An article on a Blended Retirement System quirk

[FDNYOldGuy]

Hey, guys and gals. First, a disclaimer: I'm not (yet) in the military and just a long shot old guy trying to get a Reserves/Guard UPT slot, so I am not posting this from the inside. That said, I am a big fan of the financial world/retirement options and, in my travels researching squadrons and poking around their pages for info today, I randomly stumbled across this article that could be important to some folks. 

It basically says, if you're one of the fortunate ones that can max out your TSP at $18,500 and you're in the BRS with a match program, you want to make sure you're spreading the $18,500 in contributions out over the ENTIRE year and not maxing out early. According to the article, Uncle Sam is only matching 4% PER PAY PERIOD and, if you max out early, you'll be missing out on the government's match for each pay period after you max out until the end of the year. So, the government would be paying MORE of the $18,500 if you ensured you didn't max out too early, as opposed to the individual paying more of the $18,500 because the government caps at 4% per pay period.

Here is the article about the BRS match that goes much further in depth. It is a recent article that I didn't see listed here yet or discussed in the other BRS thread, so I figured it may be of some help here. My apologies if I'm speaking out of turn because I'm not in yet/dealing with the BRS personally, but I thought it might be valuable to some here. 

[nsplayr]

My employer's 401(k) works the same way...they match per pay period so you have to actually contribute each pay period, i.e. don't max out early. From what I understand that is pretty common, is it not?

Overall - recommend this get moved to one of the BRS or other retirement threads.

Edited May 5, 2018 by nsplayr

[brwwg&b]

2, my understanding is the same as nsplayr mentions

This is one way in which the BRS is lacking (/advantage goes to the government). Especially given that the airman may want to adjust monthly contributions in order to maximize yearly investment in response to deployment / tax free areas, based on either attempting to maximize tax exempt input into TSP, or utilizing the ability to invest above and beyond the annual elective deferral limit. In each of those instances, you will miss out on government matching vs. if you had spread the contributions over all pay periods of the year. 

Caveat : I am not a finance wizard

[Stoker]

It's worth noting that the $18,500 limit is for your contributions, not overall contributions. So you can contribute $18,500 over the course of the year, and still get whatever match you're due from the gov't (provided you are contributing at least 5% per paycheck).