[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]Under the BRS or the Blended Retirement System, you will have your contributions to your government retirement fund – the Thrift Savings Plan, or TSP – matched by up to 5 percent of your pay. While it seems like the faster you put into the TSP, the more money you’ll make from the match back, that is not always so.
How Does the BRS and TSP Work Then?
Currently, the federal government will automatically put 1 percent of your pay into the TSP even if you haven’t opted to do so yourself. This is for anyone who joined the military after the 1st of January in 2018. You can get up to 5 percent back though, in matching funds, should you choose to contribute more.
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Real simple: if you make 1000 dollars, and put in 5 percent (which would be 50 dollars) the government will match that amount, making your contribution double to $100. Regardless if you choose to contribute more for yourself or not, the government will stop matching at that 5 percent mark.
Be that as it may, it still makes sense to put into the TSP as much money as you can. The maximum you’re allowed to contribute to the TSP in 2019 is $19,000.
Every payday, in addition to living expenses and retirement contributions, you still draw on your allowances with your check. Active service members can contribute bonus money to the Thrift Savings Plan too
But should you put all that extra money into the fund? Probably not.
Your TSP contributions will stop automatically if you hit that $19,000 benchmark before the year is up, and if you stop contributing, that means the 5 percent matching funds from the government will stop too. While the federal government will continue to put in the 1 percent automatic contribution as mentioned above, maxing out your contributions means missing out on some matching funds.
If you do have extra money, your TSP contributions should be pushed up to the monthly max, in order to maximize the amount you get matched back. For those deploying or getting a bonus, the smart move is to not put it all directly into retirement but dole it out slowly, in order to get the most free money back from the match fund.
For those in a combat zone, there are special provisions, and the TSP can take a contribution of more than the 19,000 dollars, up to 56,000 dollars. This increased amount is only valid for the Traditional TSP plan. The Roth TSP plan still maxes out at 19,000 dollars. Be advised, under these provisions, the 5 percent basic pay match back is still in effect regardless. Look into your finances before invest to make sure you get the biggest bang for your retirement bucks.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”36866″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
