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If you opted into the Blended Retirement System (BRS), you should start getting an automatic agency match of 1% and up to an additional 4% agency match. The matching should start the month after you opt in. For instance, I opted in Jan 5, 2018 and saw my first matching on my February LES. The BRS TSP match can be worth thousands if you maximize it correctly.
Previously I would contribute as much as I could to the Roth TSP so I could max it out early in the year, usually by August. Now with the BRS, that strategy is sub-optimal, because the BRS TSP match occurs monthly.
If you want to get your 5% every month AND maximize your contribution for the year, you must contribute enough of your pay so you contribute at least 5% every month until December.
If you go over a bit in December, the TSP computers should reject the contribution and limit you to what you are legally allowed to contribute, or they will credit the over contribution in the next calendar year.
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 ($18,500) 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 $18,500 in 2018. Divide by 12 months = $1541.67. Then divide $1541.67 by your monthly base pay to get a percentage of contribution.
For example, if your base pay is $5000/month, $1541.67/5000 = .3083 or 30.8%. Round up to 31% because you can only elect contributions in whole percentages.
If you contribute 31% of your $5000 base pay, you will deposit $1550 each month into the TSP, Roth or Traditional. Therefore, up until November you will contribute $17,050. In December, because you only have $1450 left of contributions, the TSP computers should only allow you to contribute $1450 and the remaining $100 will be returned in your paycheck. Now you have maximized your annual contribution and receive 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 to view full size or download the pdf: BRS-TSP-5%-match-maximize.
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.
How much is the BRS TSP match worth annually in 2018?
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. Again, click the image for a larger picture or download the PDF.
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.