I was looking at this post on reddit that really suggests you first contribute to your company retirement up to only your point of matching first, then max out later. I thought what if you do have the money to max out your TSP? Right now the limit is $18K, I have not found any clarification if the new 5% match counts as separate to this $18K limit or if it is included. I assumed it is separate and recalculated everything with this spreadsheet: What about maxing $18K with matching?
The new spreadsheet compares TSP with matching and a $18K annual max out of contribution to TSP on top. Yes the match will boost your earnings, but it is not enough to counter the losses from the 20% pension pay cut unless its over 4.5% return. When you hit 70 years of age you won’t want to be invested in anything returning 4.5% such as S, I, C, Funds as you will shift assets into the F or G Funds to protect yourself from losses. If you were in the Lifecycle funds it would of automatically shift all stocks to bonds at this point.
The spreadsheet allows you to enter the interest at retirement as well as during active duty years. Best case scenario you make 7.2% your entire Active Duty time and shift to 2% G fund in retirement, you notice you will start loosing out by year 16 of retirement.
Conclusion, final nail in coffin, you need at least 4.5% return while working and in retirement still to make the new blended retirement worth it. I hope we can put this to bed once and for all, that the new plan is not worth it, not a slam dunk big money maker. It however gives you something if you plan on leaving the military before your 20 years.