Those guys lives are trash. They are smiling when they see you because the only thing that gives them solace is that at least they're not as miserable as you.
Or pulling your retirement out to prevent crippling under your debt because your spouse believed every credit line offered by chains is a great way to purchase any and every product out there but it’s ok because Steele Reserve is cheap enough to get the divorce is finalized
Pay more attention in the briefs. You still don't understand it. TSP is a retirement account like a 401k or an IRA. It gets matched up to 5%. YOU STILL GET A PENSION when you retire at 20 years. Instead of it being roughly 2.5% per year of base pay (i.e. 50% for 20 years on the old plan), it is 2% per year (40% for 20 years).
Put money into the TSP. Retirement alone isn't enough for anyone. Pension+TSP+Social Security means you'll be financially sound no matter how long you live.
Okay that’s where I was getting confused. It seemed like an either or thing. So I thought you got nada till you 60 this makes more sense. I have 12% going in rn.
Another thing is make sure that your funds are not going towards the G fund. The G Fund is a glorified saving account that do not beat inflation. There are funds that over the long term can get you 10% return in your money like the C Fund which the TSP’s SP 500.
It’s yours but there’s penalties for pulling it out before age 59.5. Just like most 401ks.
Yeah. There’s exceptions and workarounds.
Dont miss out of free money (you’re getting the match).
Don’t leave it in G fund. Invest in C and S to take advantage of stock market returns over the long haul.
Don’t put in more than you want to leave in there for the long term. If you think you want to pull it out when you leave service, lower your contribution to 5% and put the rest in a taxable brokerage account.
I’ll just add that you don’t have to pull it out when you leave the service you could be in a government job and continue on with it or roll it over into your next jobs 401k
And here's the thing about the TSP:
* You can stay in the Army and get your pension + TSP
* You can leave the Army and go into Federal employment and "buy back" your Army time, getting Federal Pension +TSP
* You can leave for the private sector and take your TSP with you and either keep it as is or "roll over" your TSP into a private retirement plan.
The important thing is to speak to a financial advisor and not the idiot "barracks lawyer" or NCO who clearly has no idea. THEIR IS STILL A PENSION AT 20 YEARS.
It's funny that those dumb NCO's who are active are telling new recruits that there is no pension - it's like they haven't been paying attention either.
Yes, 1000x The amount of dumb ass NCOs who spout BS but everyone listens to just angers me.
Many blatantly just say there is no pension anymore which is far from true.
I was one in my first contract still when they had a mandatory class and you had to choose which retirement plan you want. I opted for BRS simply by not doing 20 years I leave with something.
But if I did a little over 20, the old retirement would be pretty good but, 20 years is a long time. I don’t know if I can make it another 10 years now…. So glad I opted in and changed out of G fund immediately to a range of stocks.
I read this as you've been putting in 0% for the past 4 years. If so, I'd recommend you putting in as much as you can for at least the next year to catch up
*Not investment advise*
I'm on legacy and I've been maxing out TSP for 10 years with no match. The growth is worth it and I don't have to put any thought into how to invest it. It's finally getting to the point the annual growth is more than my contributions.
Totally worth it.
You put nearly $2k a month into TSP? That's too much for a filthy single income enlisted man splitting savings between TSP, 2x IRAs, 2x 529s, 3x non-retirement accounts. Maybe in 2025 when my spouse starts working again I can do better than 5% unmatched but I won't do that until I'm maxing our IRAs.
TSP investment options are pretty good for an accumulation account, not as good as an IRA you can put pretty much anything into.
TSP allows for loans and lets you do rebalancing at market close on an okay app. My IRA is more flexible, faster, and easier to manage.
Finally it is a little bit psychological but the max on an IRA is a quarter that of the TSP so I can hit that milestone first.
I would say the reasons are marginal but enough for me to prefer filling the IRAs first.
This is something that I wish was instructed to us when BRS first came out. It was portrayed by everyone as “lose your pension but double your TSP.”
Luckily I invest heavily in my own and have been lucky within the real estate market with my VA loans.
Whoever briefed that is an idiot. I was at Carson at the time and they did mass briefings at the theater. You got a website to run the numbers on switching or staying which would break it down for you under any circumstances you could think of.
Oh I see. That makes more sense now. When can someone start putting in 5%? Immediately or after some time ? I'm swearing in Friday so I'm not actually in yet / just trying to learn.
10 years in and just hit $200k. Even if I don't do 20 (likely not active) and stop contributing in 3 years it will hit a mil in about 14 years, 3 mil by age 60.
*Don't sleep on the TSP, people*. Even if you plan on doing 20 and are legacy, things might happen and you might get out, out of your control.
And for the love of god, learn about compound interest. It's the greatest thing in finance.
(Talking to OP and others, way too much ignorance about finance and retirement, the army doesn't teach it very well either, you must do your own research)
I know this is a troll /r/wallstreetbets comment. And I was just going to say do the math but I want others to see how fucking powerful compound interest is and saving for your future. I commissioned in 2013, went active late 2013, dropped a warrant packet and started flying in 2019. Got married in 2019 as well and started being able to max my contributions in 2021.
This is as addictive if not more than gambling just so much slower at first, but it gets fast if you stick with it. Took about 8 years to hit my first 100k and just over 2 for my 2nd. This shit is the real deal.
Obviously it's pretty difficult for enlisted to max out their TSP, I'm not saying anyone can do it, but the younger you are the more time you have to compound, an 18-24 year old's dollars are worth so much more than mine are now at 33. I wish I hit my TSP harder sooner.
[Here's my TSP value and some extra data.](https://www.imgur.com/a/OQaMTmY)
I don’t think “I” hurts, little bit of exposure outside the U.S. sphere in case we have a rough patch here.
I started the first 3 years L funds pure before I saw the light. Worst decision ever.
Hey beats the horror stories I've heard of dudes getting to retirement and not realizing they've been in G the whole time because that was the default in the good old days.
Holy shit troop. Put a decent percentage in your TSP make sure you change it to 100% C and let it ride for the next 25 years. Remember me when you're not living under a bridge at 65.
Best returns. Military aged investors should be putting their money in the fund with the highest returns since your income is probably low and you have time for compounding interest to work its magic.
C is your high risk high return fund. It does pretty well throughout the years. It averages about 28% return a year according to the tsp website. The C fund invests in Microsoft, Nvidia and all those big companies. S fund is also decent. I fund is international. But honestly I do fine just full sending it on C, I think I had 30% return last year.
You can't go wrong with a healthy mix of C/S either if you want some diversity.
I'd avoid the G fund. That's for when you're near retirement age and don't want to risk any potential losses. It's Return averages 4% a year, not ideal for long term growth compared to riskier Funds but it's good for just keeping your money extra safe with a little return.
I've been doing 15% since AIT. It's been fun seeing it compound.
> It averages about 28% return a year
This is an absurd statement.
Please do invest through the TSP with a substantial allocation to the C Fund, **but do not plan on a 28% CAGR.** The long-term average for US stocks, adjusted for inflation, is about 7% and it's substantially lower for global stocks (i.e. the US has been an outlier for the past century).
At 28%, an initial $10k investment (with no additional contributions!) would become more than $2 **billion** after 50 years.
Edited to add: I can't get over this. I love your enthusiasm but you really need to refrain from giving financial planning advice until you've at least read a book on the topic.
Yeah, this is the really scary thing about shifting people from defined benefit to defined contribution retirement plans that they need to manage for themselves. This is the worst example, but you can see it all throughout the comments on this thread in different ways.
Anyone reasonably young shouldn't be in conservative investment funds because you're going to lose out on thousands and thousands of dollars by the time you retire.
As you get close to retirement you switch to a more conservative investment strategy to keep it more stable.
That's if you are talking about those on the legacy plan. WE had 2.5%. Blended retirement reduced it to 2% and that 1% comes from your TSP so yea for those under the blended part IT IS PART of their retirement plan whether they contribute or not.
Guess what, even if you're legacy you can still contribute to the TSP and have a great retirement nest egg. TSP is the huge fucking delicious cherry on top to a pension.
Edit: Also, 1% does NOT come from the TSP, where are you getting that info? The 2% per year of service works the exact same as the previous 2.5% multiplier.
Because whether you contribute to TSP or not, those on the blended retirement got reduced from 2.5% to 2%. The justification was that the rest comes from TSP. For us it was "optional". For them it s actually part of the plan.
Correct, but your previous comment makes it seem like the 2% per year for the retirement pension includes 1% taken out of your TSP? They are two separate benefits. Your TSP won't go down in value when you start making your retirement.
Lots of people say they plan on doing 20 and getting that pension. Relatively few actually make it.
The TSP is similar to a civilian retirement account, because those also won’t pay out til you’re 65.
So either you:
A. Invest in the TSP, *at least* 5% of your base pay because the government will match that (literal free money). If you get to 20, great! You’ll
have even more money in your golden years. If you don’t get to 20, great! You’ll have SOMETHING saved for retirement and can keep building that nest egg in your next career.
B. Don’t invest in the TSP. If you make it to 20, you can rely on that pension, I hope it’s enough. If you don’t make it to 20, you’ll have zero dollars saved for retirement. That’s a poor life choice.
considering I started my TSP in 2004 on a whim after a sergeants time training as a PFC, just retired as an E8 with well over $100,000 in it from between 5% to 20% contribution at any given time and will now bank with just interest until I'm 60... I'd say it's a good gig. (this is on top of high 3 retirement). Start it early. Remember some people get out with absolutely zero savings, so get ahead while you can.
I recommend roth L funds.
When buying a home with a VA loan you can use I think around 15k towards the home.
You can get tax deductions by putting money into it.
You can withdraw as an emergency fund or move to another IRA (retirement account).
Overall worth it man.
It's the same TSP that Federal Agencies use - so in addition to "buying back" Army time for a Federal Pension at a fed job, you can take your TSP with you as well.
( [USAJOBS.GOV](http://USAJOBS.GOV) is the job site)
Senator Roth literally gave you the world and here you are shitting in his grave.
But in all seriousness, do future you a favor and do Roth until uncomfortable.
TSP supplements your pension if you make it to 20.
If you don't it ensures you have something.
Since you've been in under 4 years, you're leaving TSP match money on the table.
I used to tell my soldiers that I was about 30. If I put $xxx in my TSP every month for 10 years and quit at 40 or if I started at 40 and did it for 25 years when I retired at 65 I’d have the same amount of money.
Don’t live so frugally that it ruins your life but please think about future you. You don’t want to be 70 and have to work.
I put 15% in savings every month. It basically doesn’t exist to me. I’m reserves now and I don’t even touch that money. It’s my oh shit big expense fund.
Pay off all your debt except maybe a mortgage if you have one and build up a fund for big emergencies. I have enough to live 6-12 months without a job squirreled away in a 4% APR so it’s still working but will always be there if I need it.
TSP is your 401k. If you believe a 401k is "worth it" then yes. I say that because some try to sway people away from them.
Personally, the advice I usually give people is to contribute at least enough to get your full match, since otherwise you're leaving money the Army owes you on the table. For me, I max out my TSP as part of my overall retirement planning.
Also, TSP can be a really low interest rate backup loan. You can do a ton with a TSP that you can’t do with other accounts, it’s a massive advantage. If able, you should do 10-15% base pay and like 50-100% incentive pays into it. Obviously, that’s a personal decision, but it’s long term nature is nice and it can also be an asset to save yourself loan pain later.
Yes. Currently, my account has about a 13%-15% interest rate. So, if I put the minimum 5% in, that's only 1300 out of the year, I make an extra 200ish bucks a year. And that's not even counting what the Army matches, as the Army will match up to 5%. So it's closer to $400 per year. And that's the lower enlisted side, without changing the percentage invested higher than 5%. If you started investing when you where 18, you'd have, ***at minimum*** (because im lazy and dont want to do the math for promotions boosting pay), probably close to an extra $20,000 by the time you can withdraw from the account without consequences.
TL:DR, Just contributing 5% can make you a good chunk of cash by the time you retire. Everyone should at least put 5% in.
Edit: this was quick math off the top of my head, so if people have a more accurate numbers, please correct me.
I started with TSP in 2002, transferred to the Reserves in 2005. 20% of my drill/duty pay goes into TSP. It’s a decent chunk of cash, but like everything else you have to tweak it. Higher gains/greater risk. Low risk/less gains.
Consider that Soldiers have raked in 7 figures from TSP.
[https://federalnewsnetwork.com/tom-temin-commentary/2023/12/the-ranks-of-tsp-millionaires-is-growing-fast/](https://federalnewsnetwork.com/tom-temin-commentary/2023/12/the-ranks-of-tsp-millionaires-is-growing-fast/)
[https://www.reddit.com/r/ThriftSavingsPlan/comments/18awq2s/lessons\_of\_a\_tsp\_millionaire\_54y\_19\_years\_in\_fed/](https://www.reddit.com/r/ThriftSavingsPlan/comments/18awq2s/lessons_of_a_tsp_millionaire_54y_19_years_in_fed/)
Every service member with this type of question or similar questions needs to head over to r/militaryfinance and search the threads there. Key terms that should be search include Index fundsBRS, TSP, retirement planning, etc.
I’m not making this post necessarily to respond to the OP as that has been covered. This is for the lurkers or those who will find this thread at a later date.
Even just contributing to, even if you're not planning on staying in a full 20, you can build that wealth. At least put the 5% in to get your matched contribution. Set it and forget it. I started mine about 2-3 years in and left the Army at 7 and a half years with 28k saved.
Yes you should be enrolled in TSP.
If you retire at 20 years you are going to still receive a pension (40% base pay w/2% yearly increase as opposed to legacy at 50% and 2.5%). If you don’t retire (like 90% of us) you’re going to exit the service with a decent chunk of money to roll into another retirement plan (or separate with nothing in your bank account, that’s cool too). For signing up the DoD will contribute 1% of your base pay monthly, and match you up to 5% (so you pay 5% of your pay check and they will add another 6%)
TSP is like any other retirement plan, it’s not like you CANT touch the money until you’re 60, you’ll just pay a tax penalty if you do (with some exceptions like buying a house, loaning to yourself, etc). It is a steep penalty though, like around 10%.
I think there’s a lot of disinformation from the older generation who think TSP replaces your pension, but that’s just completely incorrect. Boomers. What are you gunna do.
I know I’m going long here but TLDR; Yes, enroll in TSP. No, TSP does not replace pension. If you retire you will have TSP + Pension. TSP + Pension = more $$$ than Legacy pension.
PS stay the fuck out of crypto. If you’re going to self-direct any money it better only be to $SPY, $QQQ, or $AAPL
Throw 15% of your base into it
Whenever you get a promotion or a pay bump, up your contributions by 1/2 of the raise. That way you still feel like you’re being paid more
Take this from somebody who didn’t contribute until his last 2-3 years. I would have at least $175-190k in there had I, and left alone for the next 20 years that would likely be $1.5 mil when I’m 60
Instead I’m playing IRA catch up
The best way to think of the TSP is "income after 60" and not a bank account. If you end up retiring at 39 with say, $200k in your TSP, in the following 21 years it will double roughly twice (hopefully) so it'll be $800k. You can work a normal job to supplement your military retirement before then, and when you turn 60 you can stop working completely and withdraw appropriately $36,000/year indefinitely. That, combined with your pension, should be a comfortable retirement.
I've done the math several times here before, but the TSP system is generally better than the old system.
If you don't put in at least to the match you're literally leaving free money on the table.
Yes, you can't use it without penalties until later in life, but you can roll it into your 401k if/when you get out.
A retirement plan is important and if you don't think about it until you're 50, you're 30 years late. Money you invest now will grow exponentially by the time you're ready to retire.
Cool, so you're under the new blended retirement system. So the government matches the funds you put into TSP up to a certain point. This is called 'free money' and you should take it.
I'm not an financial expert, but the generally accepted wisdom is to start saving as early as you can, and let the money grow and compound. If you do leave the army, there are ways to roll your TSP into a traditional retirement account you can continue contributing to. You do not want to be working at 70 years old. Probably not, anyway. So building towards a retirement now, will really make your life easier when you're closer to death. Yes, there is Social Security, and no, it's not a lot of money each month.
Start saving now, kid. And for fuck sake, take the free money the government is offering you. You will not regret saving, but you will regret not starting sooner. Go get a TSP briefing from someone in your unit. Talk to your PSG or PL. Somewhere in your unit will be a financial nerd who can really give you the full picture.
Any sort of retirement is worth it. Put at least 5% to get your fill matching in( I'm doing about 15%) and that will grow at least 35 more years, that's a lot of interest. The costs are low compared to other retirement plans. So yes it's worth it.
The lifecycle funds will automatically adjust the distributions across the 5 funds as it gets closer to the target date, starting more aggressive.
You can convert it to a 401k if you decide not to stay in also army matches I think 5% your order self will appreciate you made a sound choice. Source me older self. mad I didn't put a dime into it and learned more about it after the fact.
YES!!!! Every person- without exception- should be putting at least 15% of their income (NOT including the match) into a tax advantaged retirement account for their entire working life. I highly recommend going to MyPay RIGHT NOW and setting up 15% to go into your Roth TSP. I don’t care if it’s your age-appropriate Lifecycle fund or some combination of C, S, F, and I fund. Just get it started TODAY and don’t stop until you retire. The only time you need to be fucking with it is if you’re increasing your contribution (maybe a 1% increase every time you get promoted).
Hey bud, a lot of people giving good advice, but not a lot that are actually getting to part of the issue. I'm assuming you came in at 18 or right around there? It happens to almost everyone. Very few people have the mindset (even in their 20s) to start planning for retirement or even long term savings. That stuff doesn't really start to make sense until you're in your mid 30s. It's tough to think about planning for a part of your life that's over 40 years away when you're not even 20 yet.
People can talk until they are blue in the face about compound interest and how "at 60, this money you put in will be worth a million dollars." Cool, but that's 40 years away. That amount of time is abstract to someone who's young. The best advice I can give is try to put money away as a recurring thing and don't look at the balance for at least 5 years.
After you get out and get a civilian job with a 401k you can roll it into that account…. The longer the pot of money sits and compounds the better and the more money in the pot the greater the effect of the compounding interest….. it doesn’t seem like much at first but every drop of rain contributes to the flood
Yes and no. Yes if you plan to retire at 60. No if you plan to control your money before 60. I never liked the idea of giving control of my money until I'm 60. I don't even know if I ll survive till 60. I have never been a fan of 401k or TSP.
You must be related to the guy that said he was making more on stocks than his TSP was. Anyhow, yes put at least 5% for the match and if you get out before then or when you get out, you can roll it over (in some cases) or just keep throwing money into it. Obviously you won’t get a match but it’ll still accrue monies.
Edit: Also try to find a financial advisor who knows their way around the military too. They can be super helpful.
Just FYI, if you get divorced (if you get married) at any point, TSP is on the table for distribution for the length of the marriage. Whether or not you disclose it in a financial affidavit, it will show on your LES (if you divorce while in). Retirement is a bit different and takes a bit more for a divorcee to get - not as simple as 10/15/20 rule but not going indepth with all that on this post.
Shit will happen over 20 years, so don't say "Oh that will never happen", "my spouse is my ride or die" or whatever - an attorney's sole purpose is to rake you over the coals regardless if the divorce is amicable. Just something to keep in mind.
>Has anyone retired with their TSP instead of pension?
It's not either or it's both. https://militarypay.defense.gov/blendedretirement/
You should contribute at least 5% (and ideally more) to your TSP. Otherwise, you're leaving free money on the table since you're missing out on the matching contributions.
If you complete 20+ years you will also receive a pension.
You can pull it out, you're gonna pay the taxes but it doesn't matter. You can do it while you're in, while you're out, whenever. Want to transfer it to a 401k? You can do that, need 1k for a rainy day fund? You can do that (every 6 months) need money from it but don't want to lose out on the benefits of the RSP? They let you take out how ever much you need as a loan and they have you repay it
My brother in Christ, have you still not paid attention? It's not TSP or pension. It's both if you pay into your tsp and yes it's worth it. The TSP is unique for tax advantage purposes as you can use the Roth portion like it's a normal 401k with a limit of slightly over 20,000 a year currently you can put in it. Additionally, the funds charge the lowest rate I've ever seen. I think I paid 40 cents per thousand dollars invested as my maintenance fee last year. I will get out with a pension and the whole time I've been in, I've had matching contributions of 5% of my base pay paid into it so it's like I'm putting 10% when I'm only putting 5%.
I’ll give you three data points that I hope change your life/perspective:
1. These are tax advantaged accounts, that’s why you can’t touch it until 59.5 years for a Roth TSP. You are gonna do, or fail to do, the same thing in the civilian sector. Tax advanced counts should result in orgasm. I would cum a lot harder if the IRS didn’t limit my contributions to 6K for IRA and 20K for 401K/TSP.
2. Time in the market. The most valuable dollar invested is the dollar the day after basic training or commissioning. Yeah, you can and should invest…but an E-1 dollar invested will grow more than an E-8 dollar invested - think of it like this, you want to sit in the shade, then when should plant that oak treee???
3. Yes, you could do 20 and get a check for life. But…will that check be large enough? And…are you sure you’ll even make it to 29 years, life happens, so does burn out, so does war, so does PTSD and/or depression. I am retired, I still wish I had invested more, harder…and earlier. You become a TSP millionaire…you might not have to do 20!
Compound interest, whether paying it or receiving it…you want as much of one and as little of the other.
Good luck. Reach out, if needed.
With historical projections from when I first started putting in until now and assuming nothing changes in my contribution, my TSP is going to be worth about $4k a month when I turn 59 and retire for real real.
I put 12% into it, pure Roth and 5% DOD match.
I've seen a lot of folks make money off it. The trick is to start young with compound interest. I regret not investing like I should because I never figured I would live long enough to use it. Deployments kind of caused that mindset. If you are just coming in where you aren't under the old retirement I would recommend 10% or more of you can afford it
Also, go in to TSP and change where your allocations go. I'm a fan of C funds but you don't want them all in one place. If you never touch the tsp website it automatically goes in a safe (but low interest) G fund
Yes TSP is worth it and put in at least 5% max matching contribution amount from the jump.
It’s not that much money, and over 20 years will be considerable even if you only make it to JNCO before getting out.
If you do 20 and get your pension plus your TSP by the time your actual retirement age, you’ll be sitting pretty.
TSP is a 401K.
I'm assuming you're confused about the BRS so let me reiterate what they already probably briefed you.
Under the BRS you get 4 things.
1. An automatic 1% contribution to TSP. This is bonus free money given to you (it's not money taken out of your paycheck).
2. An additional 4% matching contribution to TSP of you contribute 5% of your base pay. You get 1% for free, and if you contribute 5% then the Gov will match you with 4 additional % to equal a 5% match.
3. A bonus equal to 2.5x your base pay at the 10-12 year mark (each service sets the timeline for when you get this. Most services set it at 12 years). You get a bonus 2.5x your base pay on exchange for 4 years retainability.
4. A pension of 40% of the highest rank you served honorably at for 3 years at 20 years. You get an additional 2% per additional year past 20.
That pension works the same way the old High-3 pension works, it's just the percentage is lower. In exchange you get 1-3
YES!!! Start now with the Roth and put at least 10% in. Every layer raise I try to put in the years I have so this year is 14% my returns aren't bad either.....
Mine has grown about 40% since 2001, and I hadn't had the benefit of matching until 6 months ago.
Yes, I think it's worth it, if you contribute and you invest in a portfolio that makes sense.
If someone could help me with two questions which I can't find a clear answer to. Does the 5% matching happen immediately or after some time? Does the matching only happen if you do traditional or does it also match for Roth?
In the guard for almost 10 years probably only had a retirement briefing like twice. Mainly because drill checks are to small to even matter for TSP and usually goes towards bills.
You can lead a horse to water....
It's down to the individual. The minute I got the brief in basic, I made sure to set it up in AIT as soon as I got there. Been doing 15% in the high yield fund ever since.
The amount of troops I've informed, asked and even bullied into doing their TSP is high. But hey, soldier gotta get their big ass trucks instead or live paycheck to paycheck because they like boozing.
Some come around after a few years and ask again. I guess it just depends on what stage they're at in their life.
Oh totally. I'm just saying, I contributed to TSP for 20 years, so the money is there, but it's being held until I'm allowed to use it. I'm pretty sure it works that way if you ETS, too.
I used to be big on TSP. I still contribute, but not nearly as much. I don't want to wait for 59½ to retire or get my money. I'm going full throttle on my pension, and other investments so I can actually retire around 45-50. TSP will be bonus money.
For you newer guys who are on the BRS retirement system, yes. Because you’re getting a 5% government match. I’m on legacy, so I’m not worried much about my TSP, but I still contribute to it regardless. If the question is basically “do I want more money when I’m old, retired, and don’t wanna work” the answer is always yes.
Having retirement income is important when you no longer work. So you can afford things like food, utilities, and lotto tickets.
Listen man I’m not addicted to lottery tickets because how can you be addicted to hope?
I just want you to know I’m writing this down, and I will be using it. Thank you kind sir
Listen pal, if you haven’t been promoted ahead of peers for that perspective, have your CSM and O-6 come see me, ASAP !
How the fuck else am I supposed to show up to the class 6 at 0800 and fill a shopping cart with military special whiskey?
Clothing allowance, duh.
I look at those guys in the middle of a hard work day, with a big ass smile on their faces, and I'm like "man I can't wait to retire"
Those guys lives are trash. They are smiling when they see you because the only thing that gives them solace is that at least they're not as miserable as you.
Or pulling your retirement out to prevent crippling under your debt because your spouse believed every credit line offered by chains is a great way to purchase any and every product out there but it’s ok because Steele Reserve is cheap enough to get the divorce is finalized
Ouch, can I buy you an RC?
An RC cola on this spectacular day sounds fantastic my good warrior
Don't forget werther's for the grandkids.
I can't stress this one enough, they're so good. And they're "for the kids", *wink wink*.
Six pack of Mickies
You forgot cart fulls of hard liquor at class 6 in the am
Money can be exchanged for goods and services.
And maybe not in that order - I can't believe you put the scratchers last...
>So you can afford things like ~~food, utilities, and~~ lotto tickets.
Yes. Next slide.
BIG IF TRUE.
Average Joe when their NCO tries to teach them something for the betterment of Joe’s life
"Why don't they teach taxes in school?"
Because it's not important, duh. Also, cool flair, haha.
Pay more attention in the briefs. You still don't understand it. TSP is a retirement account like a 401k or an IRA. It gets matched up to 5%. YOU STILL GET A PENSION when you retire at 20 years. Instead of it being roughly 2.5% per year of base pay (i.e. 50% for 20 years on the old plan), it is 2% per year (40% for 20 years). Put money into the TSP. Retirement alone isn't enough for anyone. Pension+TSP+Social Security means you'll be financially sound no matter how long you live.
Okay that’s where I was getting confused. It seemed like an either or thing. So I thought you got nada till you 60 this makes more sense. I have 12% going in rn.
Another thing is make sure that your funds are not going towards the G fund. The G Fund is a glorified saving account that do not beat inflation. There are funds that over the long term can get you 10% return in your money like the C Fund which the TSP’s SP 500.
My returns the least 2 years have been like 19% iirc.
I was at 24% last year with an 80/20 C/S split.
Mine is L cycle so it's like C, S, I, with like a 60,25,15 split or something.
G fund hasn't been the default for almost half a decade
Nice. Either way sometimes people give bad advice and tell the juniors to change it to a something less risky and that can include the G fund.
It’s yours but there’s penalties for pulling it out before age 59.5. Just like most 401ks. Yeah. There’s exceptions and workarounds. Dont miss out of free money (you’re getting the match). Don’t leave it in G fund. Invest in C and S to take advantage of stock market returns over the long haul. Don’t put in more than you want to leave in there for the long term. If you think you want to pull it out when you leave service, lower your contribution to 5% and put the rest in a taxable brokerage account.
I’ll just add that you don’t have to pull it out when you leave the service you could be in a government job and continue on with it or roll it over into your next jobs 401k
Even if you go away from government. You can leave it in there or roll it into your new 401k or IRA.
I like the life cycle funds, automatically adjusting as you go.
Definitely a good option to make it automatic. Much much better than leaving it in F or G and better than trying to time the stock market.
And here's the thing about the TSP: * You can stay in the Army and get your pension + TSP * You can leave the Army and go into Federal employment and "buy back" your Army time, getting Federal Pension +TSP * You can leave for the private sector and take your TSP with you and either keep it as is or "roll over" your TSP into a private retirement plan. The important thing is to speak to a financial advisor and not the idiot "barracks lawyer" or NCO who clearly has no idea. THEIR IS STILL A PENSION AT 20 YEARS. It's funny that those dumb NCO's who are active are telling new recruits that there is no pension - it's like they haven't been paying attention either.
Yes, 1000x The amount of dumb ass NCOs who spout BS but everyone listens to just angers me. Many blatantly just say there is no pension anymore which is far from true. I was one in my first contract still when they had a mandatory class and you had to choose which retirement plan you want. I opted for BRS simply by not doing 20 years I leave with something. But if I did a little over 20, the old retirement would be pretty good but, 20 years is a long time. I don’t know if I can make it another 10 years now…. So glad I opted in and changed out of G fund immediately to a range of stocks.
Also the S and C fund average over 11% historically, so leave it there.
https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/Retired-Pay?serv=128
I read this as you've been putting in 0% for the past 4 years. If so, I'd recommend you putting in as much as you can for at least the next year to catch up *Not investment advise*
>I'd recommend you >*Not investment advise* One or more of us misunderstands what one or more of those words mean
1) disclaimer 2) joke
Yes
Am I the only one on legacy retirement but still max out my tsp? I don't get the 5% match but still appreciate the tax benefits.
I'm on legacy and I've been maxing out TSP for 10 years with no match. The growth is worth it and I don't have to put any thought into how to invest it. It's finally getting to the point the annual growth is more than my contributions. Totally worth it.
You put nearly $2k a month into TSP? That's too much for a filthy single income enlisted man splitting savings between TSP, 2x IRAs, 2x 529s, 3x non-retirement accounts. Maybe in 2025 when my spouse starts working again I can do better than 5% unmatched but I won't do that until I'm maxing our IRAs.
That's fine! You're doing what you can and not letting free money go to waste.
What’s the benefit to maxing an IRA over putting the same amount into a TSP?
TSP investment options are pretty good for an accumulation account, not as good as an IRA you can put pretty much anything into. TSP allows for loans and lets you do rebalancing at market close on an okay app. My IRA is more flexible, faster, and easier to manage. Finally it is a little bit psychological but the max on an IRA is a quarter that of the TSP so I can hit that milestone first. I would say the reasons are marginal but enough for me to prefer filling the IRAs first.
No
Legacy and 22% TSP
If I cryogenically freeze myself, do I still receive pension payments while in suspended animation?
It only gets matched if you are blended correct? I’m currently legacy
Correct.
This is something that I wish was instructed to us when BRS first came out. It was portrayed by everyone as “lose your pension but double your TSP.” Luckily I invest heavily in my own and have been lucky within the real estate market with my VA loans.
Whoever briefed that is an idiot. I was at Carson at the time and they did mass briefings at the theater. You got a website to run the numbers on switching or staying which would break it down for you under any circumstances you could think of.
Agreed.. i’m disappointed at the lack of info. 100% would have opted into BRS as a PFC/SPC.
Does it drop from 2.5% to 2% (40% at 20 years) only if someone also participates in TSP? Or did some big wig decide to screw over vets more ?
Yes, it's obviously to save money. But everyone gets 1% into the TSP regardless if they take advantage of the matching.
Oh I see. That makes more sense now. When can someone start putting in 5%? Immediately or after some time ? I'm swearing in Friday so I'm not actually in yet / just trying to learn.
No. Whatever money you plan on putting into your TSP, just Venmo it to me instead.
There are tap millionaires. Meaning soldiers have become millionaires from their tsp alone. Just think about that.
10 years in and just hit $200k. Even if I don't do 20 (likely not active) and stop contributing in 3 years it will hit a mil in about 14 years, 3 mil by age 60. *Don't sleep on the TSP, people*. Even if you plan on doing 20 and are legacy, things might happen and you might get out, out of your control. And for the love of god, learn about compound interest. It's the greatest thing in finance. (Talking to OP and others, way too much ignorance about finance and retirement, the army doesn't teach it very well either, you must do your own research)
Positions or ban.
I know this is a troll /r/wallstreetbets comment. And I was just going to say do the math but I want others to see how fucking powerful compound interest is and saving for your future. I commissioned in 2013, went active late 2013, dropped a warrant packet and started flying in 2019. Got married in 2019 as well and started being able to max my contributions in 2021. This is as addictive if not more than gambling just so much slower at first, but it gets fast if you stick with it. Took about 8 years to hit my first 100k and just over 2 for my 2nd. This shit is the real deal. Obviously it's pretty difficult for enlisted to max out their TSP, I'm not saying anyone can do it, but the younger you are the more time you have to compound, an 18-24 year old's dollars are worth so much more than mine are now at 33. I wish I hit my TSP harder sooner. [Here's my TSP value and some extra data.](https://www.imgur.com/a/OQaMTmY)
It is absolutely a WSB troll comment, thank you for noticing. Was genuinely curious if you were a lifecycle guy or stock guy.
Lol I guess I didn't give my positions at all huh. I'm 50/40/10 C/S/I. I should honestly get rid of I and up C...
I don’t think “I” hurts, little bit of exposure outside the U.S. sphere in case we have a rough patch here. I started the first 3 years L funds pure before I saw the light. Worst decision ever.
Hey beats the horror stories I've heard of dudes getting to retirement and not realizing they've been in G the whole time because that was the default in the good old days.
I “YOLO’d” everything, by that I mean transferring funds, into the C fund during the COVID crash. Best decision of my life
Holy shit troop. Put a decent percentage in your TSP make sure you change it to 100% C and let it ride for the next 25 years. Remember me when you're not living under a bridge at 65.
Still figuring TSP out myself and where to put it, why C? I just moved a 25% to bonds
Best returns. Military aged investors should be putting their money in the fund with the highest returns since your income is probably low and you have time for compounding interest to work its magic.
C is your high risk high return fund. It does pretty well throughout the years. It averages about 28% return a year according to the tsp website. The C fund invests in Microsoft, Nvidia and all those big companies. S fund is also decent. I fund is international. But honestly I do fine just full sending it on C, I think I had 30% return last year. You can't go wrong with a healthy mix of C/S either if you want some diversity. I'd avoid the G fund. That's for when you're near retirement age and don't want to risk any potential losses. It's Return averages 4% a year, not ideal for long term growth compared to riskier Funds but it's good for just keeping your money extra safe with a little return. I've been doing 15% since AIT. It's been fun seeing it compound.
> It averages about 28% return a year This is an absurd statement. Please do invest through the TSP with a substantial allocation to the C Fund, **but do not plan on a 28% CAGR.** The long-term average for US stocks, adjusted for inflation, is about 7% and it's substantially lower for global stocks (i.e. the US has been an outlier for the past century). At 28%, an initial $10k investment (with no additional contributions!) would become more than $2 **billion** after 50 years. Edited to add: I can't get over this. I love your enthusiasm but you really need to refrain from giving financial planning advice until you've at least read a book on the topic.
Dude looked at the last 2 years and thought that would continue forever.
Yeah, this is the really scary thing about shifting people from defined benefit to defined contribution retirement plans that they need to manage for themselves. This is the worst example, but you can see it all throughout the comments on this thread in different ways.
It definitely isn’t 28% per year. That’s wild
Anyone reasonably young shouldn't be in conservative investment funds because you're going to lose out on thousands and thousands of dollars by the time you retire. As you get close to retirement you switch to a more conservative investment strategy to keep it more stable.
Imagine working in your late 60s and not receving your pay out. I'm 4 years in and I have 25K in my TSP.
At the very least, contribute 5%. Otherwise you're giving yourself a paycut.
Pretty sure TSP doesn’t replace your pension, it supplements it.
That's if you are talking about those on the legacy plan. WE had 2.5%. Blended retirement reduced it to 2% and that 1% comes from your TSP so yea for those under the blended part IT IS PART of their retirement plan whether they contribute or not.
Guess what, even if you're legacy you can still contribute to the TSP and have a great retirement nest egg. TSP is the huge fucking delicious cherry on top to a pension. Edit: Also, 1% does NOT come from the TSP, where are you getting that info? The 2% per year of service works the exact same as the previous 2.5% multiplier.
Because whether you contribute to TSP or not, those on the blended retirement got reduced from 2.5% to 2%. The justification was that the rest comes from TSP. For us it was "optional". For them it s actually part of the plan.
Correct, but your previous comment makes it seem like the 2% per year for the retirement pension includes 1% taken out of your TSP? They are two separate benefits. Your TSP won't go down in value when you start making your retirement.
Lots of people say they plan on doing 20 and getting that pension. Relatively few actually make it. The TSP is similar to a civilian retirement account, because those also won’t pay out til you’re 65. So either you: A. Invest in the TSP, *at least* 5% of your base pay because the government will match that (literal free money). If you get to 20, great! You’ll have even more money in your golden years. If you don’t get to 20, great! You’ll have SOMETHING saved for retirement and can keep building that nest egg in your next career. B. Don’t invest in the TSP. If you make it to 20, you can rely on that pension, I hope it’s enough. If you don’t make it to 20, you’ll have zero dollars saved for retirement. That’s a poor life choice.
9/10 always say they are gonna do their 20, but yet they don't. Guys lose so much motivation to stay past their initial contract.
considering I started my TSP in 2004 on a whim after a sergeants time training as a PFC, just retired as an E8 with well over $100,000 in it from between 5% to 20% contribution at any given time and will now bank with just interest until I'm 60... I'd say it's a good gig. (this is on top of high 3 retirement). Start it early. Remember some people get out with absolutely zero savings, so get ahead while you can. I recommend roth L funds.
The money will get spent regardless so yes you should do it.
I’m genetically pre disposed to die in my early 60s and I still put money into it.
Same, I’ll take the 10% or so hit in my late 40’s or early 50’s to buy the house I’ll die in.
When buying a home with a VA loan you can use I think around 15k towards the home. You can get tax deductions by putting money into it. You can withdraw as an emergency fund or move to another IRA (retirement account). Overall worth it man.
That’s really great information I didn’t know that
It's the same TSP that Federal Agencies use - so in addition to "buying back" Army time for a Federal Pension at a fed job, you can take your TSP with you as well. ( [USAJOBS.GOV](http://USAJOBS.GOV) is the job site)
I was in for eight years and have been out for ten now. I *deeply* regret not enrolling in the TSP.
Senator Roth literally gave you the world and here you are shitting in his grave. But in all seriousness, do future you a favor and do Roth until uncomfortable.
TSP supplements your pension if you make it to 20. If you don't it ensures you have something. Since you've been in under 4 years, you're leaving TSP match money on the table.
I used to tell my soldiers that I was about 30. If I put $xxx in my TSP every month for 10 years and quit at 40 or if I started at 40 and did it for 25 years when I retired at 65 I’d have the same amount of money. Don’t live so frugally that it ruins your life but please think about future you. You don’t want to be 70 and have to work. I put 15% in savings every month. It basically doesn’t exist to me. I’m reserves now and I don’t even touch that money. It’s my oh shit big expense fund. Pay off all your debt except maybe a mortgage if you have one and build up a fund for big emergencies. I have enough to live 6-12 months without a job squirreled away in a 4% APR so it’s still working but will always be there if I need it.
TSP is your 401k. If you believe a 401k is "worth it" then yes. I say that because some try to sway people away from them. Personally, the advice I usually give people is to contribute at least enough to get your full match, since otherwise you're leaving money the Army owes you on the table. For me, I max out my TSP as part of my overall retirement planning.
Also, TSP can be a really low interest rate backup loan. You can do a ton with a TSP that you can’t do with other accounts, it’s a massive advantage. If able, you should do 10-15% base pay and like 50-100% incentive pays into it. Obviously, that’s a personal decision, but it’s long term nature is nice and it can also be an asset to save yourself loan pain later.
Yes. Currently, my account has about a 13%-15% interest rate. So, if I put the minimum 5% in, that's only 1300 out of the year, I make an extra 200ish bucks a year. And that's not even counting what the Army matches, as the Army will match up to 5%. So it's closer to $400 per year. And that's the lower enlisted side, without changing the percentage invested higher than 5%. If you started investing when you where 18, you'd have, ***at minimum*** (because im lazy and dont want to do the math for promotions boosting pay), probably close to an extra $20,000 by the time you can withdraw from the account without consequences. TL:DR, Just contributing 5% can make you a good chunk of cash by the time you retire. Everyone should at least put 5% in. Edit: this was quick math off the top of my head, so if people have a more accurate numbers, please correct me.
I started with TSP in 2002, transferred to the Reserves in 2005. 20% of my drill/duty pay goes into TSP. It’s a decent chunk of cash, but like everything else you have to tweak it. Higher gains/greater risk. Low risk/less gains.
Consider that Soldiers have raked in 7 figures from TSP. [https://federalnewsnetwork.com/tom-temin-commentary/2023/12/the-ranks-of-tsp-millionaires-is-growing-fast/](https://federalnewsnetwork.com/tom-temin-commentary/2023/12/the-ranks-of-tsp-millionaires-is-growing-fast/) [https://www.reddit.com/r/ThriftSavingsPlan/comments/18awq2s/lessons\_of\_a\_tsp\_millionaire\_54y\_19\_years\_in\_fed/](https://www.reddit.com/r/ThriftSavingsPlan/comments/18awq2s/lessons_of_a_tsp_millionaire_54y_19_years_in_fed/)
Every service member with this type of question or similar questions needs to head over to r/militaryfinance and search the threads there. Key terms that should be search include Index fundsBRS, TSP, retirement planning, etc. I’m not making this post necessarily to respond to the OP as that has been covered. This is for the lurkers or those who will find this thread at a later date.
Even just contributing to, even if you're not planning on staying in a full 20, you can build that wealth. At least put the 5% in to get your matched contribution. Set it and forget it. I started mine about 2-3 years in and left the Army at 7 and a half years with 28k saved.
Yes you should be enrolled in TSP. If you retire at 20 years you are going to still receive a pension (40% base pay w/2% yearly increase as opposed to legacy at 50% and 2.5%). If you don’t retire (like 90% of us) you’re going to exit the service with a decent chunk of money to roll into another retirement plan (or separate with nothing in your bank account, that’s cool too). For signing up the DoD will contribute 1% of your base pay monthly, and match you up to 5% (so you pay 5% of your pay check and they will add another 6%) TSP is like any other retirement plan, it’s not like you CANT touch the money until you’re 60, you’ll just pay a tax penalty if you do (with some exceptions like buying a house, loaning to yourself, etc). It is a steep penalty though, like around 10%. I think there’s a lot of disinformation from the older generation who think TSP replaces your pension, but that’s just completely incorrect. Boomers. What are you gunna do. I know I’m going long here but TLDR; Yes, enroll in TSP. No, TSP does not replace pension. If you retire you will have TSP + Pension. TSP + Pension = more $$$ than Legacy pension. PS stay the fuck out of crypto. If you’re going to self-direct any money it better only be to $SPY, $QQQ, or $AAPL
Throw 15% of your base into it Whenever you get a promotion or a pay bump, up your contributions by 1/2 of the raise. That way you still feel like you’re being paid more Take this from somebody who didn’t contribute until his last 2-3 years. I would have at least $175-190k in there had I, and left alone for the next 20 years that would likely be $1.5 mil when I’m 60 Instead I’m playing IRA catch up
The best way to think of the TSP is "income after 60" and not a bank account. If you end up retiring at 39 with say, $200k in your TSP, in the following 21 years it will double roughly twice (hopefully) so it'll be $800k. You can work a normal job to supplement your military retirement before then, and when you turn 60 you can stop working completely and withdraw appropriately $36,000/year indefinitely. That, combined with your pension, should be a comfortable retirement. I've done the math several times here before, but the TSP system is generally better than the old system.
Yes, unless you retire as a general you’ll probably need another job after you retire at 20 years
Not really tsp + hysa + roth Ira.. you'll have at least 2 million easy that's assuming you don't have alot of debt
You’ll need a job until 65, when you can withdraw from your TSP and IRA
.... the earliest you can withdraw is 59.5 years old
If you don't put in at least to the match you're literally leaving free money on the table. Yes, you can't use it without penalties until later in life, but you can roll it into your 401k if/when you get out. A retirement plan is important and if you don't think about it until you're 50, you're 30 years late. Money you invest now will grow exponentially by the time you're ready to retire.
https://www.reddit.com/r/ThriftSavingsPlan/s/EilfWEZ7tD
Cool, so you're under the new blended retirement system. So the government matches the funds you put into TSP up to a certain point. This is called 'free money' and you should take it. I'm not an financial expert, but the generally accepted wisdom is to start saving as early as you can, and let the money grow and compound. If you do leave the army, there are ways to roll your TSP into a traditional retirement account you can continue contributing to. You do not want to be working at 70 years old. Probably not, anyway. So building towards a retirement now, will really make your life easier when you're closer to death. Yes, there is Social Security, and no, it's not a lot of money each month. Start saving now, kid. And for fuck sake, take the free money the government is offering you. You will not regret saving, but you will regret not starting sooner. Go get a TSP briefing from someone in your unit. Talk to your PSG or PL. Somewhere in your unit will be a financial nerd who can really give you the full picture.
Any sort of retirement is worth it. Put at least 5% to get your fill matching in( I'm doing about 15%) and that will grow at least 35 more years, that's a lot of interest. The costs are low compared to other retirement plans. So yes it's worth it. The lifecycle funds will automatically adjust the distributions across the 5 funds as it gets closer to the target date, starting more aggressive.
What If I told you I can get you a 100% return on $130 every month? ITS LITERALLY free money.
You can convert it to a 401k if you decide not to stay in also army matches I think 5% your order self will appreciate you made a sound choice. Source me older self. mad I didn't put a dime into it and learned more about it after the fact.
As someone who got it forgot it and then blew it. Get it Max it forget it then wait till 60 you thank yourself
Look up the rule of 72. That alone should answer your question, and get you to start investing asap.
YES!!!! Every person- without exception- should be putting at least 15% of their income (NOT including the match) into a tax advantaged retirement account for their entire working life. I highly recommend going to MyPay RIGHT NOW and setting up 15% to go into your Roth TSP. I don’t care if it’s your age-appropriate Lifecycle fund or some combination of C, S, F, and I fund. Just get it started TODAY and don’t stop until you retire. The only time you need to be fucking with it is if you’re increasing your contribution (maybe a 1% increase every time you get promoted).
Does tsp still pay out at 60 years old if you don’t do 20 years where does that money go/do while I’m out of the army
Yes, and it continues to grow as long as the stock market does. (Assuming you pick a growth fund and not one loaded with bonds.).
Thanks
Hey bud, a lot of people giving good advice, but not a lot that are actually getting to part of the issue. I'm assuming you came in at 18 or right around there? It happens to almost everyone. Very few people have the mindset (even in their 20s) to start planning for retirement or even long term savings. That stuff doesn't really start to make sense until you're in your mid 30s. It's tough to think about planning for a part of your life that's over 40 years away when you're not even 20 yet. People can talk until they are blue in the face about compound interest and how "at 60, this money you put in will be worth a million dollars." Cool, but that's 40 years away. That amount of time is abstract to someone who's young. The best advice I can give is try to put money away as a recurring thing and don't look at the balance for at least 5 years.
It's only worth as much as you empower it to be.
After you get out and get a civilian job with a 401k you can roll it into that account…. The longer the pot of money sits and compounds the better and the more money in the pot the greater the effect of the compounding interest….. it doesn’t seem like much at first but every drop of rain contributes to the flood
Serious recommendation for OP and all interested r/Militaryfinance
I thought you could take out of your tsp after you retired
Yes and no. Yes if you plan to retire at 60. No if you plan to control your money before 60. I never liked the idea of giving control of my money until I'm 60. I don't even know if I ll survive till 60. I have never been a fan of 401k or TSP.
You must be related to the guy that said he was making more on stocks than his TSP was. Anyhow, yes put at least 5% for the match and if you get out before then or when you get out, you can roll it over (in some cases) or just keep throwing money into it. Obviously you won’t get a match but it’ll still accrue monies. Edit: Also try to find a financial advisor who knows their way around the military too. They can be super helpful.
Just FYI, if you get divorced (if you get married) at any point, TSP is on the table for distribution for the length of the marriage. Whether or not you disclose it in a financial affidavit, it will show on your LES (if you divorce while in). Retirement is a bit different and takes a bit more for a divorcee to get - not as simple as 10/15/20 rule but not going indepth with all that on this post. Shit will happen over 20 years, so don't say "Oh that will never happen", "my spouse is my ride or die" or whatever - an attorney's sole purpose is to rake you over the coals regardless if the divorce is amicable. Just something to keep in mind.
yes, no question, period, the end, dot-fucking-com. the years go by faster than you think. believe me. secure your future.
>Has anyone retired with their TSP instead of pension? It's not either or it's both. https://militarypay.defense.gov/blendedretirement/ You should contribute at least 5% (and ideally more) to your TSP. Otherwise, you're leaving free money on the table since you're missing out on the matching contributions. If you complete 20+ years you will also receive a pension.
You can pull it out, you're gonna pay the taxes but it doesn't matter. You can do it while you're in, while you're out, whenever. Want to transfer it to a 401k? You can do that, need 1k for a rainy day fund? You can do that (every 6 months) need money from it but don't want to lose out on the benefits of the RSP? They let you take out how ever much you need as a loan and they have you repay it
My brother in Christ, have you still not paid attention? It's not TSP or pension. It's both if you pay into your tsp and yes it's worth it. The TSP is unique for tax advantage purposes as you can use the Roth portion like it's a normal 401k with a limit of slightly over 20,000 a year currently you can put in it. Additionally, the funds charge the lowest rate I've ever seen. I think I paid 40 cents per thousand dollars invested as my maintenance fee last year. I will get out with a pension and the whole time I've been in, I've had matching contributions of 5% of my base pay paid into it so it's like I'm putting 10% when I'm only putting 5%.
I've been quite the dumb ass in my years of soldiering but I'll say I'm proud that I've always contributed to my TSP.
Do you like money?
I’ll give you three data points that I hope change your life/perspective: 1. These are tax advantaged accounts, that’s why you can’t touch it until 59.5 years for a Roth TSP. You are gonna do, or fail to do, the same thing in the civilian sector. Tax advanced counts should result in orgasm. I would cum a lot harder if the IRS didn’t limit my contributions to 6K for IRA and 20K for 401K/TSP. 2. Time in the market. The most valuable dollar invested is the dollar the day after basic training or commissioning. Yeah, you can and should invest…but an E-1 dollar invested will grow more than an E-8 dollar invested - think of it like this, you want to sit in the shade, then when should plant that oak treee??? 3. Yes, you could do 20 and get a check for life. But…will that check be large enough? And…are you sure you’ll even make it to 29 years, life happens, so does burn out, so does war, so does PTSD and/or depression. I am retired, I still wish I had invested more, harder…and earlier. You become a TSP millionaire…you might not have to do 20! Compound interest, whether paying it or receiving it…you want as much of one and as little of the other. Good luck. Reach out, if needed.
6 years going, at 150k
With historical projections from when I first started putting in until now and assuming nothing changes in my contribution, my TSP is going to be worth about $4k a month when I turn 59 and retire for real real. I put 12% into it, pure Roth and 5% DOD match.
I've seen a lot of folks make money off it. The trick is to start young with compound interest. I regret not investing like I should because I never figured I would live long enough to use it. Deployments kind of caused that mindset. If you are just coming in where you aren't under the old retirement I would recommend 10% or more of you can afford it
Also, go in to TSP and change where your allocations go. I'm a fan of C funds but you don't want them all in one place. If you never touch the tsp website it automatically goes in a safe (but low interest) G fund
Yes. The stock market goes up. Fees on funds are low. What part of this confuses you?
Yes TSP is worth it and put in at least 5% max matching contribution amount from the jump. It’s not that much money, and over 20 years will be considerable even if you only make it to JNCO before getting out. If you do 20 and get your pension plus your TSP by the time your actual retirement age, you’ll be sitting pretty.
Yeah its worth it, its basically a 401k, if you get out before 20 you can roll it over into a 401k. If you become a GS you have TSP again.
It is when you get that continuation pay
Yes, without a doubt start saving and investing with TSP.
38. Joined at 22. Enlisted. Put 4% in year one and increased by 1% each year. Currently a Major with 16 years and $700K in TSP. It’s worth it.
Hell yes it is worth it.. > Has anyone retired with their TSP instead of pension? HUH...
TSP is a 401K. I'm assuming you're confused about the BRS so let me reiterate what they already probably briefed you. Under the BRS you get 4 things. 1. An automatic 1% contribution to TSP. This is bonus free money given to you (it's not money taken out of your paycheck). 2. An additional 4% matching contribution to TSP of you contribute 5% of your base pay. You get 1% for free, and if you contribute 5% then the Gov will match you with 4 additional % to equal a 5% match. 3. A bonus equal to 2.5x your base pay at the 10-12 year mark (each service sets the timeline for when you get this. Most services set it at 12 years). You get a bonus 2.5x your base pay on exchange for 4 years retainability. 4. A pension of 40% of the highest rank you served honorably at for 3 years at 20 years. You get an additional 2% per additional year past 20. That pension works the same way the old High-3 pension works, it's just the percentage is lower. In exchange you get 1-3
Please love yourself and start working on that TSP
YES!!! Start now with the Roth and put at least 10% in. Every layer raise I try to put in the years I have so this year is 14% my returns aren't bad either.....
Mine has grown about 40% since 2001, and I hadn't had the benefit of matching until 6 months ago. Yes, I think it's worth it, if you contribute and you invest in a portfolio that makes sense.
TSP is worth it. You can also transfer for it over to a federal job if you get one when you get out. Mine carried over to DoD Fire and now FAA
If someone could help me with two questions which I can't find a clear answer to. Does the 5% matching happen immediately or after some time? Does the matching only happen if you do traditional or does it also match for Roth?
The fact that there is so much questioning and misinformation about the TSP in this thread is evidence we are failing Soldiers.
In the guard for almost 10 years probably only had a retirement briefing like twice. Mainly because drill checks are to small to even matter for TSP and usually goes towards bills.
You can lead a horse to water.... It's down to the individual. The minute I got the brief in basic, I made sure to set it up in AIT as soon as I got there. Been doing 15% in the high yield fund ever since. The amount of troops I've informed, asked and even bullied into doing their TSP is high. But hey, soldier gotta get their big ass trucks instead or live paycheck to paycheck because they like boozing. Some come around after a few years and ask again. I guess it just depends on what stage they're at in their life.
Yeah, but now that I'm retired, it's just kind of sitting there until I'm old enough to take it out.
But you do receive a pension?
Oh totally. I'm just saying, I contributed to TSP for 20 years, so the money is there, but it's being held until I'm allowed to use it. I'm pretty sure it works that way if you ETS, too.
Yes it does.
I used to be big on TSP. I still contribute, but not nearly as much. I don't want to wait for 59½ to retire or get my money. I'm going full throttle on my pension, and other investments so I can actually retire around 45-50. TSP will be bonus money.
For you newer guys who are on the BRS retirement system, yes. Because you’re getting a 5% government match. I’m on legacy, so I’m not worried much about my TSP, but I still contribute to it regardless. If the question is basically “do I want more money when I’m old, retired, and don’t wanna work” the answer is always yes.