Part 3 on BRS: TSP Contributions Count

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The new Blended Retirement System (BRS) consists of 1% of base pay contribution to TSP and then 4% match of your TSP contribution. For those who don’t put anything into TSP, and get out exactly at 20 years should stick with the old retirement system. There will be no benefit for you to take a 20% pension cut just to get the 1% towards your TSP. Although its free money, you will never make up for the pay cut after 3 years of retirement if you do the 20 years. If you don’t do 20 years, sure why not switch, but you should consider maximizing your TSP in order to maximize the TSP match of 4%.

Old Pension New Pension Cumulative Yr Loss TSP Difference BSR Bonus Age
$4,772.20 $3,817.76 $11,453.28 $23,833.95 $12,380.67 57
$4,772.20 $3,817.76 $22,906.56 $24,811.14 $1,904.58 58
$4,772.20 $3,817.76 $34,359.84 $25,828.39 -$8,531.45 59
$4,772.20 $3,817.76 $45,813.12 $26,887.36 -$18,925.76 60
$4,772.20 $3,817.76 $57,266.40 $27,989.74 -$29,276.66 61
$4,772.20 $3,817.76 $68,719.68 $29,137.32 -$39,582.36 62
$4,772.20 $3,817.76 $80,172.96 $30,331.95 -$49,841.01 63
$4,772.20 $3,817.76 $91,626.24 $31,575.56 -$60,050.68 64
$4,772.20 $3,817.76 $103,079.52 $32,870.16 -$70,209.36 65
$4,772.20 $3,817.76 $114,532.80 $34,217.83 -$80,314.97 66
$4,772.20 $3,817.76 $125,986.08 $35,620.77 -$90,365.31 67
$4,772.20 $3,817.76 $137,439.36 $37,081.22 -$100,358.14 68
$4,772.20 $3,817.76 $148,892.64 $38,601.55 -$110,291.09 69
$4,772.20 $3,817.76 $160,345.92 $40,184.21 -$120,161.71 70

The TSP 1% free money quickly runs out after the third year of retirement. The data can be found here. This is assuming 4.1% return and quitting the navy right at 20 years.

-Derp

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