I contribute 25% of my base pay to my TSP, which is manageable for me. Is anyone really maxing out TSP at lower enlisted ranks? Seems like I would have next to nothing left over. Thoughts?
Is it realistic to be able to max out your TSP as an E4?
byu/jbb1393 inMilitaryFinance
Posted by jbb1393
7 Comments
Courtesy of /u/AFmoneyguy who posts these every year:
https://www.reddit.com/r/MilitaryFinance/s/YEDh8VDx5m
You are correct that it takes most of your base pay. The important thing is to start early even if it’s a small amount. You have years of contributions ahead of you and it’s important to start good habits now and let compound interest do its thing:
https://www.uidaho.edu/-/media/uidaho-responsive/files/financial-aid/forms/beams/infographics/pdfs/a-tale-of-two-savers.pdf?rev=6a20a46d5b0d4d628ca11fb07936b6a5
There’s a nice chart /u/AFmoneyguy wrote up
https://www.reddit.com/r/MilitaryFinance/comments/185isgd/max_tsp_2024_23000_get_full_5_brs_match/
It is possible especially if you live like a complete miser but for enjoyment of life I highly recommend not doing so lol. While saving and investing for retirement is good, it’s not worth missing out on life events and things you could be doing in your 20s, shit even going out and getting blasted with the boys once in a while is something that is excusable. 25% now is already going to pay dividends in your 60s. You can always invest more in the future but you can never turn back time.
https://www.troweprice.com/personal-investing/resources/insights/youre-age-35-50-or-60-how-much-should-you-have-by-now.html
Go by the chart and aim for that, you have a while to save for half your income by 30, even if you plan on staying in for 20 I would still follow that chart for recommendation on how much you want to save.
If you can rest well knowing with promotion and TIS increases you’ll get to reduce the amount you contribute. Great job! 👏
It’s hard to max it out tbh. I tried doing it as a lance and it was rough because you pretty much don’t have a life. First time I maxed it out was when I commissioned
I speedrun E5 and then max it, took me 2 years. Also even at E4 I put in 60% of my base pay into tsp which is almost max but not quite there and then just live off my bah + bas. Its doable.
Its possible, but for most people it isn’t realistic. Me personally, I could max it out but I don’t want to have that much money not readily available until I’m 60. I invest about 80% of my checks(E-4), about 30% split between tsp and Roth IRA and than the other 50% into a taxable brokerage account. I will max out Roth IRA, but not tsp. I might put more into tsp, and less into TBA. This usually leaves me with $250 left over each check. I don’t have any bills, I don’t have car and don’t plan on getting one until I’m out. So its either used to pay credit cards, or whatever really. Savings, food, fun, etc… suffer now, enjoy later type of mindset.
It’s definitely possible, but I believe that most people nowadays just aren’t able to live more frugally/below their means.
Sure if you max out you’ll be way ahead but if you contribute 25-35% + the 5% match you’ll still be loaded and ahead lol.
Save yourself some money to do things you want to do. Focus on promoting and then raise up that %. Sounds like youre doing great.