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In very general terms, @sjenkins, spreading the receipt over four years means that you'll potentially have lower income taxes over those years. You can do the math with your tax software or with a program like TaxCaster.

As an O-4 you're already on the ragged edge between making Roth TSP contributions or traditional TSP contributions-- and any bonus or specialty pay probably makes a traditional TSP contribution a lower income-tax choice.

If you direct the CP payments into your TSP (which is a challenge for every service's finance branch personnel) then you can avoid any annual income taxes from having the funds in a taxable brokerage account. Admittedly most brokerage taxable accounts can be pretty tax-efficient. And as you've pointed out, you already maximize your TSP contributions.

If you have any discretion over your timing of your Continuation Pay contract, if you sign it while deployed to a combat zone then you receive the installments as Combat Zone Tax-Exempt pay. (Even if you receive this over four years, the annual payments are still tax-exempt when you're no longer in the combat zone.) Since you're in a combat zone, you're also eligible for the higher Annual Additions Limit in TSP contributions ($70K in 2025). Contributions from CZTE pay can be withdrawn from the TSP any time after you leave the military by rolling your TSP account over to your IRA.

If you really want to dig into the numbers then you could contact a fee-only financial advisor who's a member of the Military Financial Advisors Association. They'll walk you through an hour of free Q&A-- and they can do the calculations for you at an hourly or project rate.