YOUR MONEY Investing In Your Future, One PaycheckAt A Time (NAPSA)—Therising costs of food and fuel amid an ever-tightening credit crunch are putting a strain on many people’s paychecks. But as Americans tighten their belts, they shouldn’t lose sight of long-term savings goals such as retirement. For our men and womenin uniform, that could mean taking a closer look at the Thrift Savings Plan (TSP), which offers savings and tax benefits that are similar to private corporations’ 401(k) plans. “Enrolling in the TSP can help servicemembers achieve their ultimate financial goals and secure a comfortable retirement—evenin the face of current financial pressures,” said Mary Schapiro, chairman of the FINRA Investor Education Foundation, which launched its Military Financial Education Program in 2006. “Yet only 36 percent of active-duty servicemembers take advantage of this important service benefit.” Enrolling in the TSP is easy, and servicemembers can start or change their participation at any time, contributing as little as 1 percent of their basic pay each pay period. Ultimately, retirement incomeis affected by how much a servicemember contributes to his or her TSP account during working years and the earnings on those contributions. Even small contributions add up. As little as $10 a week—or $40 a month—can add up to more than $20,000 during a 20-yearperiod: $40 monthly contributions Earnings (assuming 7 percent a year) Total in 20 years $9,600 $11,359 $ 20,959 If servicemembers switch jobs before reaching retirement age, they can protect their TSP nest eges by leaving the money in the TSP, rolling the money into an employer’s retirement plan, or rolling the money into a traditional or Roth Individual Retirement Account (IRA). When deciding what to do, servicemembers should compare available investment choices as well as fees; the TSP’s fees are typically much lower than those of other plans. Be aware that cashing out can havesignificant tax consequences, including a 10 percent penalty for withdrawals madebefore age 59%. For more information about the benefits of the TSP, visit www.SaveAndInvest.org. In addition to unbiased information and tools, servicemembers can also sign up for investor alerts and news about the FINRA Investor Education Foundation’s Military Financial Education Program. The FINRA Investor Education Foundation is a leader in providing financial and investor information to help Americans better understand the basic principles of saving and investing. To join the thousands of servicemembers who have taken advantage of the TSP, visit www.tsp.gov or call the Thriftline at (877) 968-3778.
