A written playbook for your pension, TSP and second paycheck is what military retirement planning at Edgepoint Wealth Management produces, built for service members leaving with a pension and starting a new career. The work runs about 12 months around separation, because that's where the fixed deadlines sit: the SBP election has to be made before the retirement date, and the TSP and the new employer's 401(k) share one $24,500 deferral limit for 2026.
Most people come to this after the simple version stops working. Retired pay arrives from DFAS, the TSP sits with its own board, a contractor offers a 401(k) with a match, a spouse has a 403(b), and a teenager is two years from a tuition bill. Each office handles its own piece. Nobody adds them up.
This isn't for you yet if separation is more than 2 years away; at that point your contribution choices matter more than this work does. It also doesn't prepare tax returns or draft wills, since a CPA and an estate attorney do those. Have your retired pay estimate nearby before reading on.
Retiring at age 44 leaves 31 years before RMDs
Say Curtis (hypothetical) retires from the Air Force at age 44. Required minimum distributions, the forced income draws from tax-deferred accounts, start at age 75 for anyone born in 1960 or later, so the gap is 31 years. The work covers that gap: a pension of about $3,300 a month ($39,600 a year, taxed as ordinary income), the TSP, his wife Joanne's 403(b), the contractor 401(k), college money for 2 teenagers, and a Social Security claiming age between 62 and 70. Edgepoint Wealth Management sets the order of income draws before it touches a single fund choice.
How much does one pension choice move the rest of your return?
One pension choice touches three other decisions. SBP premiums come out of retired pay before tax, so the coverage level changes your taxable pension income (the choice itself belongs to the SBP page). Claiming Social Security at age 62 instead of 67 cuts the benefit by 30 percent for life, according to the SSA.
And beneficiary forms on the TSP, the 401(k) and the 403(b) override your will, so Edgepoint Wealth Management checks they match your estate documents. It all goes on one income sheet in the playbook.
How much does waiting until the first tuition bill cost?
Pulling $40,000 from the TSP at age 47 for a first tuition bill costs $12,800: a $4,000 early-distribution penalty plus about $8,800 of federal tax at an assumed 22 percent rate. Only $27,200 reaches the school, because the IRS higher-education exception covers IRAs, not plan money.
Wait, and the TSP is your only big pot. A 529 started now saves federal tax on growth for qualified costs; a traditional 401(k) deferral only moves the tax to later income draws. Some states add a 529 deduction, so check your state's rules.
What age rules and deadlines shape military retirement planning?
One $24,500 deferral limit (the IRS figure for 2026, under age 50) covers every TSP, 401(k) and 403(b) deferral you make in a calendar year, and the limit belongs to you, not to each plan. Excess deferrals have to come out by April 15 after the tax year. Other rules then switch on at ages 55, 59½, 62, 65 and 75.
Take Curtis (hypothetical), age 44. He defers $20,000 to his traditional TSP before his last day in uniform in August. His contractor job starts in September at $10,000 a month, and he elects 30 percent to the new 401(k): 4 months × $3,000 = $12,000. Total deferrals: $20,000 + $12,000 = $32,000, which is $7,500 over the limit. Neither payroll flags it. If the $7,500 comes back by the April 15 deadline, it's taxed once, in the year deferred. Miss the deadline and it's taxed that year and again when drawn out later. At an assumed 22 percent rate, that's $1,650 paid twice. Joanne has her own separate limit, so her 403(b) doesn't count here.
Many plans want notice earlier than April 15, so check the plan's own date. Edgepoint Wealth Management adds up the year-to-date TSP figure on the last LES (the Leave and Earnings Statement) and compares it with the first contractor pay stub, so the election gets cut before the limit is passed.
Find age 55 in the table first: the penalty exception only covers a plan left at age 55 or older, so a TSP left at age 44 waits until age 59½. Age 65 then brings Part B for TRICARE For Life, and Medicare sets IRMAA surcharges from income 2 years earlier.
Some moves save tax and some only shift it. Traditional deferrals push the tax into later income draws, and Roth pays it now. A 529 can save it outright. An HSA is closed to Curtis while he keeps TRICARE coverage, even if the contractor offers a high-deductible plan. And invested college and TSP money can fall in value, sometimes for years.
Where one limit catches two paychecks
Ages that switch rules on
If you will defer pay into more than one plan in your separation year, add the year-to-date TSP total from your last LES to your new 401(k) election. Stop the new election once the combined total reaches $24,500 for 2026, or $32,500 if you are age 50 or older.
| Age | What switches on | Tax move to make |
|---|---|---|
| Age 44 (separation) | Pension starts, ordinary income | Set withholding; one $24,500 deferral limit |
| Age 55 | Penalty exception for plans left at 55+ | TSP left at 44 doesn't qualify |
| Age 59½ | 10% early-distribution penalty ends | Income draws from TSP, IRAs |
| Age 62 | Earliest Social Security, 30% smaller | Compare with claiming at 67 |
| Age 65 | Part B needed for TRICARE For Life | Watch income 2 years earlier |
| Age 75 | RMDs begin | Roth moves earlier shrink them |
Your first conversation with Edgepoint Wealth Management starts with the pension estimate
Before the first conversation, gather the retired pay estimate, the SBP election status, your last LES, the latest TSP statement, the contractor offer letter with its 401(k) match terms, your spouse's 403(b) statement and the most recent tax return. Have the separation date ready too. Missing one item won't stop us, but the pension number is the one we can't skip.
We meet by phone or video, and it doesn't matter which state you live in. You'll need at least $500K in investable assets to work with us. The client agreement lists every fee, and we bill only what's on that list. Edgepoint Wealth Management serves 372,000 clients and $8.3 billion in client assets as of 10/12/2026.
To reach us, send your details through the online request form; we don't publish a phone number. TSP rollover decisions and tax planning for veterans are covered on separate pages, and this work links to them where the topics overlap. You'll first get the income sheet and a deadline list for your separation year.
What to bring
How the conversation runs
Neither payroll flags it: $32,000 deferred, $7,500 over the limit, $1,650 paid twice if the deadline passes.
Common questions on military retirement planning
Is a 529 or a TSP draw cheaper for our teenagers' college after I retire at 44?
A 529 is usually cheaper. A $40,000 TSP draw at age 47 costs about $12,800 in penalty and federal tax at an assumed 22 percent rate, leaving $27,200 for school. A 529 pays qualified costs without federal tax on growth. Invested money can fall in value, and some states add a deduction, so check yours.
My defense contractor matches 401(k) contributions from day one; should I stop TSP deferrals before my last month in uniform?
Often yes, in part. The IRS deferral limit for 2026 is $24,500 across the TSP and the new 401(k) combined. Add your year-to-date TSP total from your last LES to the new election, and stop once you reach the limit. Take the match only up to that combined number.
Why pay anyone for retirement planning when DFAS, the TSP and our CPA each handle their own piece?
Each of them sees only its own piece. None sees the combined deferral limit, the order of income draws or whether beneficiary forms match your estate documents. Edgepoint Wealth Management puts it on one income sheet. It isn't worth it if separation is over 2 years away, and it doesn't replace a CPA or estate attorney.
Can my wife max her 403(b) in the same year I max the TSP and my new 401(k)?
Yes. Each spouse gets a separate IRS deferral limit of $24,500 for 2026. Joanne's 403(b) counts only against her limit, not against your TSP and 401(k) total. Her plan may set extra rules, so check them. Your TSP and 401(k) deferrals together still can't exceed your single limit.
Can I put money in an HSA at my new job if I keep TRICARE as a retiree?
Generally no. The IRS bars HSA contributions when you have other health coverage that isn't a qualifying high-deductible plan, and TRICARE isn't one. A high-deductible option at the contractor doesn't change that while you keep TRICARE. Check the current IRS rules and your coverage before contributing.
Primary sources
This material is general information only and does not constitute individual investment, tax, or legal advice. Investing involves risk, including the possible loss of principal. Before making any decision, talk to a financial professional, tax advisor, or attorney about your specific situation.