[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]According to Henry Manning, operations officer for the assistant secretary of the Army for Manpower and Reserve Affairs, opting in to the Thrift Savings Plan is one of the wisest decisions that a soldier can make on a financial level.
Manning also said that while the TSP is similar to the well-known 401K civilian plans, the TSP is much better.
The TSP (like the 401K) is a way for income to be tax-deferred, Manning said. One of the great things about the TSP is that there are no management fees and it has maintained a strong record of performance over the years, unlike some other plans.
“Perhaps the biggest advantage of TSP is that the government will match a Soldier’s contribution, up to 5 percent,” Manning said.
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Manning also noted that the customization can be altered at any time without penalty.
“The drawback of not opting for TSP is that after separating from the Army, Soldiers will not have those retirement savings to fall back on and no money to show for their valued service,” he said.
Manning also shared that he has had a TSP account of his own for many years and he knows of other Army personnel that have also chosen to take advantage of their plans as well.[/vc_column_text][vc_custom_heading text=”Recommended Steps to Take” font_container=”tag:h2|font_size:20px|text_align:left|color:%23363636″ google_fonts=”font_family:Raleway%3A100%2C200%2C300%2Cregular%2C500%2C600%2C700%2C800%2C900|font_style:500%20bold%20regular%3A500%3Anormal” css=”.vc_custom_1535567924656{margin-bottom: 20px !important;}”][vc_column_text]Consulting with a financial counselor at Army Community Services is highly recommended by Manning. They can help Soldiers with their customization needs when it comes to where TSP funds are directed.
Beginning the process now is very important to quickly and efficiently take advantage of this. Manning emphasized that TSP enrollment is not automatic. Individual enrollment is required by each soldier and contribution percentage must be specified.
Soldiers who joined the Army January 1, 2018 (or after) can get government matched contributions after 60 days of service (of up to 1 percent). The government matched up to 5 percent of contributions after 2 years of service. Soldiers who joined the Army prior to this year can become eligible to get up to 5 percent matching as soon as they complete TSP enrollment.
Sgt. Laura Martin pulled up her MyPay account to show just how easy TSP enrollment is. Her account has a TSP option to select enrollment in either a traditional (tax-deferred) TSP or a Roth TSP (not tax-deferred). Martin’s husband is also a TSP enrolled soldier. She said they both took out an interest free TSP loan to pay cash for a home they wish to retire in.
The vast majority of soldiers do not stay in for 20 years, Manning concluded, meaning that they are unable to take advantage of a traditional retirement pension, which is exactly why TSP enrollment can be a very wise decision.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”25543″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
