Coach Holdren’s Game Plan for TSP Success
Every great team needs a solid game plan, and when it comes to your financial future, the Thrift Savings Plan (TSP) is your playbook for success. Whether you’re just starting your career or nearing retirement, the TSP offers you the tools to build wealth and achieve financial independence. But just like in soccer, success requires discipline, strategy, and consistent effort. Here’s the playbook to help you make the most of your TSP:
1. Collect the Full Match (Take the Free Kick)
If you joined the military after 1 January 2018, you’re under the Blended Retirement System (BRS). With BRS, the government matches up to 5% of your basic pay. This is like a free kick; an opportunity to score without any extra effort. All you have to do is contribute at least 5% of your pay to your TSP, and the government will match it dollar for dollar up to the first 3% and then 50 cents to the dollar for next 2%. So if you contribute up to 5%, the government will match it with 4%. That’s free money added to your retirement savings!
Missing out on the match is like letting a free kick sail over the goal. It’s a wasted opportunity. So, make it your first priority to contribute enough to collect the full match. This simple habit ensures you’re not leaving money on the table and gives your financial team an early lead.
2. Max Out Your Contributions (Take the Shot)
Once you’ve secured the match, it’s time to go on the offensive and maximize your contributions. For 2025, you can contribute up to $22,500 annually to your TSP. If you’re
50 or older, you can contribute even more; up to $30,000 with catch-up contributions. If you’re between age 60-64, you can contribute up to $34,750 thanks to additional catch-up allowances.
Think of this as taking the shot when you’re in scoring position. The more you contribute, the greater your chances of hitting your financial goals. Maxing out your contributions not only accelerates your savings but also takes full advantage of the TSP’s tax benefits.
3. Choose Your Investment Strategy (Pick Your Formation)
Every great soccer team needs the right formation to adapt to the game. The same goes for your TSP investments. You have two main options:
- Option 1: Lifecycle (L) Funds: These are like having a coach on the sidelines who adjusts your formation automatically as the game progresses. L Funds are target-date funds that adjust your investment mix based on your expected retirement date. They start aggressive (more stocks) and gradually become conservative (more bonds) as you near retirement. This is a great option if you prefer a hands-off approach.
- Option 2: Custom Allocation: If you like calling the shots, you can create your own investment mix. Here’s a winning formation:
- 60-90% in Stock-Related Funds:
- C Fund (Common Stock Index Fund): Your big forward, representing large U.S. companies.
- S Fund (Small-Cap Stock Index Fund): The agile winger, representing smaller U.S. companies.
- I Fund (International Stock Index Fund): The international midfielder, covering global markets.
- 10-40% in Government Bonds:
- G Fund (Government Securities): Your goalkeeper, providing stability and security.
- 60-90% in Stock-Related Funds:
Pick the strategy that works best for you but remember: the key to success is sticking to your formation and not making emotional changes when the market gets bumpy.
4. Automate Your Contributions (Practice Consistently)
In soccer, consistent practice is what separates good teams from great ones. The same is true for your finances. Automating your TSP contributions is like showing up to practice every day. It builds discipline and ensures you’re always improving.
Set up automatic payroll deductions so that a portion of your paycheck goes directly into your TSP account. This habit eliminates the temptation to spend that money elsewhere and keeps you on track toward your goals. Automation is your secret weapon. It ensures you’re always contributing, even when life gets busy.
The Competitive Edge: Disciplined Habits + Compounding = Victory
Here’s the real magic: when you combine disciplined habits with the power of compounding, you give your financial team the ultimate competitive edge. Compounding is like your team’s endurance; it gets stronger the longer you stay in the game. Every dollar you invest generates earnings, and those earnings generate even more earnings over time.
For example, if you start contributing early and consistently, your TSP account will have decades to grow. By the time you reach retirement, compounding will have done most of the heavy lifting. And if the game goes into overtime, whether that’s an unexpected expense or a longer retirement, you’ll have the financial stamina to stay in the game and come out on top.
Why the TSP is Your MVP (Most Valuable Player)
Every great team has an MVP; a player who consistently delivers results and helps the team win. For military personnel and government employees, the Thrift Savings Plan (TSP)
is your financial MVP. It’s reliable, efficient, and built to help you achieve long-term success. But just like any MVP, the TSP can only perform at its best if you use it wisely and maintain disciplined habits. Let’s break down why the TSP deserves the title of Most Valuable Player in your financial game plan:
1. Low Fees: Keep More of What You Earn
In soccer, you want your team to play efficiently, minimizing mistakes and wasted energy. The TSP operates the same way, it’s one of the most cost-effective retirement plans available. With some of the lowest expense ratios in the industry (as low as 0.05%), the TSP ensures that more of your money stays invested and working for you.
Think of high fees in other investment plans as unnecessary penalties. They chip away at your progress and make it harder to win. With the TSP, you avoid those penalties, giving you a clear path to financial success.
2. Tax Advantages: Play Smart with Your Contributions
In soccer, strategy is everything. You need to know when to pass, when to shoot, and how to position yourself for the best outcome. The TSP gives you strategic options with its
Traditional and Roth contribution plans:
- Traditional TSP (Pre-Tax Contributions): You contribute before taxes are taken out, reducing your taxable income now. You’ll pay taxes when you withdraw the money in retirement. This is a great option if you expect to be in a lower tax bracket later in life.
- Roth TSP (Post-Tax Contributions): You contribute after taxes are taken out, meaning your withdrawals in retirement (including earnings) are tax-free. This is ideal if you expect to be in a higher tax bracket in the future.
Choosing the right strategy is like picking the best formation for your team—it depends on your current situation and long-term goals. Either way, the TSP gives you the flexibility to play smart and optimize your tax strategy.
Final Whistle: Stay in the Game
Winning in soccer—and in finance—isn’t about flashy moves or quick wins. It’s about
discipline, strategy, and patience. The teams that succeed are the ones that build solid habits, stick to their game plan, stay focused, and play the full 90 minutes. The same is true for your financial journey. By following Coach’s simple rules: spend less, invest the difference, avoid debt, and give it time. You can build a solid foundation and set yourself up for a big win in the game of financial independence.
The Thrift Savings Plan (TSP) is your star player, but even the best players need a disciplined team to support them. It’s up to you to pass the ball (your money), take the shot (invest consistently), and stay in the game for the long haul. Automate your contributions to make saving and investing effortless and trust the power of compounding to do the heavy lifting over time.
But here’s the key: discipline is the glue that holds your strategy together. Just like a soccer team practices daily to build muscle memory and consistency, you need to develop and maintain disciplined financial habits. These habits; like budgeting, automating contributions, and avoiding unnecessary debt; are what keep you on track, even when life gets busy or the market gets bumpy. Without discipline, even the best strategy can fall apart.
Want to see your timeline? Use Coach Holdren’s Simple Economic Model Calculator and plug in your numbers. Link: S.E.M. Calculator – Simpli-FI.money