European Stars and Stripes (Newspaper) - March 18, 2007, Darmstadt, Hesse                                Page 28 o stars and stripes sunday March 18 2007 your Money Thrift savings earn a bundle for retirement Penny saved is a Penny earned b Franklin by Chris Fowler stars and stripes Yokosuka naval base Japan join the military and become a millionaire not a pitch youll Likely hear from military recruit ers but maybe it could be no youll never become wealthy off your military retirement pension but if you invest wisely in other areas you might Surprise yourself one investment option available is the Thrift savings plan in which a percentage of each paycheck is dropped into a retirement program available to service members and government civilians even the smallest contributions can add up to big Bucks says a financial expert who works closely with service members a military retirement is a great Start said Yokosuka Fleet and family service Center personal finance manager Collin Schriver but tsp could be the key to your Finan Cial future in contrast to your military retirement based on years of service and rank at retirement tsp is a Federal govern men sponsored defined contribution plan the income you receive from a tsp account will depend on How much you contribute to the fund the Power of a tsp account is found in the Finan Cial voodoo of compound in Terest the compounding is the result of earning interest on your investment plus the interest the interest is generating the growth becomes exponential it is important for people to understand two things in order to get the most out of tsp delayed gratification and Dollar Cost averaging Schriver said i think delayed gratification is the hardest for Young service members to accept Many people dont look past next paycheck let alone look at the next 40 years Dollar Cost averaging Al lows investors to ride out the ups and Downs of the Market with Dollar Cost averaging its not the constant mar Ket fluctuation that youre concerned with but rather the funds average Price Over the Lon term Schriver said when the markets Are up you buy fewer shares when the markets Are Down you buy More a lot can happen with a monthly investment of with a 10 percent rate of re turn for a period of 40 years according to a savings calculator at  com after 10 years the Prin Cipal and interest would total after 40 years the accumulated principal and interest could be More than million site warns of programs that Monitor Access info stars and stripes about two dozen Thrift savings plan customers computers were infected last december with a soft Ware program that records a key strokes according to tips web site the total loss was about and tsp is work ing to return the Money the savings plan also has discontinued transactions for electronic payments according to the site additionally military investigators and savings plan officials warn users to be aware that this key logging software exists and that Home computers May be vulnerable the software captures and records the key strokes of a users Access information which can be sold to others who might use it to steal Money according to the site to avoid becoming a Vic Tim users should ensure Home computers have up Odate antivirus soft Ware also close out inter net browser windows after completing transactions that Means clicking the x at the top Corner of your internet browser win Dow logging out is not enough photo illustrations by Christopher b and stripes by looking past old ideas about financial planning you can harness the Power of compound interest by enrolling in the Thrift savings plan regular deposits taken automatically out of your paycheck will grow surprisingly quickly into what can become a substantial amount of Money toward your retirement aside from signing up and designating the fund allocations tsp makes letting your Money grow As easy As a mouse Click by placing As Little As one percent of your pay into a tsp account you Are positioning yourself in front Row seats to watch those pennies grow into big Bucks understand your options investment options available for the Thrift savings plan fall into three Gener Al categories securities funds Stock Index funds and an aggregate of the first two life Cycle funds the first two Are securities or Bon based investment funds government securities g the g fund consists of us Treasury securities that Are specially issued to tsp the g fund is a Safe investment but has a relatively Low return fixed income Index f a mix of us Treasury and Federal Agency securities corporate Bonds Mort Gage backed and foreign government securities the f fund closely matches the Lehman Brothers us aggregate Index which tracks the Overall us Bond Market but comes with the risk of negative returns Stock Index investment funds historically offer a higher rate of return and allow you to diversify your investments across a Range of stocks heres a look at the three offered by tsp common Stock Index c this one follows the Standard poors 500 Stock Index again this fund car Ries with it the risk that the value of its constituent stocks might decline Small capitalization Stock s a Small and medium company Stock fund it tracks the Wilshire 4500 Stock Index which consists of smaller Compa Nies not included in the 500 Index historically the s fund is More volatile than the c fund International Stock Index i the i fund tracks european austra Lian and far East Stock indexes the fund has shown itself to be the most vol Atile tsp fund and therefore riskier than c or s fund investments tips life Cycle l the l funds Are a combination of both Securi ties fixed and Stock Index funds the aim is to minimize risks and maximize returns across the Board each l fund contains an investment distribution based on when a participant expects to begin drawing a retirement income they Are broken into four withdrawal time frames 201020202030 and 2040 Chris Fowler participants allocate How their contribution is distributed through professionally managed funds see Box the plan is designed to minimize Short term risk mitigate risk in the longer term and maximize returns across the Board said Schriver tsp became available to service members in 2001 those who joined Early Are already realizing the benefits of their decision i didst have any sort of retirement plan other than my military pension said uss Kitty Hawk chief Petty officer Jason Chudy when it was offered i jumped on it Chudy increased his contribution allocation throughout the last six years now it is Worth More than and growing i am preparing for my future now and tsp is going to make it a lot More comfortable but what if a person is not going to make the military a career even if you Are planning on getting out of the military after your first enlistment enrolling in tsp is a Good idea said Schriver pointing out that you can contrib Ute to tsp Only if you Are on Active duty Sta Tus or a government service employee according to Schriver upon military retirement or separation you have three options Cash out Roll your tsp into a traditional individual retirement account or employee 401k plan or leave the Money in tsp and let is accrue interest tax free if you Cash out youre going to pay a 10 percent penalty and you will be taxed on the Money As regular income said Schriver so if you re tire its better to Roll your tsp Over into an Ira or 401 that Way you can continue to contribute into the account according to the tsp web site you May begin withdrawing your tsp with no penalty at age and must begin withdrawing your tsp no later than age you Are not taxed on your contributions or their earn Ings until you withdraw your Money people who participated in tsp during tax year 2006 May be eligible for the retirement savings contributions credit according to the web site email Chris Fowler at