Military TSP Match 2020: How much is the BRS match worth?

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The military TSP matching through 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 military Thrift Saving Plan (TSP) account can grow faster. This is a improvement to the military retirement system for the more than 80% of servicemembers who will not earn a 20+ year military pension.

I earned $3295 extra in matching from 1 Jan – 31 Dec 2018. That's real money, especially compounded over 40 years at 7%, when it will grow to $49,340.

In 2019 I earned $3745 in military TSP matching. Again, over 40 years that will grow to $56,079.34. Plus my 2018 match, I am now projecting over $105,000 of lifetime of the TSP match in just 2 years.

The TSP Contribution Limits announced TSP limits are increasing to $19,500 for elective deferral (employee) contributions in 2019. That's a pleasingly round number of $1625 per month to max your military TSP.

Individual Retirement Accounts (IRAs, both Roth and Traditional), are bumping up to $6000 for the year. Again, a number easily divisible by 12: a nice round $500 per month to max your IRA.

Optimize your TSP Match Contributions With 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 $19,500 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 $19.5k limit. As long as you don't have another employer retirement account (401k, 403b, solo 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 Match?

Click each image to view full size or download the PDF or Excel document.

The chart above shows the percentage you should contribute monthly for all enlisted, warrant, and officer ranks up to O-8 and 26 years of service.

If you want to maximize your TSP contribution for the year ($19,500) 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 $19,500 in 2020. Divide by 12 months = $1625.00 Then divide $1625 by your monthly base pay to get a percentage of contribution.

For example, if your base pay is $5000/month, $1625/5000 = .325 or 32.5%. Round up to 33% because you can only elect contributions in whole percentages.

If you contribute 33% of your $5000 base pay, you will deposit $1650 each month into the TSP, Roth or Traditional. Therefore, up until November you will contribute $18,150.

In December, because you only have $1350 left of contributions, the TSP computers should only allow you to contribute $1350 and the remaining $300 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.

You can change your contribution election on myPay for Navy, Air Force, and Army.

For example I am an O-4 with over 10 years of service. So I will elect to contribute 22% of my pay, based on the above chart. That means I will contribute 22% of my $7460 base pay every month to the TSP = $1641.2.

For the 11 months up to November, that's $18,053.2, leaving me $1446.8 ($19,500 limit – $18,053.2 contributed) to contribute in December. I will receive an extra $195 in my paycheck.

Because $1150.74 / $6241 is 18.4% of my base pay, I contribute at least 5% of my base pay in December and receive the full 5% match every month of 2019.

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 2020?

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.

2020 Military Pay Chart

Here is the military pay chart I based all my calculations off of.

Military TSP Match FAQ

How much does the military match on the TSP?

The military automatically matches 1% of your basic pay into your military Thrift Savings Plan account. If you contribute at least 5% of your military pay to either the Roth or Traditional TSP, the military will contribute another 5% into your Traditional TSP. This can be worth $1000s every year.

Is Roth TSP matched?

Yes! Roth TSP is matched. The match, however, will go into your Traditional TSP account. When you open a TSP, you have 2 accounts inside the TSP: A Traditional account and a Roth account. You can contribute to either one and receive up a 5% match from your employer monthly. However, whether you contribute to Trad or Roth, the match ALWAYS goes into the Traditional account.

What percentage should I put into the TSP?

At a minimum you should put in 5% into your TSP. If you are enlisted or below the rank of O-4 (major, lieutenant commander), you should probably contribute the 5% to your Roth TSP. As your income grows, you should eventually contribute the maximum $19,500 per year to your military TSP account, while still ensuring you get the 5% match every year.

Do I report Roth TSP on taxes?

You can if the tax form or software asks you to report it. However you have already paid tax on this money before it goes into your Roth. Therefore, it does not lower your taxable income in that year.

How do I maximize my TSP match?

To maximize your military TSP match you must contribute at least 5% of your pay every month from January to December. Therefore you do not want to max out your contribution earlier in the year. There is a chart on my site that will show you what percentage to contribute.

Does TSP limit include matching?

No, the standard TSP limit does not include matching. In 2020 you can contribute the full $19,500 and get matching on top of that, up to the “annual addition limit” of $57,000. The standard TSP limit is called the “elective deferral limit.”

14 thoughts on “Military TSP Match 2020: How much is the BRS match worth?”

  1. As far as contributing the maximum, do I need to consider how much that is being matched?

    Basically, what I am asking is can I personally contribute the full $19,500 (2020) or do I need to subtract the amount that the government will be matching so my account as a whole doesn’t go over the maximum for the year? So in theory, the annual contribution to my account would then be $19.5k + (5% of my Base Pay x 12).

    Reply
    • No, matching does not count against your elective deferral limit $19,500 in 2020. Matching is counted against the $57,000 annual addition limit. https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/contributionLimits.html

      For example, in 2019 the elective deferral limit was $19k and the annual addition limit $56k. (Note I rounded my contribution and matching numbers).

      I contributed $11,000 to my Traditional TSP account and $8000 to my Roth TSP account. That’s $19k I contributed. The automatic 1% matching was $750 and $2995. Total deposits in my TSP for 2019 were $22,745. Very short of the TSP annual addition limit.

      Great question!

      Reply
  2. Thank you for this website Spencer. I am an AF reservist and was debating on opting into the BRS. I do plan on staying in 20 years to get my 20 year letter.

    What do you think about opting in with the intent of completing 20 years in the reserves OR should I just stay with the pension?

    Also, I already am maxing out my Traditional TSP with my annual bonus, and my 457 via my civilian job. Do you recommend on maxing out the ROTH TSP before the Traditional TSP? I am in a high tax state (California), but I also make a lot living in San Francisco.

    Thank you in advance.

    Reply
    • If you’re going to stay in 20 years, do not opt in.

      If there is even the smallest change you won’t make 20 years, opt in. You will get the matching and you still get a pension after 20 years, it’s just reduced a bit (but you got the matching along the way to make up for the reduced pension).

      I opted in and here’s why.

      Reply
  3. 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
  4. 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
    • This is incorrect. You can contribute to either Roth or Traditional and receive the match. The matching contribution funds from the government will be deposited in your Traditional TSP.

      “Your Service Matching Contributions are based on the total amount of money
      (traditional and Roth) that you contribute each pay period. All Service contributions
      are deposited into your traditional balance.”

      Page 26 of this PDF: https://militarypay.defense.gov/Portals/3/Documents/BlendedRetirementDocuments/A%20Guide%20to%20the%20Uniformed%20Services%20BRS%20December%202017.pdf?ver=2017-12-18-140805-343

      Anecdotally, I have only contributed to Roth TSP this year and have received my full 5% match every month into my Trad account.

      Reply
      • This is still a terrible deal (BRS). They are “matching” however, it’s going into traditional account (which you pay the taxes on) so is it really a 5% match when you go withdraw? Probably closer to 1-1.5%. The big gotcha is that you sacrifice a .5% multiplier by switching to (B.S. Retirement System). If you are bad with numbers and want to simplify your decision. Ask yourself is this designed to benefit me or the U.S Government? The choice should be clear. I recommend stay on the legacy system because you don’t close any doors to Guard or Reserve and the money will be far greater than the “MATCHING”.

        Reply
        • The BRS is not a terrible deal for the majority of US servicemembers who do not make it to 20 years of service and earn the military pension. Plus, troops joining today don’t have a choice: The BRS is what you get.

          With an average investment strategy earning 7% return, the BRS value can match the legacy system. More importantly, the debate when many servicemembers had the opportunity to switch into the BRS came down to freedom and choices, not the total monetary value of the pension vs matching.

          Reply
  5. 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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