You know that your military paychecks are going up 3.4% beginning in January. Now’s a great time to add that to your TSP withholding if you’re not already maxed out. Because the increase comes out pre-tax, you’ll still see an increase in your January paycheck. Here’s how you do it.
1. Log into myPay. (Note: DFAS is updating all the account names to remove the Social Security numbers right now. You’ll have to create a log-in name and new password. A minor pain, but for a good cause.)
2. “Agree” to the terms. There’s a dialog box at the bottom of the first screen after you log in.
3. Select “TSP” from the options below “Taxes”
4. Under “Basic Pay” add 3.4% to your current contribution. (The maximum contribution for you is $16,500 in 2010.) Then select “Save”.
You’ll find a link in a previous blog to the percentage of your monthly check you need to save to max out your TSP.
Also, remember that you can also contribute $5,000 (or $10,000 if you’re married) to a ROTH individual retirement account. You’ll need to save $416.67/mo ($833.34/mo for a couple) in addition to your TSP withholding to max out your contributions.