Here is the best part of making these TSP contributions while deployed: the contributions will be classified as tax exempt contributions, which means the contributions themselves won’t be taxed when withdrawn at retirement age (though earnings on those contributions will be taxed). We recently covered this topic here: Understanding Tax Exempt TSP Contributions and Withdrawals.

And we covered additional investing topics for deployed military members here: Best Investment Options for Deployed Military Members.

Holy cow man! Great freakin’ blog! You hit it right on head with the benefits of the TSP. With the tax exempt zones (as when you are forward deployed in a combat zone), you can top out at $49,000….and that is PER YEAR! So think about it, if you are able to do it (that is put $49k away per eligible year…. and I completely understand that this is a ton of money to put away, which not many people can do), and you “straddle” two years on your deployment (say from November to May), then you can throw in $49k on each of those years! That is almost $100k over two years, which would set you up for the rest of your life, no matter what age you are. But obviously, the younger the better, giving time for compound interest to set in. I can’t wait to browse the rest of your blog for other great stuff. Keep it up my man!

Under current guidelines, the $30,000 may be used to contribute, in an amount not to exceed $15,500 for the annual deferred contribution, and up to $45,000 for the annual tax exempt contribution, to the Thrift Savings Plan (TSP) for the military. Of course, the Soldier must be a member of TSP and contributing from basic pay at the time of payment, and have designated a contribution percentage for any bonus payment, in order to contribute the desired portion of the Career Status Bonus to TSP. The Soldier should make sure that the bonus percentage is established in the M0 entry on the pay account BEFORE the date the Career Status Bonus is paid. ~ http://www.dfas.mil/army2/bonuses/redux.html

So the answer appears to be yes. However, since you are two years out, it would be worth looking into a little closer to execution time to be sure the rules are still the same. I would also recommend meeting with a financial planner who understands this system before making the decision (tips on How to Interview a Financial Planner). You may be better off taking the money and investing it, or you may be better off foregoing it and taking the higher retirement pay.

Best of luck and thanks for your service!