All Branch Topic (ABT) I'm sad about the Thrift Savings Plan

[Rlow04]

I just found out about the Thrift Savings Plan yesterday and I got all excited because I thought we got matching contributions as active duty military. Now I've read that the matching is only for civilian federal employees. Can anyone confirm this?

---

Members don't see this ad.

 

[IlDestriero]

Yep. But it is tax advantaged savings.
It's better than nothing for those not planning a career. I maxed mine out and it's done quite well.

 

[nvk89]

I'm seeing that the military is piloting matching contributions for some services, and I'm not sure if it's different from when this post came up a couple years back. The below links refer to pilot programs very briefly (and based on their wording, it doesn't seem docs will fall into this category of matching funds - however, I'm hoping we might since we end up on the losing end of hundreds of thousands of dollars in the long run [quoted from white coat investor, not just my opinion] for most specialties to have the privilege to serve our country)
http://www.military.com/benefits/military-pay/thrift-savings-plan.html
https://www.tsp.gov/PDF/formspubs/tspbk08.pdf

Is any active duty doc out there able to get matching contributions? I'm wondering this since I'm a brand new resident on active duty.

Any response to update this topic would be greatly appreciated, thanks!

 

[vellnueve]

I'm seeing that the military is piloting matching contributions for some services, and I'm not sure if it's different from when this post came up a couple years back. The below links refer to pilot programs very briefly (and based on their wording, it doesn't seem docs will fall into this category of matching funds - however, I'm hoping we might since we end up on the losing end of hundreds of thousands of dollars in the long run [quoted from white coat investor, not just my opinion] for most specialties to have the privilege to serve our country)
http://www.military.com/benefits/military-pay/thrift-savings-plan.html
https://www.tsp.gov/PDF/formspubs/tspbk08.pdf

Is any active duty doc out there able to get matching contributions? I'm wondering this since I'm a brand new resident on active duty.

Any response to update this topic would be greatly appreciated, thanks!

No.

 

[Hedgy]

I doubt you will see matching contributions. Retirement is already guaranteed, and with funding issues, that last thing they will do is put more money into the retirement program. There have been talks of them revamping the entire retirement system and going straight to a 401k type retirement.

 

[coolslugs]

I just found out about the Thrift Savings Plan yesterday and I got all excited because I thought we got matching contributions as active duty military. Now I've read that the matching is only for civilian federal employees. Can anyone confirm this?

That is correct.

 

[krmower]

The military has talked about reforming retirment and getting rid of the pension and going to a 401k-type plan where they would match funds. This would be less beneficial for those planning on staying in for 20+ yrs (in my opinion). Nothing has been decided on and it is still being looked at. At the current time the military TSP consists of pre-tax dollars that you put in up to a max of around $17,500-$18k/yr. I have done it every year maxing it out most years and it is doing nicely.

 

[Incis0r]

The military has talked about reforming retirment and getting rid of the pension and going to a 401k-type plan where they would match funds. This would be less beneficial for those planning on staying in for 20+ yrs (in my opinion). Nothing has been decided on and it is still being looked at. At the current time the military TSP consists of pre-tax dollars that you put in up to a max of around $17,500-$18k/yr. I have done it every year maxing it out most years and it is doing nicely.

Borderline speculation here, but if one is already enrolled in Dental School under the HPSP at the time when the changes come through, do you have a guess on whether that student would be grandfathered in under the old plan?

 

[CraigHack]

Borderline speculation here, but if one is already enrolled in Dental School under the HPSP at the time when the changes come through, do you have a guess on whether that student would be grandfathered in under the old plan?

Guidance on those types of situations would likely be written into the new order outlining the changes. However, I would be surprised if HPSP players were not grandfathered in under the current system (which I don't see changing for a while, if ever).

The military struggles with retention, especially in the low density fields (such as health care), so removing the pension system would likely cause an exodus of dentists (even more so than the branches currently experience). The pension system works well with obligated service because if you're on the hook for X years, and then you're only Y years away from a pension after that obligation, it's a lot easier to ride it out than get out and get nothing. You see it a lot with Navy/USMC pilots, since they are on the hook for 8 years after they are winged (so about 2-3 years into their career). By the time they can get out, they're over halfway to a pension.

If we go to a 401k style format, then there's no incentive to stick around after your obligated service period. You'll retain the dregs of your manpower pool, along with a few individuals that are truly dedicated to service, but you'll leave a manpower gap that is a mile wide. This is all speculation/personal experience on my part.

 

[Incis0r]

Guidance on those types of situations would likely be written into the new order outlining the changes. However, I would be surprised if HPSP players were not grandfathered in under the current system (which I don't see changing for a while, if ever).

The military struggles with retention, especially in the low density fields (such as health care), so removing the pension system would likely cause an exodus of dentists (even more so than the branches currently experience). The pension system works well with obligated service because if you're on the hook for X years, and then you're only Y years away from a pension after that obligation, it's a lot easier to ride it out than get out and get nothing. You see it a lot with Navy/USMC pilots, since they are on the hook for 8 years after they are winged (so about 2-3 years into their career). By the time they can get out, they're over halfway to a pension.

If we go to a 401k style format, then there's no incentive to stick around after your obligated service period. You'll retain the dregs of your manpower pool, along with a few individuals that are truly dedicated to service, but you'll leave a manpower gap that is a mile wide. This is all speculation/personal experience on my part.

Thank you for the comment.
Another question that deviates slightly from the thread: Is the government good for the pension? I mean, what happens if there's a government shutdown, or a populist party comes to power and they cancel all pensions?

 

[CraigHack]

Thank you for the comment.
Another question that deviates slightly from the thread: Is the government good for the pension? I mean, what happens if there's a government shutdown and they cancel all pensions?

Well, that one's a bit above me. I would say it's safe to assume that in the event of a gov't shutdown, pensions would be back paid if interrupted. When we were going through sequestration, the civilian federal employees were getting unpaid time off because the gov't couldn't force them to come into work and couldn't guarantee their pay, but by the end of the party they all got back pay for those days. It was business as usual for the uniformed personnel, and I don't recall my pay ever being interrupted. I could see a scenario where pensions would be frozen if things got bad enough, but I don't think we'd ever burn retirees' pensions.

 

[vellnueve]

Thank you for the comment.
Another question that deviates slightly from the thread: Is the government good for the pension? I mean, what happens if there's a government shutdown, or a populist party comes to power and they cancel all pensions?

Can't "cancel" all pensions without an act of Congress. No party is that suicidal.