TSP Enrollees Can Contribute $500 more in 2015

"...The Internal Revenue Service has increased the cap on annual individual contributions to employer-sponsored retirement savings plans, including the Thrift Savings Plan, to $18,000 for 2015.

The increase, which tracks changes in the cost-of-living index, is the first since 2013, when the cap rose to $17,500 from $17,000...

For military service members, the cap includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay and bonus pay, but does not apply to traditional contributions made from tax-exempt pay earned in a combat zone..."

Read more at GovExec.com

TSP: Traditional or Roth

"...On October 1, service members became eligible to take advantage of a Roth version of the Thrift Savings Plan, where money is deducted from taxed income, but becomes tax-free money when it is withdrawn.

According to TSP's external affairs director, Kim Weaver, there's a big difference between the two options.

"The biggest difference is that the traditional TSP is pre-taxed money, so it reduces the amount of your income in that year," she said. "So let's say your salary is..."

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Military Enrollment Spikes in TSP Roth

"...Enrollment in the Thrift Savings Plan’s fledgling Roth option spiked in December, especially among military service members. And the growing interest in the Roth option could lead to service members being automatically enrolled in TSP.

The Federal Retirement Thrift Investment Board, which manages TSP, said Monday that the number of military service members with Roth accounts nearly quadrupled in December, from 6,364 enrollees in November to 24,695 in December..."

Read more at Marine Corps News

Thrift Savings Plan: Traditional vs Roth

"...On October 1, service members became eligible to take advantage of a Roth version of the Thrift Savings Plan, where money is deducted from taxed income, but becomes tax-free money when it is withdrawn...

While most look at TSP as a roadmap to a comfortable retirement, Weaver said that enrolling in thrift savings, even for one or two enlistments, can pay real dividends.

"They can either leave it in their TSP untouched, move the money around within the funds or leave it in until they are ready to retire," Weaver said. "They can also roll it over into another 401k plan in the private sector if they choose to do that. So, just because service members leave the military, it doesn't mean they are forfeiting their money. Once they contribute their money, the TSP belongs to the participant." ."

Read more at af.mil

Investment Gain in TSP Roth Option

"...The number of Thrift Savings Plan participants with Roth accounts swelled to 51,354 in September, the board governing the plan said Monday.

That’s a 28 percent increase from the roughly 40,000 federal employees and Marines who had signed up for the new Roth option by the end of August, the option’s fourth month in existence. Those participants have so far deposited nearly $50 million in their Roth option, the Federal Retirement Thrift Investment Board said. That’s up 66 percent from nearly $30 million in Roth accounts in August..."

Read more at Marine Corps Times

The Roth TSP Retirement Savings Plan Option

"...The Thrift Savings Plan opened up a new savings plan, called Roth, for Air Force, Navy and Army members Oct. 1.

"TSP is basically a retirement plan that is available to active duty and certain Department of Defense civilians," said Airman 1st Class Saxon Hanwacker, 20th Comptroller Squadron special actions technician and a native of New York, "The traditional TSP basically allowed you to take tax deferred [which means you pay the taxes at a later time] and tax exempted funds and put them into a retirement plan which is tied to the stock market and government bonds in the investment world."

Roth is a new option for TSP users where their money is taxed up front instead of later like the traditional TSP does..."

Read more at DVIDS

TSP Roth Opens to All Active-duty Troops on Oct. 1

Beginning Oct. 1, 2012, active-duty members of the Army, Navy and Air Force will be able to contribute to the Roth Thrift Savings Plan as part of their investment planning, Defense Financing and Accounting Service officials said today.

The after-tax contributions will be electronically deducted from service members’ pay accounts.

Active-duty service members also can start their Roth TSP contributions now through their online MyPay accounts, which offer the fastest, easiest and most secure method to manage both Roth and traditional TSP contributions. The second option open to service members is to submit a TSP-U-1 form to their finance office.

Active-duty Marines, Guardsmen, reservists and civilians paid by DFAS were able to begin making contributions to the program in June, officials said.

Additionally, the other branches of the National Guard and reserves will be able to make Roth TSP contributions by mid- to late 2013.

The timeline difference between active-duty and other service members resulted from an interim solution for reserve component members, which didn’t meet Federal Retirement Thrift Investment Board requirements, according to DFAS.

While work continues for options that will be available more quickly and satisfy the law and FRTIB requirements at the same time, the new schedule will allow time to make systems changes and electronic deductions that meet all requirements. DFAS officials said.

To begin making Roth TSP contributions, service members should determine how much of their pay is eligible. A Roth TSP worksheet can help make the calculations.

Military members are required to contribute an amount equaling 1 percent of their eligible pay to begin TSP contributions. For those who are not participating in traditional TSP investments, the initial Roth TSP election must meet this 1 percent requirement. The IRS maximum contribution to Roth TSP is $17,000 per year, DFAS officials said.

Military members can use pay earned in combat zones, and are excluded from federal taxes to contribute to Roth TSP.

Source: Defense.gov