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A happy retirement needs a happy retirement fund

  • Published
  • By Airman 1st Class Kali L. Gradishar
  • 92nd Air Refueling Wing Public Affairs
FAIRCHILD AIR BASE, Wash. --  The age of retirement should mark the era of vacation, travel and leisure in a person's life. This is what many people strive for. One setback for some is the financial situation they find themselves in at retirement age.

A solution to this is to start saving for retirement as soon as possible.

"Having a retirement plan established is a way for people to enjoy retirement comfortably," said Della Gooding, Airman and Family Readiness Center financial advisor.

A simple and rewarding option for Airmen is to start putting money into the Thrift Savings Plan, a retirement savings and investment plan.

"The TSP is something I truly encourage people to participate in," said Ms. Gooding. "A lot of people know they need to save money for retirement, yet a lot of people don't do it."

It begins on the myPay website, where you determine what percentage of each type of pay received you want to put towards the account. For example, you can direct up to 100 percent of base, special, incentive and/or bonus pay into the TSP.

Automatically, that money is invested in the Government Securities Investment Fund. Other funds available include the Fixed Income Index Investment Fund, Common Stock Index Investment Fund, Small Capitalization Stock Investment Fund and the International Stock Index Investment Fund.

On the TSP website, www.tsp.gov, you have the option of putting different amounts of your investment into different funds to meet your saving and investing needs. A much simpler way of diversifying funds is to invest in the L Fund, a fund that automatically splits the investment into the G, F, C, S and I funds based on the estimated year of retirement.

"Everyone should consider investing in the TSP. It doesn't require a lot of work, and the money is deducted from your pay automatically," said Ms. Gooding.

Investing in your future now can mean valuable rewards in the future.

At 19 years old, investing $100 a month at eight percent compounding interest would yield $379,321 at the age of 60. Waiting a few years until 26 years old, investing $100 a month at eight percent compounding interest would yield $210,659 at the age of 60.

Waiting only seven years later, the final amount for retirement would be a significant amount less.

Invest now. Whether it's five percent, 25 percent or 100 percent invested, retirement will be all the sweeter when you have the money to take that vacation you've always dreamed about.

(This story is the second article in a five-part series on finance issues.)