The Thrift Savings Plan (TSP) is a powerful retirement tool for service members, but did you know it can also be leveraged to build wealth through real estate investing? In this deep dive, we explore strategies for optimizing your TSP, rolling it into a Self-Directed IRA (SDIRA), and using it to raise capital for real estate deals.
Why Military Investors Should Reconsider the TSP
For many in the military, contributing to the TSP is an automatic decision. It offers tax advantages, employer matching (under BRS), and low fees. However, simply contributing isn’t enough—you need a clear strategy to make your money work harder.
Two common allocation strategies include:
✔️ 80/10/10 or 60/20/20 – These split investments across the C Fund (S&P 500), S Fund (small-cap stocks), and I Fund (international stocks) for diversified growth.
✔️ Avoiding the G Fund – While considered safe, this government bond fund offers minimal returns, making it a poor choice for long-term investors.
By optimizing fund allocation, you can maximize compound growth while keeping fees low—an important step before considering more advanced strategies like real estate investing.
Using the TSP to Invest in Real Estate
Many investors don’t realize that you can use TSP funds to invest in real estate—but it requires a rollover into a Self-Directed IRA (SDIRA) or Solo 401(k).
Here’s how it works:
✔️ Rolling Over After Separation – Once you leave active duty, you can roll over your TSP into an SDIRA or Solo 401(k), unlocking the ability to invest in real estate.
✔️ Funding Passive Investments – SDIRA funds can be used for syndications, turnkey rentals, or private lending, growing your portfolio without actively managing properties.
✔️ Tax Benefits Remain – Funds remain tax-deferred, just like the original TSP, meaning your investments grow without immediate tax liability.
Some investors even take out TSP loans to fund real estate deals, but this removes funds from compound growth, making it a less favorable option compared to an SDIRA rollover.
Capital Raising: Unlocking Trillions in Retirement Accounts
One of the most overlooked strategies for real estate investors is raising capital from other people’s retirement accounts. With over $13.2 trillion sitting in IRAs and 401(k)s, many investors have untapped capital that could be directed into real estate syndications, private lending, or joint ventures.
Here’s how to educate and approach potential investors:
✔️ Introduce SDIRAs – Many investors don’t realize they can use retirement funds for real estate. Helping them self-direct their IRAs creates win-win opportunities.
✔️ Showcase Passive Investing Benefits – Investing in syndications or private lending allows investors to earn consistent returns without the hassle of property management.
✔️ Leverage Trust & Relationships – By educating your network on these options, you can raise capital without traditional bank financing.
If you’re looking to explore SDIRAs or help investors unlock capital for deals, Nevada Corporate Headquarters (NCH) can walk you through the process.
Should You Keep Your TSP or Roll It Over?
This decision depends on your long-term financial goals. If you prefer a hands-off, traditional investment approach, the TSP is a safe and reliable option. However, if you want to accelerate your wealth through real estate, rolling your TSP into an SDIRA or Solo 401(k) may be a better fit.
The key takeaway? Your strategy matters more than diversification alone. By combining smart TSP management with real estate investing, you can create sustainable wealth beyond traditional retirement savings.
Ready to Take the Next Step?
✔️ If you’re interested in self-directing your TSP or IRA for real estate, check out NCH for expert guidance.
✔️ Want to invest in real estate but need capital? Learn how to raise money from retirement accounts and fund your next deal.
✔️ Looking for a military investor community? Join ADPI and connect with like-minded service members building wealth through real estate.
🚀 Start maximizing your TSP today—your financial future depends on it!
