Max Your TSP in 2014

Again this year Yourmilitarymoney has calculated the percentage of base pay you’ll need to allocate to the Thrift Savings Plan to max out your annual contribution. In 2014 you can save $17,500 plus a catch-up provision of an additional $5,500 if you are over the age of 50. In addition, if you serve in a combat zone you can save up to $52,000, a great option if you are able to save a significant amount while deployed.

The table is simple to use. Just find your grade and years of service. You base pay (rounded to the next whole dollar) appears, and to the right of it is the percentage of that pay you’ll need to contribute each month to reach $17,500.

A few points to consider:

• A great starting point is to contribute 15% of your base pay to the TSP. While you might not max out the TSP, you’ll go a long way toward reaching a reasonable retirement savings goal.
• Since the government doesn’t match TSP contributions (YET) you might decide to contribute to a Roth IRA first, up to the IRS limit of $5,500, or $6,500 if aged 50 or older.
• Contributions to the Traditional TSP are tax deferred. Lower income military members may decide to pay taxes on the contributions when they are made, and take advantage of the ROTH TSP. (More on this on future articles.)