For the first time, the Department of Defense will be offering uniformed servicemembers an automatic 1% contribution to their Thrift Savings Plan account and a percentage of matching contributions after two years of service.
Beginning on January 1, 2018 all servicemembers beginning active duty and those who opt to switch to the new Blended Retirement System (BRS) will receive a 1% contribution and up to 5% match from the Department of Defense, after 60 days of service. This is free money! Let me explain how to take full advantage of this free money.
If you are enrolled in the new Blended Retirement System you will be auto-enrolled into the Thrift Savings Plan at your own cost of 3% of your base pay. After 60 days of service the DoD will begin the 1% contribution as well. Then on day 1 of your 3rd year of service, the DoD will match up to 4% more in contributions. The chart below shows how the match will work. To take full advantage of the free money – you will have to contribute 5% of your base pay. With that, your total contribution will be 10%. Of course, that will top out your “free money” matching funds, but you don’t have to stop there! Consider checking the TSP contribution limits in 2018 and put as much away as you can!
Note: All the charts and information above are subject to change as the FY2017 National Defense Authorization Act continues to be discussed in Congress.