These are my top recommended credit cards for this month. Some have $450-550 annual fees waived exclusively for US military personnel.

The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

All data available as images (below), PDF, or Excel document.

The Blended Retirement System (BRS) is an excellent way for military servicemembers to build their retirement savings. The BRS allows you to earn government matching up to 5% of your pay, so your Thrift Saving Plan (TSP) account can grow faster. This is a great change for the more than 80% of servicemembers who will not earn a 20+ year military pension.

I earned $2687 extra in matching from Jan-Oct 2018. That's real money, especially compounded over 40 years at 7%, when it will grow to $40,236.

The IRS announced the employer sponsored retirement plans (such as TSP and 401k) are increasing to $19,000 for elective deferral (employee) contributions in 2019. Individual Retirement Accounts (IRAs, both Roth and Traditional), are bumping up to $6000 for the year. That's a nice round $500/month to max your IRA.

Optimize your TSP Contributions Under BRS

The BRS TSP match can be worth thousands per year if optimized correctly. The limiting factor is you have to contribute 5% each month, as the match is paid monthly.

Therefore, you do not want to make all of your $19,000 of contributions (the annual elective deferral limit) in the first 6 months of the year: you must space out your contribution for the full year if you want to receive the full match.

I used to front load my TSP contributions as fast as possible at the beginning of the year. Under the BRS, this is no longer optimal so I changed my contribution strategy.

Don't worry about going over the annual $19k limit. As long as you don't have another employer retirement account (401k, 403b, self 401K), the DFAS computers will limit your final contribution to ensure that you max out the account without going a penny over. This can result in a nice bonus pay bump around Christmas and the end of year holidays.

How Much Should I Contribute to the TSP to Get the Full BRS Match?

If you want to maximize your TSP contribution for the year ($19,000) and receive the full 5% TSP match you are eligible for, you must contribute at least 5% to the TSP every month.

The formula is pretty simple. Take your maximum elective deferral contribution limit of $19,000 in 2019. Divide by 12 months = $1583.33. Then divide $1583.33 by your monthly base pay to get a percentage of contribution.

For example, if your base pay is $5000/month, $1583.33/5000 = .3166 or 31.7%. Round up to 32% because you can only elect contributions in whole percentages.

If you contribute 32% of your $5000 base pay, you will deposit $1600 each month into the TSP, Roth or Traditional. Therefore, up until November you will contribute $17,600.

In December, because you only have $1400 left of contributions, the TSP computers should only allow you to contribute $1400 and the remaining $200 will be returned in your paycheck. A nice Christmas bonus! Now you have maximized your annual contribution and received the full 5% match every month of the year.

The chart below shows the percentage you should contribute monthly for all enlisted, warrant, and officer ranks up to O-8 and 26 years of service. You can change your contribution election on myPay for Navy, Air Force, and Army. Click each image to view full size or download the PDF or Excel document.

How to max your TSP for the year and get the full 5% match

How much is the TSP match worth monthly?

If you contribute at least 5% of your pay to the TSP under BRS, you may wonder how much that is worth each month. Click the image for a bigger version or download the PDF or Excel file.

How much is the BRS TSP match worth annually in 2019?

If you receive the full BRS match every month this year, it can be worth thousands of dollars depending on your pay grade and time in service. Compounded over a few years or decades, your TSP match can grow to tens of thousands of dollars.

This additional investment can provide you with substantial additional income after financial independence or retirement. Click the image for a larger picture.

I hope these charts are valuable to you. Please share on your social media and leave a comment below if you have any questions about Blended Retirement System, the Thrift Savings Plan, or how to get the most out of the new system.

BRS TSP Match 2019: How much is it worth? How much to contribute?

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6 thoughts on “BRS TSP Match 2019: How much is it worth? How much to contribute?

  • December 2, 2018 at 13:37
    Permalink

    Hey Spencer,

    On the matching portion–since the matching contributions are allocated into a separate traditional TSP account, couldn’t you just move them over to your roth account once you have them? in a way, attempting to work around the bullcrap of the automatic traditional? I just opted in today…definitely waited a little longer than I needed to, but had time to think about it.

    Reply
    • December 2, 2018 at 19:04
      Permalink

      There is currently no mechanism to move Traditional TSP contributions or funds to the Roth TSP. The work around is convert the Traditional TSP to a Traditional IRA after you depart the military and then convert that Trad IRA to a Roth IRA. It’s cumbersome but can be beneficial in the right tax situation

      Hopefully when the TSP implements the “TSP Modernization Act of 2017,” a law Congress passed recently, in Sep 2019 we have more options to move funds around.

      Reply
  • November 18, 2018 at 18:01
    Permalink

    You mention that you can contribute to either TSP Roth or Traditional, however I was under the impression that in order to get the 5% match, you have to contribute to the TSP Traditional? Can you clarify this?

    Reply
  • November 13, 2018 at 23:39
    Permalink

    Once I get on TSP.gov, where should I allocate my funds specifically? Your previous articles recommended the the C fund and 1/4 of that in the S fund.

    Reply

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