This post is part of the “Step-by-Step Guide to (Passive) Military Investing” series:
- Maximize your TSP matching
- Eliminate your consumer debts
- Start investing small (1%)
- Buy investments
- Increase your monthly contributions
- Diversify
- Keep buying and holding… don’t panic sell!
If you joined the military after 1 January 2018 and/or “opted in” to the Blended Retirement System (BRS), the government will nearly match your TSP contributions on up to 5% of your basic pay. If you contribute 5% of your basic pay into your TSP, the government will contribute another 4%.
If you aren’t maxing this out, do it now! This is a guaranteed 80% return on your investment… it’s free money! For example, if your 5% contribution is $500, the government would contribute $400. By putting in just $500, you now have $900 in your TSP. You’ve almost doubled your money. This is an absolute no-brainer, and should be every eliglble member’s first move towards financial freedom.
For veterans with other matching opportunities, like an employer’s 401K program, the idea is the same. This is instant, free money that you can earn right now for retirement. It is part of your compensation, so don’t leave this free money on the table.
If you haven’t done this yet, please ensure that you are investing enough each paycheck to get your matching contribution. To invest in the TSP, follow the guidelines on how to setup your MyPay and setup your TSP allocations immediately… then, continue to Step #2.
Return to the Step-by-Step Guide to (Passive) Military Investing” series