MILITARY FAMILY INITIATIVE
Family Initiative MOAA Military
RAISES $166,825
in December
The MOAA Military Family Initiative (MMFI) had a banner year in
2015, surpassing its December fundraising goal of $110,000 by a considerable margin. We offer our sincere thanks to the 911 donors — MOAA members and chapters, corporations, and members of the general public — who responded to the MMFI’s end-of-year appeal. As promised in our message leading up to the Giving Tuesday kickoff, here’s how the states stacked up:
Highest State Participation (number of donations divided by
total MOAA members in that state) No. 1: North Carolina No. 2: California No. 3: Arizona
Highest Total Giving (total donated funds) No. 1: Virginia No. 2: Florida
No. 3: California Highest Gift Average
(total donated funds divided by number of donations) No. 1: Colorado
No. 2: North Carolina No. 3: Georgia
LEARN MORE AT
MOAA.ORG/FOUNDATION 74 MILITARY OFFICER MARCH 2016
and because there are no income re- strictions, unlike with a Roth IRA. People who contribute to a tradi- tional plan want their tax advantage now, not later. A traditional 401(k)/ TSP gives you a full reduction off your current taxable income, up to the $18,000/$24,000 maximum contribu- tion, regardless of your income level — unlike a traditional IRA, which can limit your tax benefit. Traditional IRA contributions can be deducted off your income taxes up to the $5,500/$6,500 maximum if neither you nor your spouse is cov- ered by an employer retirement plan. However, if you or your spouse is covered by an employer plan, deduc- tion rules get complicated and de- pend on your income levels. See IRS Publication 590-A. Basically, you can always contrib- ute up to the $5,500/$6,500 maxi- mums in a traditional IRA, but your ability to deduct your contributions can be limited or stopped. In this case, nondeductible contributions will not be taxed at withdrawal in retirement. Any gains from the nondeductible contributions are taxable.
Investment options Investment options depend on who administers the account you choose. IRAs can offer limited to unlimited options. 401(k) investment options
PHOTOS: SHUTTERSTOCK
typically are limited to two dozen or less. The TSP is limited to six op- tions (C, F, G, I, L, and S). What’s best depends on your needs and your investment strategy. A good case can be made that three to five options are fine if they are the right options. Lots of options could be a trap if you aren’t disciplined in your strategy.
Costs
The less expensive your plan, the more investment return you keep, thereby enhancing your wealth po- tential. The TSP is so inexpensive, it’s practically free. If you don’t have a TSP account, things can get com- petitive between 401(k)s and IRAs. You control your IRA expenses
according to where you open your ac- count and the investments you choose. Your 401(k) expenses depend
on your company’s program and how much your employer makes you pay to cover the administrative fees. These expenses can be all over the map. Check out BrightScope at
www.brightscope.com to compare your plan.
Ease of management
In the age of online account manage- ment, a few key strokes can do most things you need to do. 401(k)/TSPs might face some restrictions due to employer plan rules. IRAs could have some restrictions imposed by the place you do business.
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