The U.S. Government Thrift Savings Plan vs. the Roth IRA free essay sample

A comparison of the U.S. governments Thrift Savings Plan and The Roth IRA for military pension plans. This paper examines use of rate of return and annual cash flow analysis techniques to evaluate the relative benefits to the military member of investing in the U.S. government Thrift Savings Plan or the Roth IRA. This paper includes charts, graphs and calculations. The author of the paper states that the analysis are only an average of historical returns, future performance is not guaranteed. Table of Contents Introduction Assumptions Historical Trend Data Rate of Return Analysis Annual Cash Flow Analysis Conclusion References Enlisted members of the United States Armed Forces have, just within the last year, been given a new vehicle through which to invest their retirement money the government Thrift Savings Plan, or TSP. Available to civilian federal employees for years past, the TSP works much like a 401(k) plan works in the private sector, offering military members the potential to supplement military retirement significantly and also reduce current taxes by contributing from pre-tax dollars and watching tax-deferred earnings accumulate (Air Force News Archive, 2002, n. We will write a custom essay sample on The U.S. Government Thrift Savings Plan vs. the Roth IRA or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page p.). The current limit on annual contributions for service members is capped at seven percent of a members base pay, but that limit is expected to increase to ten percent by the year 2005 (Air Force News Service, 2002).