Start Early. Invest Wisely. Retire Strong.
Start early and begin saving for retirement now. Even though it may feel like a long way off, retirement can be expensive – and it’ll come quick.
Social Security benefits will likely offset some retirement costs but are unlikely to provide the retirement lifestyle you want. Consider your health and lifespan, too, which might extend past 100 years. Set retirement goals, make a plan to meet them, and invest wisely to offset inflation.
Blended Retirement System (BRS)
BRS combines four separate retirement components:
- Defined Benefit. Monthly payments after at least 20 years of service
- Defined Contribution. DoD’s contribution to your TSP account, from 1% to 5% of your base pay, depending on what you contribute to it
- Continuation Pay. A one-time bonus offered mid-career in exchange for an additional service commitment
- Lump Sum. An optional one-time payment at retirement in exchange for a reduced monthly defined benefit payment
Pro Tip: If you're in BRS, contribute at least 5% to your TSP to get the full government match.
Legacy Retirement System (High-3 Pension)
The Legacy Retirement System has only one component, the Defined Benefit, which provides a monthly payment based on your highest three years of basic pay.
- For those who entered service before 2018 and did not opt into BRS
- Monthly retirement pay = (2.5% x years of service) x (average of highest 3 years of base pay)
The Thrift Savings Plan (TSP): Your Key to a Secure Future
The TSP is a retirement savings and investment plan available for all service members and federal employees. Why Invest in the TSP?
Tax Benefits. Choose Traditional TSP (which delays paying taxes until later) or Roth TSP (which requires paying taxes now, but features tax-free withdrawals in retirement)
Low Fees. TSP features low investment fees compared to civilian 401(k) plans
Automatic Contributions. Set up payroll deductions to grow your savings over time
Money’s Increasing Value Over Time. The sooner you start, the more your money grows due to compound interest
Tax Benefits
Choose Traditional TSP (which delays paying taxes until later) or Roth TSP (which requires paying taxes now, but features tax-free withdrawals in retirement)
Low Fees
TSP features low investment fees compared to civilian 401(k) plans
Automatic Contributions
Set up payroll deductions to grow your savings over time
Money’s Increasing Value Over Time
The sooner you start, the more your money grows due to compound interest
Smart Investing: Growing Your Wealth
Investing helps your money grow over time. TSP offers multiple options:
- G Fund. Ensure preservation of capital and generate returns above those of short-term U.S. Treasury securities
- F Fund. Match the performance of the Bloomberg U.S. Aggregate Bond Index
- C Fund. Match the performance of the S&P 500 Index
- S Fund. Match the performance of the Dow Jones U.S. Completion Total Stock Market Index
- I Fund. Match the performance of the MSCI ACWI IMI ex USA ex China ex Hong Kong Index
- TSP Lifecycle Funds (L Funds). Choose between eleven Lifecycle Funds for the diversified mix of the five individual funds (G, F, C, S, and I) that is right for you
A Financial Readiness Specialist can assist you in making informed decisions about your retirement planning and provide guidance on any of the options below
- Individual Retirement Accounts (IRAs). Open a Roth IRA or Traditional IRA for extra savings
- Survivor Benefit Plan (SBP). Provide your Family financial security after you die
- Social Security Benefits. Supplement your military pension in retirement
Getting Help: Free Financial Planning Support
Making smart choices now can set you up for a comfortable future. With the Financial Readiness Program, get:
- One-on-one financial counseling
- Retirement planning workshops
- TSP and investment education
