Military investing is a maze now with all the different account types, fund options, and strategies flying around. As someone who’s been building wealth through military service for years, I learned everything there is to know about the investment options available to us. Today, I will share it all with you.
Thrift Savings Plan Fundamentals
The TSP remains the cornerstone of military retirement investing. With expense ratios of just 0.048 percent, it is one of the lowest-cost investment vehicles available anywhere. That’s what makes the TSP endearing to us military investors — the government match under the Blended Retirement System provides an immediate 100 percent return on your first 5 percent contribution.
TSP offers five core funds plus lifecycle funds that automatically adjust asset allocation as you approach retirement. The C Fund tracks the S&P 500, the S Fund covers small and mid-cap stocks, the I Fund provides international exposure, the F Fund holds bonds, and the G Fund offers government securities with principal protection.
Beyond TSP: Brokerage Accounts
After maximizing TSP contributions, consider opening a taxable brokerage account for additional investments. While lacking tax advantages, these accounts offer unlimited contribution room and complete flexibility in investment selection. Low-cost index funds from providers like Vanguard, Fidelity, or Schwab can replicate TSP-style diversification.
Roth IRA Advantages
Real talk: this is the important bit. Military families often qualify for Roth IRA contributions even when civilian families in similar income brackets might not. Because many military allowances are not taxable, your adjusted gross income may be lower than your total compensation, keeping you under Roth income limits.
Roth IRAs offer tax-free growth and tax-free withdrawals in retirement. For service members expecting higher income later in their careers or after military service, paying taxes now at lower rates makes strategic sense. It’s what I do personally.
Real Estate Investment
Many military families build wealth through real estate. The VA loan benefit allows zero down payment purchases, and the ability to reuse this benefit after selling or paying off a previous VA loan creates ongoing opportunities. Some investors use VA loans to purchase multi-family properties, living in one unit while renting others to offset or eliminate housing costs.
Investment During Deployment
Deployments present unique wealth-building opportunities. With combat zone tax exclusion and reduced living expenses, deployed service members can often save and invest substantially more than usual. Automating TSP and IRA contributions before deployment ensures you capture these savings without active management. I’ve seen folks come home with six figures banked from a single deployment.
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