ao it isn't accurately 10% of your overall pay tight now. If you want this to be as passive as possible then yes you need to stick to the L cycle 2050 or 2060 (when it comes out). Set a certain amount (again minimum 15%, but I'm going to be real with you hear, don't do the minimum. Do much more than the minimum. Put away as much as you can while still living a decent life. That for many can be much more tham 15%, but that's my 2c.)

There is a flowchart I may attach later that does a decent job of helping you visualize the basics. You didn't mention whether you had debt or not, but if you have any high interest consumer debts you should be prioritizing paying those off first.

 

[farmerdan]

@typo First and foremost, THANK YOU for your reply and all of the info.

I know that the BRS isn’t an option anymore and yes, it was 100% my choice not to opt in. I stated the reasons for doing so which unfortunately ended up being the wrong decision which sucks but it is what it is. I mentioned it bc I’ve seen others stating whether they were in it or not so thought it might be relevant to add.

Will be moving everything back to the L 2050 fund ASAP. When I wrote that part about copying my TSgt friends Roth I had originally put in a smart ass, sarcastic remark calling my brand new A1C self out for being a sheep and following bc “oooh look, lots of striped must know lots of things” but figured I’d already painted a big enough picture of my own stupidity so thought it was redundant. Anyways, you’re still right. I shouldn’t have blindly followed and will definitely reach out to the ARC.

Beginning of this year I bought a budget/finance journal and have been filling it out religiously since so at least I got THAT part right/down. I’ve also taken advantage of the new features of my Chase App in which it breaks down my spending into categories and percentages so that’s been very useful (and frighteningly eye opening with some of the shit I’ve spent my money on).

Move up from 10 to 15%+ contribution. Heard, agreed and done. Will crunch my numbers and ideally aim for 20%+ especially considering I’m single with no dependents.

I did mention my one debt in the first paragraph which is my car loan. I have no credit card or student loan debt thankfully.

 

[myrtleblossom]

@farmerdan Make sure to give yourself some credit while you're at it! You're saving, you recognized that you needed help, and you're taking (very good) directions!

 

[farmerdan]

@myrtleblossom Thanks for the kind words stranger!

 

[angelsue]

@farmerdan I’ll add on to this. Make sure that you also change your contribution settings to put your monthly contributions into the L2050 fund. You may have already done this but some people only move their current funds around.

 

[farmerdan]

@angelsue Good catch. Thanks for this!

 

[guyzer2606]

@farmerdan If you'd like you can do an interfund transfer and move that $4600 that's just sitting in the g fund to either the c fund or L2050.

 

[harldav]

@guyzer2606 Best time now to do it. Even if C fund drops more when this shit recovers, he would do well

 

[plains]

@guyzer2606 Move it out of g fund today please.

 

[9button]

@farmerdan Hey I joined the same time as you.

It looks like your fund allocation is all over the place. I would either put it all in the 2050 fund, or split it between the C/S/I fund - leaning heavily into the C and S funds.

Also bump up your contribution rate if you can. 15-20% during a market downturn like this will really boost your savings.

 

[yslava1]

@farmerdan Based on the level of time you seem to want to put into this, I recommend doing an interfund transfer of everything you currently have into the L 2050 fund and setting up all future contributions to go into the L 2050.

It will literally make all the adjustments for you as time goes on. It takes your age into account and will require no more of your time, once you set it up.

 

[farmerdan]

@yslava1 Done and done-er. Thank you.

 

[kitty346]

@farmerdan /@typo gave some good generic advice, so I won't repeat that.

I also encourage going to see the Personal Financial Management Program at A&FRC. Many of them are working from home at the moment and would be happy to set up a meeting to talk to you about the TSP and other investing options. The Air Force does their personal finance program a little strangely, and sometimes the financial counselor is also the person who helps spouses find jobs and teaches the relocation classes. If you can't get ahold of yours or they don't seem helpful, call Military One Source. They can definitely set you up with someone.

I also recommend Personal Finance for Dummies to everybody. It's a great overview of the basics. If you prefer online learning, the Military Family Advisory Network has an online MilCents course available.

 

[farmerdan]

@kitty346 Just looked it up and got it, thx

 

[kgb52]

@farmerdan

1. Don’t pay anyone
2. Your allocation is fine BUT you need to “rebalance”. Move everything (your $4000) in G to C.
3. Get into BRS. I don’t think you can switch anymore, but if you can, do it.
4. Put all your future contributions into L2050 or leave them as is (whichever you prefer).
5. That’s it! But Continue to learn as you go. Try to invest at least 15% of your pay. And pay off your car loan ASAP.
6. Don’t go to First Command.

 

[soulgenesis]

@kgb52 Omg I hate First Command. My husband had a 3 fund portfolio Roth IRA and a whole life insurance policy with them. Totally drank the Koolaid. Didn’t realize how shitty it was until I went through the documents and showed him.

 

[farmerdan]

@kgb52 Idk if I’m just having a whoosh moment but...first command??

 

[kgb52]

@farmerdan It’s a predatory “financial service” that caters to military. Their fees are high and their products are not good.

 

[farmerdan]

@kgb52 Ah, thx for the heads up