The cost of TSP for an E-3 with 4 years in.

[rickc]

Hello everyone, I'm a DoD civillian and a HUGE believer in putting in to the TSP.


I work with 5-6 airmen who plan on doing 20 and don't currently contribute to their TSP.

I know when I up'ed my TSP 2% after my last pay raise, it only cost me 30$ less a pay peroid, yet I gained over 130$ extra in retirement due to it lowering my taxable income, and the TSP matching.

does anyone know off chance how much REAL money (that is how much less ) an E-3's paycheck would be if they were to contibute 2%??


Thanks in advance, I hope to talk them into saving for their future if it makes sence on paper

[delist1987]

i attached an excel file you can use to calculate your net pay. its pretty self explanatory, use your last LES to fill in the blue boxes.

i didn't make this file, someone at my job did, but it works like a charm

[rickc]

Nice, I'll just have them plug their pay into the NSPS right?

Thanks again.

[delist1987]

correct. or you can just use the grade series drop down box if you're paid on a gs schedule. hope that helps

[Beetle023]

I downloaded the "Net Pay Calculator" and tried to open it up but it doesn't open. I tried to play with different programs and it still isn't opening up. Any ideas? Thanks in advance

~Bryan

[joeholcor]

Sir,

I'm not sure about the increased value but I can tell you that TSP has the lowest management fees in the entire mutual fund industry. I served 26 years in the military and I can tell you nothing beats TSP when it comes to cost. Vanguard Mutual Funds may come a close second but TSP wins out everytime. Your young enlisted members are only hurting themselves by not contributing to TSP, mainly for the tax advantage - TSP with its pre-tax advantage is something that helps them regulate their tax contributions while at the same time contributing to their retirement. If they choose not to participate in TSP I would tell them to look into an IRA either Traditional or Roth, which ever is best for their own situation - but they should be doing something...time is ticking and you don't get back.

[romad2003]

joeholcor is absolutely correct. In addition, for newer members of the military with lower salaries, they can use contributions to the TSP and/or an IRA (Traditional or ROTH) to get a qualified retirement savings credit on their taxes (Form 8880). Your can get back up to 50% (if I remember correctly) of what you contribute up to $2,000 (i.e. $1,000 credit) or what you owe in taxes. I never paid a cent in federal taxes my first 3 years in and had my tax liability greatly reduced until I made too much over the limit to be qualified any more.