saving and investing · kimberly broddie afc®, ft gordon, ga and local surrounding areas @...
TRANSCRIPT
Saving and Investing
Securing a Strong Financial Future
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Agenda
• Key terms• Saving vs investing• Savings accounts• Investment basics• Investment assets and
accounts• Resources
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Saving and Investing: Key Terms
• Keeping cash in a liquid accountSaving
• Ability to convert account funds to cash on short noticeLiquidity
• Purchasing assets that increase in value over the yearsInvesting
• Spendable money (profit) earned at the end of the investment periodReturns
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Saving and Investing: Key Terms cont.
• Low amount of risk (less chance of loss)Safety
• The potential for the account to earn income (interest and dividends)
YieldLow Risk
Yield High
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Personal Savings
• Deposit accounts• Certificate of Deposit (CD)• Money Market Savings Accounts
(MMSAs)• Savings Deposit Program (SDP)
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Demand Deposit Accounts
Held at bank or credit
unionLow interest
ratesLimited
number of transactions
Should not be used for long term
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Certificate of Deposit (CD)
Why get a CD?• Issued by bank or credit union• Fixed maturity date and interest rate• Insured by FDIC
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Money Market Savings Accounts
Why open a Money Market Savings Account?• Security• Returns are higher than a regular savings
account• Accessibility
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DOD Saving Deposit Program
Basics:
• Deployed for at least 30 days in eligible combat zone
• Up to $10,000 deposit
• 10% annual interest
• Interest continues up to 90 days after return
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DOD Savings Deposit Program cont.
DepositsCash
Check
Allotment
Flexible amounts
Stops automatically
WithdrawalsMyPay requests
120 day automatic direct deposit
Emergency: command approved
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Investing
Asset types:• Stocks• Bonds• Mutual fundsInvestment Accounts:• IRAs• 401(k)• Thrift Savings Plan
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Asset Types
Stocks Part ownership in company
Can sell for profit
More risk
Bonds Loan money to company
Keep until Maturation
Less Risk
Mutual Funds
Pooled funds (stocks/bonds)
Have fund mangers
Less Risk
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Retirement Accounts Overview
• Held through an employer (401(k) or TSP) or individual (IRA)
• Wages invested either prior to taxes or after being taxed
• Withdrawals can be taxed or tax-free• Normal withdrawal age is 59 ½• You choose the asset types (stocks, bonds,
mutual fund mixes)
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401(k)
• Sponsored by employers• Employer may match
contributions• Complex withdrawal rules• Employee controls money
investment
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Individual Retirement Accounts (IRAs)
Roth IRA Traditional IRATax Advantages
Contributions Not tax deductible Tax deductible, subject to certainlimitations
Earnings Tax free on qualified withdrawals of earnings
Taxes deferred until earnings are withdrawn.
Withdrawals Contributions to your Roth IRA may be withdrawn at any time without penalty or taxation.Withdrawals of earnings before age 59½ are subject to federal income taxes and penalties unless they are qualified distributions.
Withdrawals before age 59½ generally are subject to tax and a 10% penalty, with certain exceptions. You must begin taking withdrawals, based on your life expectancy, once you reach age 70½.
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Thrift Savings Plan
• Voluntary enrollment• Automatic payroll deductions• Contributions:
– Pre-tax or after-tax– Grow tax-deferred or tax-free
• Low administrative costs• Beneficiary of your choice
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Roth TSP
• Contributions are after-tax• Withdrawal allowed IF :
1. Five (5) years have passed since Jan 1 of first contribution year
2. You are 59 ½ or older, permanently disabled, or deceased.
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Investment Returns: They really add up!
Start age: 25$30,000
$472,000End age: 65
Start age: 35$90,000
$367,000End age: 65
vs.
Investor 1 Investor 2
Investor 2 has:• 3X the
money invested
• $105,000 less in returns
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Saving and Investing Planning
Step 1
• Track expenses for 2 weeks
Step 2
• Budget with 70-20-10 rule
Step 3
• Separate savings account(s)
Income
70% Living
Expenses
20% Debt
10% Savings
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Information Resources
Personal Financial Counselors
Military OneSource• www.militaryonesource.mil
Thrift Savings Plan• www.tsp.gov
Savings Deposit Plan• www.dfas.mil (search for SDP)
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Agenda
• Key terms• Saving vs investing• Savings accounts• Investment basics• Investment assets and
accounts• Resources
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Conclusion
Questions?
Resources
Thank you!
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Personal Financial Counselors (1 of 2)
Free and confidential Personal Financial Counseling (face to face, electronic, telephonic and video) is available to all holders with a valid military I.D. card from the following:
Zack Cockfield CFP®: at JFHQ, Clay NG Center, Marietta, GA and local surrounding areas @ 678-662-7036 (direct line)or 404-323-6428 (cell) or [email protected]
Kevin Startt ChFC®, Dobbins Air Reserve Base, Marietta, GA and local surrounding areas @ 404-804-9759 (cell) or 404-226-9478 (direct office) or [email protected]
Juanita Warren AFC®, Ft Gillem, Ellenwood, GA and local surrounding areas @ 470-218-5894 (cell) or [email protected]
Shannon Reynolds CFP®, 148th BSB Armory-Macon, GA and local surrounding areas @ 478-283-2182 (cell) or [email protected]
Juliana DeSouza CFP®, Robins AFB, Warner Robins, GA and local surrounding areas @ 912-650-3214 (cell) or [email protected]
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Personal Financial Counselors (2 of 2)
Free and confidential Personal Financial Counseling (face to face, electronic, telephonic and video) is available to all holders with a valid military I.D. card from the following:
Stephen Giella AFC®, Ft Gordon, GA and local surrounding areas @ 706-831-6794 (cell) or [email protected]
Kimberly Broddie AFC®, Ft Gordon, GA and local surrounding areas @ 706-496-9846 (cell) or [email protected]
Debora Jefferson AFC® Ft Benning, GA and local surrounding areas @ 706-224-8750 (cell) or [email protected]
Downer Davis AFC® at 118 FA Armory-Savannah, GA and local surrounding areas @ 912-245-1236 (cell) or [email protected]
Garry Gentry AFC® Moody AF Base, Valdosta, GA and local surrounding areas @ 229-449-0019 (cell) or [email protected]