Can someone explain TSP to me please?

Asking great questions. I wish I had gotten into it when I was a young soldier, but like you no one explained it to me. It's a type of 401k. I highly suggest getting with your base ACS finance counselor. There's a lot of benefits to the TSP that other investment opportunities don't have, but I don't want to give you dated or possible false information. Keep asking until you find someone that can explain it.

Go to this website. There is a number at the bottom for if you have questions. No better answers will come your way than from the SMEs

https://www.tsp.gov/

By profession I am a Financial Investment Professional, and Chartered Financial Analyst (CFA). Many details have already been shared here. I wont duplicate those.

The Army truncated it's previous retirement plan, and placed the responsibility of retirement planning square on your shoulders. The CON of course is you as an individual no longer have the modest pension payments the old timers will get. The PRO is if you decide the army isn't for you going forward you get to take with you your investment nest egg (poor retention planning on the Army's part if you ask me).

Negating all the fancy mumbo jumbo of investment planning the absolute MOST IMPORTANT factor in every single financial and investment planning formula is T-I-M-E!!!!!!!!!!!!!!!!!!!!!

To highlight this, all things being constant, what ever you save in your years of age 20 to age 30 will comprise 90% (NINETY) of what you retire with at the end of your savings horizon. MEANING !!!!!!!!!! If you saved every penny you could for the first 10 years of your career, and then straight up STOPPED at age 30 you will still retire with 90% of the total balance you would have if you continued 30 more years.

At the VERY LEAST save up to the matching amounts that the government will MATCH. Otherwise you are giving away money that is yours.

At the very MOST you should MAX OUT any tax sheltered investment options you have open to you before you should even bother diverting funds into any other kind of investment. LOWER YOUR TAXABLE INCOME as much as you can all the time.

I was young like you once. I was lucky. I worked in banking, and figured this out at 22. Saved every penny I could, and then was in a position to walk away from civilian life with my retirement nest egg secure. At 38 joined the USAR, and as long as I can keep a roof over my head don't have to worry about saving for anything, and just need to coast in life to retirement age.

TIME.

I canNOT express the importance of TIME!!!!!!!!!!!!!!! The dollar you save today will have 40 years to grow. The dollar you save next year will only have 39 years go grow, the next year you only have 38 years to grow, and so on. That dollar you saved in year 1 at 10% will be worth $45 at year 40.

So every dollar you fail to save NOW will need to be made up as much as 20-40 times just to equal out the lost opportunity from your past.

For everyone else still reading up to this point. I've set my kids up since birth, and give them $5K a year (taxes allow $15K) into mutual funds. Their starting investment horizon is SIXTY YEARS!!!!!!!!! At college age they can use it for college. If not they could buy a house. If not they could ride it out until retirement. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$