What do you think of the improved DoD TSP matching program?

SFC Private RallyPoint Member — Wed, 03 Feb 2016 04:51:09 -0500

Response by SFC Stephen King made Feb 3 at 2016 5:04 AM

SFC Stephen King — Wed, 03 Feb 2016 05:04:04 -0500

SFC Private RallyPoint Member I like the changes and the direction it has taken. The Roth TSP and matching contributions especially.

Response by 1SG Private RallyPoint Member made Feb 3 at 2016 6:56 AM

1SG Private RallyPoint Member — Wed, 03 Feb 2016 06:56:40 -0500

Don't do it! Keep with the old system if you can. Ask a finance professional, in the long term the new system only benefits the gov't and those that don't stay for 20yrs.

Response by SSG(P) Private RallyPoint Member made Feb 3 at 2016 7:24 AM

SSG(P) Private RallyPoint Member — Wed, 03 Feb 2016 07:24:24 -0500

The only good thing about it is if you leave before 20 years are up, you can take it with you. In my experience, if someone has a new way of doing something that wasn't broken, it only benefits them.

Response by 1SG Private RallyPoint Member made Feb 3 at 2016 7:48 AM

1SG Private RallyPoint Member — Wed, 03 Feb 2016 07:48:49 -0500

I never liked TSP as a retirement instrument. Without a match (since changed by recent legislation), it was basically a tax-deferred IRA. And one that underperformed the market in several of the fund choices.
The best thing about it was that it has a very low expense ratio. This is real good for the investor who uses the Index (I Fund) or Government (G Fund) in particular. Similar commercial investments will underperform those two over time.
The match is a game-changer, though. A guaranteed initial return of 100% thanks to the matching funds make this a good choice for most Soldiers.

Response by MSgt Private RallyPoint Member made Feb 3 at 2016 8:12 AM

MSgt Private RallyPoint Member — Wed, 03 Feb 2016 08:12:31 -0500

It's nice to see people finally have an option rather than "sticking" it our to the end.

Response by LTC Paul Labrador made Feb 3 at 2016 8:40 AM

LTC Paul Labrador — Wed, 03 Feb 2016 08:40:01 -0500

Need another survey option: "Bad for retention"

Response by TSgt Private RallyPoint Member made Feb 3 at 2016 9:24 AM

TSgt Private RallyPoint Member — Wed, 03 Feb 2016 09:24:11 -0500

Crap, thank goodness I am grandfathered!

Response by Col Joseph Lenertz made Feb 3 at 2016 9:25 AM

Col Joseph Lenertz — Wed, 03 Feb 2016 09:25:17 -0500

Yeah, only improved if you're sure, and I mean certain, you won't stay 20. I was committed to leave at the 7 year point, and then again at 12 years. And then I stayed for 26. SOOO happy to have the 20 year retirement instead of this new system.

Response by LTC Yinon Weiss made Feb 3 at 2016 10:19 AM

LTC Yinon Weiss — Wed, 03 Feb 2016 10:19:00 -0500

I think it's great that people who don't serve 20 years will have some form of retirement savings to show for it. It finally brings the military into the 21st century.

One of the best benefits I see is improved overall quality retention and morale. At first, it appears that retention would go down as people "don't have to stick around for 20 years." However, do we really want people serving in leadership positions in the military if the main reason they are there is to "wait it out till 20"? No, if somebody is no longer motivated to just serve, let them exit and let them take their partial retirement pay. This will improve overall morale for two reasons: 1) People who don't really want to be there will get out and 2) Those serving under them will see an improvement. It will also create more advancement opportunities for those are actually want to continue to serve because they just want to lead in the military... and that's exactly who we should be retaining.

There is no reason to "lock in" leaders by dangling retirement in front of them. The military should promote leaders who desire to serve first and foremost, not those "sticking around" for retirement. This will have great long term benefit for morale and for the institution as a whole.

Response by PO3 Private RallyPoint Member made Feb 3 at 2016 12:36 PM

PO3 Private RallyPoint Member — Wed, 03 Feb 2016 12:36:05 -0500

If you never plan for a 20 years? then it will be an awesome deal.

The good thing is ... if something preventing you to get to 20 years ... you will glad you got the match TSP.

Response by SSG Private RallyPoint Member made Feb 3 at 2016 3:35 PM

SSG Private RallyPoint Member — Wed, 03 Feb 2016 15:35:22 -0500

If you got in before 2006 it doesn't really matter. I got all excited until I read that and then I put the posting back where it was. It's only for people who got in the last 10 years. Seems legit. The last round of bonuses were too. 20k for new recruits to instagram how snazzy they look in uniform at BCT and AIT. TY Uncle Sam.

Response by SGT(P) Private RallyPoint Member made Feb 3 at 2016 4:20 PM

SGT(P) Private RallyPoint Member — Wed, 03 Feb 2016 16:20:44 -0500

SFC Private RallyPoint Member Just posting a better pic for reference.

Response by SPC Paul Jennings, J.D. made Feb 3 at 2016 4:47 PM

SPC Paul Jennings, J.D. — Wed, 03 Feb 2016 16:47:46 -0500

It needs to be improved. The TSP matching is primarily designed to replace the lost pension benefit of 10% or 0.5% per year of service. However, the matching amount is not enough to actually offset this loss. Ironically, the Military Retirement Modernization Commission actually based their findings off a 10% TSP contribution, which overlooks that half of this contribution, the service members elective amount, applies just as much under the old system as the new. Additionally, they used an outrageous calculated return to come to their conclusions. So, while it is beneficial to those who get out early since previously they received nothing, it still falls short of its intended purpose.

Response by CDR Terry Boles made Feb 3 at 2016 6:04 PM

CDR Terry Boles — Wed, 03 Feb 2016 18:04:14 -0500

Just my thoughts. I'm still AD and have Final Pay as my retirement type. EVERY new retirement plan that comes along has not been in favor of the retiree. When the High-3 came out, in order to benefit from it one had to stay in for at least 3-years to qualify for their Final Pay equivalent. The they modified with High-3 Redux, well that didn't go over very well so they relaxed that back to High-3...hopefully few were sucked into the Redux portion.

Now with TSP its a new gamble on one's retirement with the ever fluctuating stock market and TSP Plans that seem to me to under perform.

TSP has been a part of our retirement for a few years now, just not a matching portion unlike the federal civil servants. The federal civil servants did not give up any of their retirement options when matching TSP was introduced to them. I would venture to say, the federal civil service workforce still working and retired is massively larger than the military; as an example HHS has a larger budget and workforce than DoD (military members).

As mentioned TSP has been an investment option for the military for some time now. I find it hard to believe that every member can contribute the max amount each month allowed by law, any under funding would lead to less growth potential. Most young troops and officers simply can not afford to contribute the max amount each month, I use my own experiences and close friends TSP investment discussions.

Those members who decide NOT to make the military a career had the TSP before and the TSP now, only difference is the POTENTIAL for matching funds based on their dollar amount contribution. The matching funds most likely will not be a real incentive for this 82% unless they stay longer than possibly 10-years...then why get out when your half way to retirement.

All this to say, it was never intended to benefit any one group since TSP was already in place. This is simply a measure to reduce the retirement pay for DoD since a matching TSP was introduced and the traditional pension portion was reduced and put the retiree in a place where they are now gambling a portion of their retirement in the stock market.

So, in all complete fairness, why didn't the federal civil servants across all federal departments also take a pension hit when they received matching TSP? You gotta ask yourselves about "fairness" which is mantra for this administration.

I think its just another poke in the eye from a civilian minded administration that does not and will not ever understand the sacrifices a member and family makes over a 20-year hard earned retirement. They can never understand the sacrifices you make, the fears your loved ones have every time you deploy, the stresses the children live under, the frequent moves, lack of setting down and paying off a house mortgage...and much more.

Simply, future retirees got the shaft!

Response by SFC Private RallyPoint Member made Feb 4 at 2016 7:18 AM

SFC Private RallyPoint Member — Thu, 04 Feb 2016 07:18:29 -0500

Before I joined the military, I worked for a company called Stryker Medical. This was back in the late 90's and the company was matching stock for stock and adding 1/1 by what ever the employee decided to put in their retirement fund. Back than this was a great plan for young individuals to build a fast retirement fund. The program the army is going to, doesn't help Soldiers with over 10 years of service. A 20 year retirement is probably one the best programs that army has used to help Soldiers move on after service. I don't think I know of any other company that pays a retirement after 20 years besides for other federal jobs. I say no to TSP and the matching. I'm too far in my career to start over with a new program that only helps those that are enlisting right now.

Response by MAJ Daniel Buchholz made Feb 4 at 2016 1:12 PM

MAJ Daniel Buchholz — Thu, 04 Feb 2016 13:12:39 -0500

Here is the thing, of course this seems like a bad deal to a small number of people (those that aim at and attain the 20 year retirement goal). However that number, those who make it to retirement, represents a small fraction of the service members who have served. This is a pretty good deal to the 83% of Service Members who never make it to retirement, who under the old plan left with exactly zero dollars from the government for their retirement. At the very least every new service member (at least those that serve at least 3 years) will leave service with something (at a minimum the 1% automatic contribution).

Since this has happened every leader should advise their new service members to put in 5%, otherwise they are leaving free money on the table (for current SM's, there are a lot of individual calculations to determine if this is a good deal or not, there is no blanket answer for that since each person has their own priorities).

Response by SFC James Reeder made Feb 6 at 2016 10:21 AM

SFC James Reeder — Sat, 06 Feb 2016 10:21:09 -0500

Nothing beats a Roth IRA as far as I'm concerned.

Response by SFC Phillip Wiley made Feb 10 at 2016 8:28 AM

SFC Phillip Wiley — Wed, 10 Feb 2016 08:28:17 -0500

Ensure when you retire that you check your first pay check. Took me 4 months to get mine corrected as someone had marked redux (something I never did) and I was loosing over 250 dollars a month. I have to agree if you have no plans to stay 20 then it may work for you.

Response by 1SG Private RallyPoint Member made Feb 17 at 2016 7:57 PM

1SG Private RallyPoint Member — Wed, 17 Feb 2016 19:57:17 -0500

Contribution matching is long overdue for the military, the new system is great for Soldiers who do not plan on making the military a career. But I don't see it as a better retirement option when compared to the current retirement system.