Active Duty: Your Roth TSP Contributions May Stop Unless You Act

tspIf you are an active duty member of the Army, Air Force, or Navy making dollar-amount Roth contributions to your TSP account, these deductions will stop on January 31, 2015, unless you act.

How your election requirements will change:

An upcoming change in myPay will require you to designate your Roth contributions as a percentage of your pay, not a dollar amount. If you don’t comply with this change, then the Defense Finance and Accounting Service (DFAS) will not be able to process your Roth contributions. This change affects your Roth contributions only; your traditional contributions are already designated as a percentage of pay.

When the change will take place:

The new requirement will take effect January 1, 2015. You will have 30 days to change your Roth election from a dollar amount to a percentage of your pay. If your new Roth election is not received by January 31, 2015, then DFAS will not be able to process your Roth contributions until you update them.

How to make the change:

Log into myPay. You’ll see a special TSP section called “Traditional TSP and Roth TSP”—click there. Then, in the “Contribution from Roth TSP” section, you can enter the percentage of your pay that you’d like to contribute (10%, for example). Finally, click “Save” at the bottom of the screen.

The other way you can make the change is to submit the paper election form, TSP-U-1, available on www.tsp.gov to your finance office.

Source: http://www.dfas.mil/militarymembers/tspformilitary/tspac.html

4 Reasons to Contribute to the TSP – Despite Having a Military Pension

chamber_savingsThe Thrift Savings Plan (TSP) offers you the chance to save for additional retirement security at extremely low cost. But you may believe you don’t need to save for retirement because you’ll receive a pension after 20 years of service. Truth is, your military pension alone may not be enough.

Read the four reasons to contribute to the TSP in this article by Kisha A. Taylor at: http://www.militarysaves.org/blog/1214-4-reasons-to-contribute-to-the-tsp-despite-having-a-military-pension#sthash.I7efKH4c.dpuf

Roth TSP contributions to begin on May 7th

This week Thrift Savings Plan (TSP) announced that May 7, 2012 will be the day that the TSP will begin to accept Roth TSP contributions.

With the addition of the Roth TSP option, participants can choose to invest pre-tax or after-tax dollars in any of the TSP funds, up to the Internal Revenue Code limits (for 2012 the maximum amount that you can contribute to TSP is $17,000).  TSP participants can currently invest in ten different funds: the five Lifecycle (L) Funds, the Government Securities (G) Fund, and the four broadly diversified stock and bond funds – the Fixed Income Index Investment (F) Fund, the Common Stock Index Investment (C) Fund, the Small Capitalization Index Investment (S) Fund, the International Stock Index Investment (I) Fund.

Money already in your account when you begin making Roth contributions will remain part of your traditional balance.  You will not be able to convert it to Roth.

Please visit the TSP website (www.tsp.gov) for more information to help you decide if this new option will benefit you retirement planning.

Roth TSP Flyer – https://www.tsp.gov/PDF/formspubs/tsplf30.pdf
TSP Highlights – https://www.tsp.gov/PDF/formspubs/high12a.pdf