How to Invest in Your Future While on Deployment

February 19, 2013
By Justin Melquist

In order to live a comfortable retirement, it is essential to set a retirement savings goal and to start saving early. Deployment is a perfect time to start saving due to the excellent benefits we receive as military members. Deploying to a tax-free zone or combat zone makes our already excellent investing options even more appealing. The Savings Deposit Program and the new Thrift Savings Plan ROTH option are both excellent ways to save while deployed.

The Roth TSP is the premier way to invest while you are deployed to a tax-free zone. Normally you would pay tax on a ROTH at the time you invest it and pay none when you take it out. However, when you are deployed to a tax-free zone, you will never pay taxes on your investment. This is the only place in the world where you will find this. The impact of letting your money grow without paying taxes means a lot more money in your pocket. You can set up allotments through the mypay website and contribute up to $17,500 per year.

The Savings Deposit Program is another option that we have for investing. Military members deployed in combat zones may deposit all or part of their unallotted pay into a DOD savings account up to $10,000 during a deployment where it will compound quarterly at an annual rate of 10%. With the SDP you will be taxed on earnings. You can get guidance on how to set this up through your Finance Office or Personnel Department before you get under way.

Saving early and often is the key to the financial freedom for yourself and your family, however, before you start investing money for retirement, it is crucial that you have your debt under control and have enough cash put away for an emergency. Once you are ready to invest, I recommend taking advantage of the Thrift Savings Plan. The TSP program has extremely low fees and is competitive with any other index fund. If you save early and often, you can feel confident that you are taking care of your family’s needs in the future.

Justin Melquist is the founder DeckPlateDollars.com, a personal finance website designed specifically for Sailors and their families. He is an active duty Mustang with over ten years of service.

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