The military will give you up to 5% more pay for contributing to TSP! Are you willing to switch to the new TSP savings plan?

2016-08-09T01:35:07-04:00

Under the new TSP system (optional for those in now, mandatory for new recruits 2017), the military will match up to the first 5% what service members contribute into TSP. However, for those planning on retiring at 20-30 years, retirees will only receive 40-60% pay instead of 50-75%. The new TSP system is great for those now planning on retiring - is it for those who do? Will you make the switch?

Response by SPC(P) Private RallyPoint Member made Aug 9 at 2016 2:12 AM

2016-08-09T02:12:48-04:00

I will, I plan on using my Roth IRA for my main distribution source... Free money is free money!

Response by SPC(P) Private RallyPoint Member made Aug 9 at 2016 2:13 AM

2016-08-09T02:13:08-04:00

Plus I personally put 90% of my drill pay away

Response by COL Lee Flemming made Aug 9 at 2016 2:35 AM

2016-08-09T02:35:14-04:00

The disciplined saver could really make out with this plan, but extremely hard for the family that has a tight budget and is living paycheck to paycheck. The perceived savings for the government are tremendous though. I am still on the fence about this one and would not personally switch my retirement if I were in a position to do so.

Response by CAPT Kevin B. made Aug 9 at 2016 9:54 AM

2016-08-09T09:54:41-04:00

If you can put the 5% in for an immediate 100% return every payday, there is no other deal like it on the planet. If you can do 10%, even better. 5% that you never see usually isn't as bad as the naysayers assert. Look at it this way. If you do 5% for 20-30 years, your money at 60 with the annuity will be vastly more than the 40-60% Done right, it will be 100%. You just don't get it at 45 or whatever. I did the equivalent on the civil service side and wound up retiring to get a pay raise. Not a bad place to be.

Response by SFC Richard Giles made Aug 9 at 2016 10:42 AM

2016-08-09T10:42:17-04:00

I see it as a good thing but I think for some Soldiers it needs to be an automatic deduction.
Most 18-20 yr olds and maybe even older are not thinking about retirement, they don't even know if the military is going to be a career.
I think it's something they need to do starting at boot camp as well, the earlier the better.

Response by SGM Mikel Dawson made Aug 9 at 2016 1:56 PM

2016-08-09T13:56:07-04:00

I have never been one for the stock market and such investment plans. Instead I've invested in land, gold and silver. I was involved in such a plan once with an employer I worked for, until the plan went south and I was left with out. I guess for a young guy starting out, with no choice, the 5%, if automatically taken out wouldn't be missed. One thing to remember no matter what you do, it takes discipline to save.

Response by CW5 Private RallyPoint Member made Aug 9 at 2016 3:51 PM

2016-08-09T15:51:24-04:00

If I was eligible (I am at 20 now so I am not) and I was able to contribute a 'catch up' payment to simulate contributions from my first month in the service and receive the matching funds, I would most likely take advantage of the new method.
Unfortunately, those who are able to drop a check in a program are not able to do so. For example, the Savings Deposit Program (free and guaranteed 10% return) has a limit to what you can contribute as a whole (10k) as well as per month (1/2 base pay). They wouldn't let me write a check for 10k when I got in country so I was behind on my ability to collect when I finally got to the max amount.