Here are two tips for investing in the Thrift Savings Plan (TSP) that frequently trip up beginners and not-so-beginners:
- Strive to always base your TSP contribution off of your basic pay because it is the most stable and predictable pay you have. If you prefer to contribute from bonuses (or some other type of pay) you can, but realize that they tend to be less predictable. During my career I’ve seen the Navy’s pay structure changed and my special pays get hosed up due to the variable timing of the special pay NAVADMIN release. If I would have been contributing to the TSP from my bonuses, my TSP contributions would have been screwed up. TSP contributions from base pay, though, wouldn’t have missed a beat because my basic pay stayed the same.
- If you are in the Blended Retirement System (BRS), make sure you don’t fill your TSP early. If you fill it in September, you won’t get a match for the rest of the year. You have to contribute each month to get the monthly match.