Retirement Planning
Military retirement planning has changed significantly with the introduction of the Blended Retirement System (BRS) in 2018. Under BRS, the DoD automatically contributes 1% of your base pay to TSP and matches up to an additional 4% of your contributions. Unlike the legacy system where you needed 20 years to receive any retirement benefit, BRS provides a portable retirement benefit through TSP matching from your very first day of service. Even if you serve only four years, you leave with a valuable retirement account. For those who serve 20 or more years, you still receive a defined pension benefit, though at a slightly reduced multiplier (2.0% vs 2.5% per year).
Good to know: The single most important thing you can do for your retirement is contribute at least 5% of your base pay to TSP from the start of your career. This ensures you receive the full government match. Every dollar you miss in matching is money left on the table. Even an E-1 contributing 5% builds significant wealth over a 4-year enlistment.