Everyone always has questions about TSP (Thrift Savings Plan) and IRAs (Individual Retirement Accounts), and they are important questions. We all need to be saving for retirement, even if we are counting on Social Security and a military pension.
Most of us are not able to contribute the maximum to our TSP and IRA accounts every year, so we have to decide which account is a better choice for our particular situation. There are lots of things to consider and lots of ways to evaluate the information, but one fact is clear: if you are in a tax-exempt combat zone, then you need to be contributing to a Roth IRA.
While you are in a tax-exempt combat zone, you are not paying income taxes while you are earning the money. Roth IRAs grow tax free, and withdrawals from a Roth IRA are not taxed. Therefore, money contributed to a Roth IRA while you are tax-exempt will never be taxed, and the earnings on the principal won't be taxed either. It is a win-win-win situation.
If you are deployed to a tax-exempt combat zone, be sure to contribute some of that money to a Roth IRA account. Even a small investment that will continue to pay off for years to come.