Make Sure You Snatch the Blended Retirement System Match

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Here’s a tip from one of my favorite blogs and authors, Jonathan Clements from Humble Dollar:

SNATCH THE MATCH. Are you on track to contribute enough to your 401(k) to get this year’s full matching employer contribution? If not, crank up your contribution now, so you can spread the required sum over this year’s remaining paychecks. In 2020, the maximum 401(k) contribution is $19,500, or $26,000 if you’re age 50 or older.

For nearly my entire career this wasn’t an issue for those in the military, but it is now due to the new Blended Retirement System (BRS) and its matching Thrift Savings Plan (TSP) contributions. To refresh your memory, if you contribute 5% of your pay to the TSP you get up to a 5% match. If you are in the BRS and you don’t contribute at least 5% every month, you are leaving free money on the table:

Screen Shot 2020-01-01 at 6.36.41 PM

Also, you want to make sure you don’t fill up your TSP too early. While many service members will find it hard to get to the 2020 annual limit of $19,500, for those that do they want to space it out over the whole year. If you fill up your TSP in October and can no longer contribute for November or December, you won’t a get a match that month and will lose out on that money.

While I’m not in the BRS, I do a few things with my TSP contributions that I’d recommend everyone do:

  1. Contribute from your basic pay and not from bonuses or other variable or one-time pays. Your basic pay is the most consistent so use that.
  2. Spread it out over the whole year. For 2020, I’m contributing about $1625/month so that I come in just at the $19,500 limit in December.
  3. I see how much of my TSP is left after the November LES is released, and adjust December to get as close to the limit as possible.

2 thoughts on “Make Sure You Snatch the Blended Retirement System Match

    Robyn Treadwell said:
    January 5, 2020 at 08:10

    Sorry. I dropped my phone and it sent the unfinished message.

    I’ve been maximizing my TSP and you don’t need to worry about resetting in November because it will automatically take out just enough to reach the annual limit.

    I used to do as you did and reset but then I missed the cutoff one year and it reached the max automatically which was much better than me getting close but not exactly the max. So now I set it in Jan and it maxes out in Dec each year.

    Have a great day.


    Sent from my iPhone


      Joel Schofer, MD, MBA, CPE responded:
      January 5, 2020 at 10:39

      Well that’s good to hear. One year I didn’t adjust and I got screwed out of my DEC contribution, so perhaps they changed it to the way it should have been all along.


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