Retired Military Pay Calculator

Posted onNovember 19, 2011 - 7:51 pm by Admin | 0 Comments

It is comforting for many Americans get that big check at the end of the year, but it is better to have it in the bank to use as an investing strategy. If a person's average tax return is $3,000 a year, they can choose to have less withheld and get that $3,000 throughout the year. Instead of getting $3000, they would get monthly payments of $250, for example. That $250 can be invested into the TSP and dollar-cost-averaged instead of being tossed into the investment fund in a lump sum every year.

How to Maximize Deductions for Retirement Savings

First go to the IRS website and see how many deductions can be legally claimed. The withholding calculator on the IRS website is easy to use and all that is needed s a copy of a Leave and Earnings Statement (LES) and last years taxes. Generally a married couple with children can count each dependent twice. So a married couple with two children can file Married and 6. Most will file married 5 and only claim the spouse once to avoid overwithholding. For further explanation of this, consult a tax expert or go to www.irs.gov.

Increasing Thrift Savings Plan (TSP) Investment Percentage

To increase the percentage of pay going into the TSP, go to the MyPay Website, log in and click on the TSP link found towards the bottom of the link list on the main page. The person is able to choose what percentage of their base pay or special pay can they want to be put into the TSP. Changes made to the TSP will generally appear within two months when a new full LES is posted.

Responsibility with Extra Money

Having that extra money in the bank makes it possible to increase the amount of money that is put away for retirement. It also makes it easier to spend that money. Make sure that those extra dollars are placed into the TSP right away to avoid the temptation of spending them. Since the goal is to increase investing for retirement, it is important to have enough discipline to actually invest the money, especially since this strategy will remove or reduce a bigger tax return at the end of the year.


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