Your TSP Review: What to Check and Why It Matters
Many service members set and forget their TSP. This is a quietly costly approach.
Most service members set up their Thrift Savings Plan at enrollment, choose a contribution rate, and move on. It makes sense. You're in-processing, there are a dozen other forms to fill out, and the TSP enrollment screen doesn't exactly invite deep reflection.
The problem is that "set it and forget it" is a fine approach for some things. For your retirement savings, it's quietly costly.
Your financial situation has almost certainly changed since you first enrolled. Your pay grade may have increased. Your family situation may have evolved. Your retirement timeline has gotten shorter. Your tax picture may look different. And yet for many service members, the TSP is running on settings that were chosen years ago, in a different season of life, often without a clear understanding of what those settings actually meant.
Here's what's important to understand: you can review and update your TSP at any time. There's no waiting period, no restricted enrollment window, no paperwork threshold to meet. Log into your account, make your changes, and they take effect. It's one of the most accessible financial tools available to anyone in uniform, and it deserves more attention than most service members give it.
Here is what to review, and why each item matters.
Your Contribution Rate
This is the most important item to examine, and the one most likely to have drifted out of alignment without anyone noticing.
When service members first enroll in the TSP, they often choose a contribution rate based on what they can comfortably afford at the time. Sometimes it’s the minimum required to capture the government match, sometimes it’s lower or sometimes it’s whatever the default was set to. That decision made sense in context. But pay increases, promotions, re-enlistment bonuses, and changing household expenses often make the original rate unnecessarily low years later.
The math on small contribution increases is more significant than most people realize. Increasing your contribution by even 1% of base pay and sustaining that increase over the remaining years of your career can meaningfully change your TSP balance at retirement. The earlier the increase happens, the more compounding time it has to work.
The 2026 contribution limits are:
Under age 50: $23,500
Age 50 and older: $31,000
Ages 60–63: $34,750 (SECURE 2.0 enhanced catch-up contribution)
Combat zone tax-exempt contributions: $70,000
If you are under the Blended Retirement System and currently contributing less than 5% of your base pay, this is the single most urgent fix available to you. The government's automatic 1% contribution plus the matching contribution of up to 4% equals a total potential government contribution of 5% — but only if you contribute at least 5% yourself. Every pay period you contribute less than that, you are leaving guaranteed money on the table.
Log into your MyPay account today, confirm your current contribution rate, and ask yourself honestly: does this rate still reflect where I am and where I want to be?
Reviewing your fund allocation helps ensure your contributions still make sense.
Your Fund Allocation
The second most important review item is where your contributions are going, and whether that allocation still makes sense for your situation and timeline.
The TSP offers six core investment options:
G Fund — Government securities. No risk of principal loss, but returns are low and historically do not keep pace with inflation over long time periods. This is the default fund for service members who never updated their allocation after enrollment.
F Fund — A bond index fund. Adds diversification and tends to perform differently from stock funds, though it is sensitive to interest rate changes.
C Fund — Tracks the S&P 500, an index of 500 of the largest U.S. companies. This is a core equity holding for long-term investors and has historically produced strong returns over multi-decade periods.
S Fund — Small and mid-cap U.S. stocks. Higher growth potential than the C Fund with more short-term price volatility.
I Fund — International stocks across developed markets outside the U.S. Provides geographic diversification.
L Funds — Lifecycle funds that automatically shift their allocation from more aggressive to more conservative as your target retirement date approaches. These are designed for investors who want a professionally balanced, hands-off approach without managing individual fund percentages.
The most common allocation mistake we see is a service member whose entire TSP balance has been sitting in the G Fund since enrollment because no one ever told them it was the default, and because the no-loss-of-principal feature provided a sense of safety that felt appropriate.
The G Fund serves a genuine purpose. But for a service member who is 10, 15, or 20 years from retirement, allocating entirely to the G Fund means prioritizing the avoidance of short-term volatility over long-term growth. That is a trade-off that quietly costs six figures or more over the course of a career.
Your allocation should reflect your actual retirement timeline, not your emotional response to market volatility. A 28-year-old with 17 years until retirement is in a fundamentally different position than a 47-year-old approaching separation. The fund allocation should reflect where you are and where you're going.
Review your current allocation and ask: does this match my timeline? If you're unsure where to start, the L Fund closest to your expected retirement year is a reasonable default that handles rebalancing automatically.
Your Roth vs. Traditional Election
Your choice between Roth TSP and Traditional TSP determines when you pay taxes on your contributions. It's a decision worth revisiting whenever your circumstances change.
Traditional TSP contributions are pre-tax. They reduce your taxable income today and are taxed when you withdraw them in retirement. This makes sense when you expect your tax rate in retirement to be lower than it is today.
Roth TSP contributions are post-tax. There's no immediate tax reduction, but withdrawals in retirement, including all the growth, are completely tax-free. This makes sense when you expect your tax rate in retirement to be higher than it is today.
The factors that drive this decision (your pay grade, your promotion timeline, your retirement income picture, your plans for an encore career, your state's tax treatment of military retirement income) change throughout a career. A choice that was right at enrollment may not be the right choice today.
Several life events are natural prompts to revisit the Roth vs. Traditional decision:
A significant promotion or pay increase
A change in plans about whether to serve a full 20 years
Clarity about what post-military income will look like
A change in marital status or family situation that affects your tax picture
One detail worth knowing: the Roth TSP has no income limits. The civilian Roth IRA phases out for higher earners above certain income thresholds. The Roth TSP imposes no such limit. It is available to every service member at every pay grade. This makes it one of the most broadly accessible tax-free savings vehicles in the military benefits package.
Changes to your Roth vs. Traditional election are prospective, meaning they apply to future contributions and do not change the tax treatment of money already in your account.
Your Beneficiary Designation
This is the most overlooked item on any TSP review, and potentially the one with the most significant consequences if it's out of date.
Your TSP beneficiary designation determines who inherits your account if you die. And here is the critical point that most people don't know: your TSP beneficiary designation supersedes your will. It does not matter what your will says. Whoever is named as your TSP beneficiary receives those funds regardless of any other estate planning documents you have in place.
TSP beneficiary designations do not update automatically when your life changes. If you named a parent when you were 22 and have since gotten married and had children, your parent may still be the beneficiary of record. If you went through a divorce and never updated the designation, your former spouse may still be listed. If you have never made a designation, federal law determines the order of distribution, which may not reflect your wishes.
Log into tsp.gov and check your current beneficiary designation. Confirm it reflects the people you actually want to receive those funds. Update it if it doesn't. This takes less than five minutes and is one of the most straightforward estate planning steps available to you.
If you’re with 3 years of separation, open season is a prompt to consider your TSP after you leave service.
What to Do With Your TSP After Separation
For service members within a few years of separation or retirement, a TSP review is also a natural prompt to begin thinking through what happens to the account after you leave service.
At separation, you have several options:
Leave it in the TSP. A completely valid choice. The TSP offers some of the lowest expense ratios of any retirement account in existence. You can no longer make contributions, but the account continues to grow. This is often the right choice for service members who are many years from retirement and don't need the broader investment options that an IRA provides.
Roll it over to a Traditional IRA. Opens up a wider range of investment options and provides more flexibility for distributions and estate planning. No tax event if done correctly via a direct rollover.
Roll it over to a Roth IRA. Preserves the tax-free status of Roth contributions and growth. Roth IRAs also have no required minimum distributions during the account owner's lifetime. This gives you an advantage over Roth TSP accounts.
Roll it into a new employer's 401(k). If you're transitioning to a federal civilian role or a civilian employer with a strong plan, consolidating accounts can simplify management.
Two rules that cannot be overstated: never mix Traditional and Roth in the same rollover. Doing this creates a taxable event. And always request a direct rollover. Never accept a check made out to you personally. A check in your hands starts a 60-day clock, and missing it triggers taxes and potential penalties.
If you made contributions from Combat Zone Tax Excluded pay, those funds require careful handling in any rollover to preserve their tax-free status. This is exactly the kind of detail that gets missed without professional guidance and exactly the kind of thing that's worth getting right.
The Bigger Picture
The TSP is one of the most powerful wealth-building tools available to anyone in uniform. Low fees, automatic contribution mechanics, government matching under BRS, and flexible investment options make it a genuinely excellent retirement account.
But like any tool, it only performs well when it's used intentionally. A TSP that hasn't been reviewed since enrollment is almost certainly not optimized — whether because the contribution rate is lower than it could be, the allocation doesn't match the timeline, the Roth vs. Traditional election was never revisited, or the beneficiary designation reflects a life that no longer exists.
The good news is that fixing any of these things is straightforward. You can log in and make changes today. There is no waiting period, no approval process, no friction beyond the login itself.
For a comprehensive guide to TSP strategy, pension decisions, Survivor Benefit Plan elections, and building lasting wealth after service, download our free Military Retirement Playbook.
