Build Wealth in the Military (2026 Update): TSP Limits, Pay Raises, & Avoid Military Money Mistakes #209

Is 2026 the year you finally take control of your military finances? With a 3.8% pay raise, new TSP contribution limits of $24,500, and proven strategies that helped one E-7 reach $600,000 in net worth by year 14, Spencer and Jamie break down exactly how to build wealth while serving, even if you're starting from scratch or recovering from financial setbacks. In this episode, we provide a comprehensive 2026 financial reset for military families, covering everything from emergency funds and debt payoff to maxing tax-advantaged accounts and avoiding lifestyle creep. Perfect for anyone wanting to turn the new year into a fresh financial start. Main Discussion Points Know Where You Are Before You Start Track your spending using apps like Monarch Money, YNAB, Rocket Money, or simple spreadsheetFace your financial reality- write down all debt and net worth even if it's negativeGovernment shutdown proved why emergency funds matter: 3-6 months of expenses minimumExample: $500 car repair covered by emergency fund eliminated stress entirely Unique Military Financial Advantages Tax-free income: BAH, BAS, COLA not subject to federal income tax or payroll taxes (7%+ savings)State tax residency: Change to tax-free state (Texas, Florida, etc.) when stationed there! Spouse can too under Military Spouse Residency Relief ActTSP match: 5% automatic match after 2 years for BRS members. Don't leave free money on tableHealthcare and housing covered through Tricare and BAH/base housingExample: Saving $300/month by changing state residency adds up to thousands annually 2026 Numbers to Know TSP contribution limit: $24,500 (up from previous year)TSP annual additions limit: $72,000 (includes match and combat zone contributions)Roth IRA limit: $7,500 per person ($15,000 for married couples, even if spouse doesn't work)Military pay raise: 3.8% coming. Automate at least 1% of increase into TSPE6 with 8+ years gets roughly $150-180/month extra income from pay raise Priority Order for Tax-Advantaged Accounts Contribute 5% to TSP (get full government match for BRS members)Max Roth IRA: $7,500 for you, $7,500 for spouseGo back and max TSP at $24,500Only then consider taxable brokerage accounts Total to max everything: $49,500 for married couples Don't stress if you can't max—contributing 10-20% is still excellent and beats average American 5% savings rate Invest Simply Using LADS Method Low-cost, Automated, Diversified, SimpleTSP Lifecycle 2075 fund: 60% US stocks, 40% international, minimal bonds—perfect set-it-and-forget-it optionAlternative: 80% C Fund, 10% S Fund, 10% I FundDon't performance chase because last year's winner often becomes next year's loserBoring is beautiful in investing. Let it compound for 20 years Path to Military Millionaire Status E7 example: $500/month starting as E3, by age 45 = $1 million at 7% returnReal example from Reddit: E7 with 14 years, $600,000 saved, contributing $20-25k/yearIn 10 years that E7 will have $1.2 million just from money already contributed (before new contributions)Add military pension: $30k/year plus $40k from 4% rule = $70k annual income in retirementTime is your biggest asset. US stock market doubles roughly every 7-10 years Common Mistakes to Avoid in 2026 Not contributing to TSP at all (minimum 5%, goal 15%+)TSP loans for non-emergencies...change behavior insteadNew car trap: 7-year car loans becoming standard, shooting yourself in financial footLifestyle creep: Give half of pay raise to savings, half to lifestyle improvementsWaiting for "perfect time." Spoiler: there's never a perfect time. Start this weekend Capture Free Money Review LES monthly for accuracyFile paperwork for CZTE, hostile fire pay, family separation allowanceFollow up with finance multiple times if needed. Don't give up on money you're owedRequest corrected W2s if aircrew touching tax-free zones in Nov/DecSpencer recovered $20,000+ over career by being persistent with finance Take Action Now Schedule family money meeting. Make it a priority! Hire babysitter if needed, dedicate one hourWrite down all debt on paper: credit cards, student loans, auto loansAcknowledge it's overwhelming but necessary to move forwardResources: Dave Ramsey's Total Money Makeover or Ramit Sethi's I Will Teach You to Be Rich Resources & Links Budgetting and tracking: Monarch Money, YNAB (You Need A Budget), Rocket Money, Every DollarCredit card offers: Card Pointers Chrome pluginFree books: Libby app + MWR library on baseMilitary Money Manual by Spencer ReeseSelected as US Air Force Academy Class of 2023 graduating giftDave Ramsey's Total Money MakeoverRamit Sethi's I Will Teach You to Be Rich and Money for CouplesTSP match/max charts by rankThe Money Guy Show: Financial Order of Operations Spencer and Jamie offer one-on-one Military Money Mentor sessions. Get your personal military money and personal finance questions answered in a confidential coaching call. militarymoneymanual.com/mentor Over 20,000 military ...