YOKOTA AIR BASE, Japan — James McDaniel has a warning for servicemembers: act now, or you could be spending your golden years under the Golden Arches.
Many baby boomers put off planning for retirement until it was too late, he says. McDaniel and the military want to make sure young servicemembers don't make the same mistake.
He said that while servicemembers can no longer make contributions to their TSP once they leave the military, they can roll over their account into an IRA or let the money already deposited into their TSP continue to grow on its own. McDaniel also cautioned against withdrawing money from the TSP early to avoid having to pay penalties on the account.
"I think it's very important to have the class, because some people don't have the motivation to start saving," said Airman 1st Class James Porath.
"The earlier you start saving the more likely you are to succeed," McDaniel said.
Tips to get started saving:
- Consider your long- and short-term goals. Where do you want to be financially a year from now? Five years? 20 years?
- Figure out how much money you will need to achieve those goals.
- Make a plan to achieve your goals and write it down.
- Figure out your current financial status by adding up what you own versus what you owe to determine your "net worth."
- Keep track of your income and expenses every month so you know where your money is going.
- Once you've figured out where your money is going, try to trim some of the fat off of your budget. (A $3.50 pack of cigarettes every day adds up to $1,278 a year!)
- Always pay more than the minimum payment on credit card bills, which will save you lots in interest payments.
- Know the consequences of bad credit. Find out your credit score and work on improving it.
Source: Yokota Airman and Family Readiness Center
For more information about financial planning, visit Military.com's Finance channel.