Career Focus: The holidays are a great time for giving, investing

By Master Sgt. Joseph Mulcahy, 377th Air Base Wing / Published December 14, 2006

KIRTLAND AIR FORCE BASE, N.M. -- A few weeks ago, I participated in a gift wrapping fundraiser at the base exchange. Our booster club worked diligently and cheerfully while assisting holiday shoppers. Thanks to our efforts and our customers' generous donations, we earned some money to help fund our squadron's holiday party. More importantly, we assisted those who had purchased items supporting the Angel Tree program.

The Angel Tree program assists needy Air Force families during the holidays. First Sergeants and supervisors select families who will benefit most. Each family is asked about their greatest need, and their responses are placed on tags and hung on the tree. Charitable shoppers - angels - take the tags, purchase gifts and donate them to the cause. This year tags went fast proving once again that the Air Force takes care of its own.

Awesome programs like the Angel Tree help us to be generous toward others during the holiday season, but it's also a good time of the year for us to reflect on ways we can help ourselves by investing for the future. The Air Force helps us do this by allowing us to participate in the Thrift Savings Plan.

TSP is an awesome financial retirement plan. Investors can choose from six fund options. These funds vary in risk from the low risk government fund (G Fund) through the high risk stock fund (S Fund). Additionally, there are lifecycle funds (L Funds) that are designed to assist folks in reaching time targeted goals. Contributions can be made to multiple funds for those choosing to balance risk. Regardless of the fund you choose, it's important to research the investment that suits your needs.

Why should you invest using the TSP?

First, your contributions reduce your income taxes. Contributions to the TSP are deducted from your pay prior to taxes thereby reducing the amount of your taxable income. This is an excellent way of reducing your tax burden. Military folks can contribute an unlimited percentage of base pay into a TSP account. Unfortunately, the Internal Revenue Service limits annual contributions to $15,000.

Second, TSP funds provide competitive rates of return. For instance, the G Fund currently pays an annual return rate of 5 percent. This is much better than most commercial bank and credit union savings accounts.

Third, TSP enrollment and adjustments are simple. Enrollment and adjustments are done through the myPay Web site. With a few clicks of the mouse, you can choose a fund and the percentage you would like to contribute each month.
Finally, TSP stays with you. Whether you decide to serve four or 30 years, you can contribute to TSP. If you separate from the Air Force you will have to put your earnings into another qualified retirement plan unless you continue to work for the federal government. Few, if any, corporations offer their employees a fully funded pension at twenty years along with a retirement savings plan like the TSP.

With a 2.2 percent pay raise coming, now is a great time to start or increase your investments. Regardless of how much you contribute, it's usually a winning proposition. The TSP makes the process easy.

If you would like more information on the TSP, go to www.tsp.gov. If you would like information on other career benefits and entitlements, give me a ring at 846-6636 or send an e-mail to joseph. mulcahy@kirtland.af.mil

See you in the wings!

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