Savings Deposit Program (SDP)

[HMC-FMF-PJ]

Something to consider if you get the call.

The Savings Deposit Program (SDP) is available to those military members deployed in combat zones, qualified hazardous duty areas, or certain contingency operations. Eligible participants may deposit all or part of their unallotted pay into a DoD savings account up to $10,000 during a single deployment. The SDP gives you a guaranteed 10% return on your investment with zero risk of loosing anything and within 90-days of returning to CONUS all funds are deposited in the account of your choice (ie. your direct deposit pay account).

Use the DD2558 to sign up for the SDP. You should contact the Navy Admin office holding your Service Record and processing your pay to get the ball rolling. However, just about any forward deployedNavy Admin shop should help you out. (Which is how I did it during my last trip.)

Unless you are paying off a debt at or above 10% APR, or putting your money in another investment paying over 10% APY guaranteed , I see little reason why someone would pass up this free money...

For more information and Frequently Asked Questions, go to the AskDFAS website <https://corpweb1.dfas.mil/askDFAS/custMain.do > and select either/both of the following sets of search parameters:

Category: MilPay - Investments
Sub Category: MilPay - Savings Deposit Program

Category: myPay - myPay
Sub Category: myPay - SDP (Savings Deposit Program)

[Da-Chief]

All,

Please take advantage of this program, also when you get in, get into the TSP (Thrift Savings Program). I have done quite well with it as you can move money around fast now.

You can setyourself up for a good retirement if you plan now. I wish the TSP had been around when I had joined.

FYI, HMC is puttin out a "LOT" of good info.. Look for his posts..

V/R
Da-Chief.

[HMSteen]

Chief is right, I have only been in the Navy for about 6 years now and I have been doing the TSP every since I got to the Fleet and it has paid off big time. You can even take loans out against it, and pay it back but your paying yourself back in the long run. TSP rules

[HMSteen]

its good even if you dont know if you are staying in or getting out

[HMSteen]

only thing is you cant withdraw until your out of the navy

[HMC-FMF-PJ]

HMSteen wrote: only thing is you cant withdraw until your out of the navy
Do not confuse the Savings Deposit Program (SDP) with the Thrift Savings Plan (TSP).

The Savings Deposit Program (SDP) is a short-term savings account available only to those military members deployed in combat zones, qualified hazardous duty areas, or certain contingency operations. The SDP a guarantees a 10% return on your investment with zero risk of loosing any money and must be closed within 90 days of departing the qualifying duty area.


The Thrift Savings Plan (http://www.tsp.gov) (TSP) is a Federally-sponsored long-term retirement savings and investment plan for all civilians who are employed by the US Gov and all members of the uniformed services. TSP participation is entirely optional and offers the same type of savings and tax benefits that many private corporations offer their employees under "401(k)" plans.

The purpose of TSP is to provide a source of income for retirement and is not a typical savings account where money can be withdrawn at any time. Early withdrawals may only be made under very specific terms or you will be charged heavy penalties. The retirement income available from your TSP account will depend on how much you have contributed to your account during your working years and the earnings on those contributions. The earnings (rate of return) are not guaranteed and may fluctuate greatly. As such, most TSP Fund options are similar to investing in the stock market and you may make a lot of money but there is also some risk that you might loose money. (I think G Fund is the only Fund that can't loose money)

As HMSteen states above, you may get your TSP money when you leave the military through a full or partial withdrawal. You also have the option of transferring your TSP money to a traditional IRA or qualified civilian employer retirement plan. Or you can just leave the money in TSP and make your withdraw decision later.

Thrift Savings Plan (TSP) - official website
http://www.tsp.gov

If you're in this business for the money, then you're in the wrong business, but that shouldn't stop you from maximizing your benefits and taking care of yourself while you take care of the Marines.

I highly recommend you invest in both programs to the best of your ability as your budget allows, but even the smallest of savings add up over time. Invest 5% to 10% of your base pay in TSP from the moment you hit boot camp. A few bucks a week is not going to cramp your style (especially during initial training or while on deployment) but it could easily turn into hundreds of thousands of dollars.

If you deploy to a qualifying area for SDP, invest as much as you can as quickly as you can in order to maximize your return. With deployment comes a bigger paycheck (http://www.usmc.mil/marinelink/mcn2000.nsf/ac95bc775efc34c685256ab50049d458/564bb2c82b64e8ed85256fea0060d1f6?OpenDocument)and combat pay is excluded from income tax. Use some of that extra money and tax savings on a risk free investment to make even more money!

Of course you should pay off any high interest debts first before investing in SDP. It would not make sense to invest in SDP at 10% if your credit card is charging you 11% because then you would be loosing money until the debt is paid off. However, some companies (such as USAA (http://www.usaa.com)) will voluntarily reduce or suspend finance charges when you provide them with official notification of your deployment. Furthermore, with the Servicemembers Civil Relief Act (http://usmilitary.about.com/cs/sscra/a/scra2.htm), most SelRes should be able to reduce the interest charged on most their debts to just 6% during mobilization.

[HMC-FMF-PJ]

Just a reminder to do more with your paycheck than buy a hangover...

[8404]

At 52 years of age and retired, I planned for my retirement with savings early on when I was young. This has enabled me to retire comfortably at age 48.

This is great advice for all you young sailors. Save NOW and leave it there to compound over time. DO NOT withdraw any of this money.

I can't tell you how many men I have spoken too who did NOT save and are worried about their survival in retirement. At 50, it's too late, you won't be able to save enough to live on.

For the most part, civilian pensions are gone! Your retirement will be based upon what you have saved coupled with any military retirement benefits you are entitled to.

Excellent advice Chief. Keep posting.

[Da-Chief]

8404 is correct, I don't know how many people had the deer in the headlights look in TAPS for Retirement.

They all had nice Harley's cars etc.. but did "0" planning for retirement, no Education, no savings etc..

Sad, really is.. Every time I would watch someone go spend 40K on a great looking car (PAYMENTS) knowing they were going to retire soon with "0" income to come in and are scrambling for jobs etc..

This is not to say I didn't make my mistakes.. I took to long to get back into education, I didn't use the TSP like I should have early enough etc..

But we did plan something and I can retire comfortably while working at my computer on this and other projects..

Have a plan stick by it.. That great "GAME SYSTEM" you buy now for 600.00 will be 299 next year..
;-)

Later
HMC

[HMC-FMF-PJ]

When you sit down to pay your bills, the first check you write should be to yourself. Decide on an amount you can commit to for at least six months and immediately pay that "bill" by depositing the money into your savings, investments, and retirement accounts.

You must do this even if you cannot afford it. Then, pay your other bills as usual. If you find that you do not have enough money to cover all the expenses, write down the amount you are short and then find away to raise the money. If this means you have to recycle cans, switch to an off-brand cereal, skip the fancy coffee, drink less at the bar, or cancel your magazine subscriptions, do it.

Instead of saving whatever is left of the pay check at the end of the month, pay yourself first at the beginning of the month then adjust your optional expenses and eliminate wasteful spending. Take at the very least the first hour of income that you earn every day for yourself. Set up automatic payments and allotments to save so you do not even have to think about it.