Don’t Lose Momentum When It Comes to Saving for Retirement

Compounding interest combined with investing in the Roth TSP can combine for a winning retirement strategy.

We have reached our final article in this series on financial lessons from the gridiron. We’ve got our game plan (Perfection not required), we’ve built our disciplines (so we can finish strong), and remember our final lesson? I believe additional investment makes all the difference.

Here’s another quote from Vince Lombardi: “When you’ve got the momentum in a football game, that is a time to keep going and get it into the end zone.” Money can have momentum too!

Is the dollar you save today worth just a dollar when you retire? No way. Compounding can make that dollar worth 10 times more (or more). Don’t want to take my word for it? Take a moment and go to and play around with that compound interest calculator.

It may be helpful to start with an initial balance of just $10,000 for 30 years at 10%. What do you get? Should be north of $170,000.

NOW, change the 30 to 35 years. (Additional investment can be TIME too.) Over $280,000 without adding one more dollar.

Now let’s have some fun. Add $43.34 per month (roughly 20 bucks a payday). Now it’s over $420,000.*

*This is a hypothetical example for illustration purposes only and does not represent an actual investment. Past performance may not be indicative of future results*

When it comes to building wealth, you must be in to win. I believe the longer you are in, the better. And the more times you add a little bit more? Boom. Momentum.

Additional Investment Makes a Big Difference

If you have a goal of retiring at or near the minimum retirement age (MRA), you need two words: EARLY and ADD. This is the bruising run game for your offense. For me, this would be beginning with a contribution to get the full match for TSP. That match is like a penalty against the defense in football. Take the extra yardage and play on the short field.

Start early, stay with it, and work it. Then in year 2, and every year thereafter, start adding more. For every raise, add a percentage or two. Then with every promotion, add a few more. Pretty soon you will be scoring on every possession.

Am I saying don’t enjoy life? That you need to sacrifice all entertainment and never buy a new iPhone? Absolutely not, but what I am saying is please look at this as an investment in the future you! Waiting to trade in the iPhone 8 that works perfectly fine is buying time to put more money into the future you want to create. (Trust me, I’ve got an old phone.)

When it comes to building a retirement fund, I believe you must RUN UP THE SCORE. Think millions.

Now for those of you at the head of the class who have already been maxing TSP for years… are you done? Not quite.

Football is a team game. With TSP, we’ve just been covering offense. There’s also defense (my specialty) and special teams. You’ve got to win as a team. What are these other parts? Outside savings and investments (for the fun stuff), adequate liability protection (yes, I mean insurance) in case things go wrong, and the secret weapon: Roth TSP.

Yes, now that I’ve talked you into maxing your TSP investments, it may be worth considering giving up the tax deduction today. Yes, I’m that football coach – the one that ends practice with sprints.

When you put money in ROTH TSP, you are adding more of your money. What do I mean by that? When you place money on a tax-deferred basis, some of that money should have been taxed that year. So, it needs to be taxed later. That means it wasn’t really your money. It was Uncle Sam’s. Not only that, but his part will also compound and get bigger too. If you put the max into Roth TSP, there is no component due to Uncle Sam. (I Promise I’ll do a follow-up on the power of Roth.)

And yes, coach still wants more. Once you’ve maxed Roth TSP, it’s time to consider non-qualified investing. That would be in a traditional non-retirement investment account. You can do this directly with fund companies like Fidelity or Vanguard***, or you can choose to have an advisory relationship with a planner. Either way, you can begin to build up additional assets in a capital gain tax setting.

Presently, capital gains taxes are lower than the higher marginal income tax rates. That means that you will have another silo of money that will be treated differently for tax purposes. This is tax diversification. I believe this will become more and more important as the years go by. (More on this later.)

Final Thoughts

My closing thought is this: although in football defense wins championships, I believe that in retirement and financial planning, a “total team effort” is required. I know I’ve thrown a lot at you in this series. Take your time and digest it. Then commit to applying these principles. If you do, I believe you will be hosting the “Retirement Bowl Trophy”. Do not douse me in Gatorade, please.

Until my next article.

**Any opinions are those of Wes Battle and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained in this material does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Past performance may not be indicative of future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

***Raymond James is not affiliated with and does not endorse the opinions or services of Fidelity Investments or The Vanguard Group. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment.

About the Author

Wes Battle CFP®, ChFEBC℠, AIF® proudly hails from a Fed family. Beginning with his grandfather, their service to the country reaches back 70 years. Wes brings a decade and a half of financial experience to his service to federal employees and works to treat them as family. You can reach Wes at