Should You Contribute to Your TSP or 401(k) Without an Employer Match?

Employer matching contributions are one of the most valuable benefits available to retirement savers, essentially free money added to your account for every dollar you contribute up to a certain limit. But what happens when your employer reduces or eliminates that match? Is it still worth contributing to a 401(k) or Thrift Savings Plan without the match?

The short answer is yes. In most cases, contributing to a 401(k) or TSP without an employer match is still a smart financial decision. Here is why.

What Is a 401(k) Employer Match?

401(k) accounts were introduced in 1980, and employer matching programs have since become one of the most common employee benefits. The concept is straightforward: an employer contributes a set amount for every dollar an employee puts into the account, up to a specified limit.

Every company offers a different matching amount and a matching limit. Some companies offer no matching at all, while others match 50 cents for every dollar contributed. According to surveys of employer retirement plans, most companies with matching programs contribute an average of 4% to 6% of an employee’s salary. Any employer match is valuable, but getting close to the industry average is generally considered a good benefit.

For military members under the Blended Retirement System, the government matches TSP contributions of up to 5% of base pay, making it one of the most generous matching programs available to any worker. Military members enrolled in BRS should always contribute at least 5% to capture the full match before considering any other investment.

Should You Contribute to a 401(k) or TSP Without an Employer Match?

In most cases, yes. Here are the key benefits of continuing contributions even without a match:

Automatic and Guaranteed Savings

Contributions are made automatically with each paycheck, removing the temptation to spend the money and ensuring consistent investing without requiring any manual action.

Lower Taxable Income

Traditional 401(k) and TSP contributions reduce your taxable income in the year you contribute, since the money is invested before it is taxed. This can meaningfully reduce your annual tax bill, particularly for those in higher tax brackets.

Tax-Deferred Growth

Money invested in a Traditional 401(k) or TSP grows without the annual tax drag that affects taxable investments. You pay taxes only when you withdraw in retirement, and potentially at a lower rate if your tax bracket is lower then than it is now.

Important Factors to Consider Before Stopping 401(k) Contributions

Expenses and Fees

Many 401(k) plans have higher fees than comparable funds available in an IRA. If your 401(k) has high expense ratios or limited low-cost investment options, it may be more cost-effective to invest in an IRA after capturing any available employer match.

The TSP is a notable exception, with expense ratios as low as 0.025%, the TSP has among the lowest investment costs of any retirement plan available anywhere. Military members and federal employees have a significant cost advantage by staying in the TSP.

Investing in a 401(k) vs. IRA

If your 401(k) has high fees or limited options, consider investing in an IRA instead. IRAs are available at most major financial institutions, including Vanguard, Fidelity, and Charles Schwab, and offer a wider range of low-cost investment options. Not sure whether to prioritize your TSP or IRA? See our dedicated guide on whether to invest in the TSP or IRA first for a detailed breakdown.

The two main types of IRAs are:

• Traditional IRA — contributions may be tax-deductible depending on your income and whether you participate in a workplace retirement plan. Growth is tax-deferred, and withdrawals are taxed in retirement.

• Roth IRA — contributions are made with after-tax dollars, but growth and qualified withdrawals are tax-free. For most military members in lower tax brackets, the Roth IRA is an especially powerful tool.

For a detailed comparison, see our guide on choosing between a Roth IRA and a Traditional IRA.

Contribution Limits and Income Phase-Outs

For 2026, you can contribute up to $24,500 to a 401(k) or TSP or up to $32,500 if you are age 50 or older. IRA contributions are limited to $7,500 per person or $8,600 if you are age 50 or older. For a complete breakdown of all 2026 retirement plan contribution limits, see our 2026 retirement plan contribution limits guide.

If you are covered by a workplace retirement plan, your ability to deduct Traditional IRA contributions phases out based on income. For 2026, the deduction phase-out range for single filers covered by a workplace plan is $81,000 to $91,000. For married couples filing jointly where both spouses are covered, the phase-out range is $129,000 to $149,000.

If your income exceeds these limits and you cannot deduct Traditional IRA contributions, consider a Roth IRA if your income is below the Roth phase-out thresholds or a non-deductible Traditional IRA contribution as part of a backdoor Roth conversion strategy.

Alternatives to a 401(k) or TSP

If you have maxed out your 401(k) or TSP and are looking for additional ways to invest, here are two strong options:

Invest in a Roth IRA

The Roth IRA has become one of the most popular retirement savings vehicles because of its tax-free growth and withdrawal flexibility. Unlike a Traditional IRA or 401(k), contributions are made with after-tax dollars, meaning qualified withdrawals in retirement are completely tax-free. For military members who can contribute tax-free combat zone pay to a Roth IRA, this advantage is even more powerful.

You can open a Roth IRA at most major brokerages, including Vanguard, Fidelity, and Charles Schwab. See our complete Roth IRA guide for more details on eligibility, contribution limits, and investment options.

Invest in Real Estate

Real estate can provide strong returns and a steady income stream, but the capital requirements and management responsibilities have historically limited access for many individual investors. Platforms like Fundrise have emerged to give individual investors access to commercial real estate through Real Estate Investment Trusts without requiring a large upfront investment.

However, investors should be aware that Fundrise suspended its Equity REIT redemption plan in 2025 following the commercial real estate downturn, making it best suited for long-term investors who do not need immediate liquidity. For investors seeking real estate exposure with greater liquidity, publicly traded REIT ETFs are another option worth considering.

Why You Should Keep Investing Even Without an Employer Match

Just because you are no longer receiving matching contributions does not mean you should stop investing. The tax advantages of 401(k), TSP, and IRA contributions remain, and those advantages compound significantly over time.

The reality is that most American workers do not have nearly enough saved for the retirement they want. Maximizing your available tax-advantaged accounts, even without a match, is one of the most impactful steps you can take toward financial security in retirement.

The order of operations for most investors should be:

• Contribute enough to your 401(k) or TSP to capture the full employer or government match

• Max out a Roth IRA if eligible

• Return to your 401(k) or TSP and contribute up to the annual limit

• Consider an HSA if you have an HDHP-eligible health plan

• Explore taxable investing or other alternatives after maximizing tax-advantaged accounts