Welcome to TSP Strategies

Welcome to TSPstrategies.com! This Web site is dedicated to exploring the benefits of saving and investing in the Thrift Savings Plan.

The companion book, TSP Investing Strategies: Building Wealth While Working for Uncle Sam, lays out a simple set of strategies for long-term, buy-and-hold investors to consider while investing in the TSP. This Web site and accompanying blog will build on those concepts, while focusing on new investing options and developments related to the TSP.

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Category: Roth TSP

Aug


31

Roth TSP Accounts One Year Later

The Roth TSP option is about one year old now, and the option has become a surprisingly popular one. While the Roth TSP became operational in May last year, participants were able to invest in Roth TSP accounts in stages last summer and into the fall based on their department or branch of service. From nothing in May 2012, total Roth TSP assets have grown to over $468.3 million one year later, at the end of June 2013. The total number … more

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Apr


21

Et Tu, Brute? The Very Real Legislative Challenges to Tax-Preferred Treatment of TSP Accounts

A budget proposal earlier this month raised the possibility of limiting the total amount that can be saved in TSP accounts, along with other tax-preferred accounts such as Individual Retirement Accounts (IRAs) and Health Savings Accounts (HSAs). One of the original, guiding principles of tax-preferred accounts such as the TSP (and including others such as 401(k)s, 403(b)s, and IRAs) is that workers should have the ability to save and invest some of their wages in ways in which wages are … more

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Mar


05

Number of Roth TSP Participants, Investments Grow Steadily

The number of TSP participants contributing to the Roth TSP – first available to federal workers in May 2012 – grew to 101,000 at the end of 2012, according to official TSP statistics. There were over 4.6 million TSP participants as of the end of 2012.  TSP participants contributing to Roth TSP accounts therefore represented about 2.4% of the overall participation rate. In total, Roth TSP accounts held $129.6 million at the end of December. The average Roth TSP fund … more

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Jan


22

Will You Convert Your Regular TSP Holdings to the Roth TSP?

This is purely a hypothetical question right now, but TSP administrators announced earlier this month that they will study the steps necessary to implement an option that would allow participants to convert their current regular TSP holdings into a Roth TSP account, after paying the required taxes to do so.  The announcement read: “The President approved the American Taxpayer Relief Act of 2012, on January 2, 2013. This law allows the TSP and other qualified plans to give participants the … more

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Jul


08

DoD Civilians Eligible To Contribute To Roth TSP Accounts This Month

The Defense Finance Accounting Services (DFAS) is now processing requests to enroll in the Roth TSP.  The new enrollment is open primarily to civilian personnel covered by DFAS, and many DoD and service components began to inform their civilian employees of the enrollment eligibility in late June (a Navy notice can be accessed here, while an Air Force notice can be accessed here, for example).  Personnel serving in the Coast Guard were able to begin to enroll in the Roth … more

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Jun


09

First Roth TSP Contributions

Just over a month has elapsed since Thrift Savings Plan administrators implemented the Roth TSP.  For those who signed up for the Roth TSP as of the week of May 7th, the first biweekly contributions to the Roth TSP would have been made the week of May 28th. Unfortunately, TSP participants in other agencies and the uniformed services have been unable to participate.  Thus it is too early to discuss statistics in any meaningful way, since participation in the Roth … more

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Jun


06

TSP Annuity Rates: How Low Will They Go?

Thrift Savings Plan administrators recently announced that the interest rate for annuities purchased in June will be 2.125%.  This interest rate is unchanged since February, when it dropped from 2.150%.  This is an astoundingly low interest rate for an annuity, and it is a result of incredibly low interest rates since 2008. These rates appear to be headed even lower in the coming months.  With the continuing political turmoil in Europe and precarious debt burdens throughout the developed world, yield … more

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May


08

TSP Now Allows Roth TSP Contributions…for Some

Many federal government agencies began taking requests from employees to switch their future contributions to Roth TSP accounts this week. Unfortunately, some TSP participants – especially those in defense-related work – have to wait until as late as October to begin Roth TSP.  The Defense Finance and Accounting Service announced on April 13 that Defense employees would have to wait until October in some cases to switch their personal contributions to the Roth TSP.  The DFAS announcement came a day … more

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Apr


11

TSP Administrators Announce Implementation Date for Roth TSP

TSP administrators announced that the implementation date for the Roth TSP will be May 7, when government “agencies and services can begin accepting elections for Roth (after-tax) contributions at that time.”  The updated TSP Election Forms were a clue that the implementation date would come in May. Note that not all government offices are ready to implement the Roth TSP option.  According to the press release, TSP administrators are “aware that not all agencies or services have completed the technical … more

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Apr


11

After the Roth TSP, a ‘Mutual Fund Window’?

While the Roth TSP has received the lion’s share of attention since the June 2009 enactment of the “Thrift Savings Plan Enhancement Act,” the legislation also empowered the Federal Retirement Thrift Investment Board (FRTIB) to allow a “mutual fund window” if “the Board determines that such addition would be in the best interests of participants.” A mutual fund window would allow TSP participants to invest some of their contributions in mutual funds outside the ten already offered in the TSP.  … more

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Mar


30

TSP Updates Election Forms with Roth TSP Option

Thrift Savings Plan administrators recently released advance copies of updated TSP-1 and TSP-1-C election forms to reflect the new Roth TSP option. You can see the advance copies below. Note that the forms are dated “5/2012” (bottom right corner), reflecting the expected launch date of the Roth TSP option in the second quarter of this year. See “TSP Now Allows Roth TSP Contributions” for an update on the implementation of the Roth TSP.

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Mar


26

Have You Seen the Roth TSP Posters?

Thrift Savings Plan administrators last month sent out details regarding posters to advertise the coming TSP Roth option, slated for the second quarter this year.  The posters were prepared for “America Saves Week,” February 19-26, with a big “Coming Soon – A New Way to Save, the Roth TSP” headline. Have you seen them hanging anywhere?  I must admit, I did not see any in February, and I have not seen any since “America Saves Week” (although I did see … more

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Mar


23

The New Roth TSP Option

Most of us have by now received mailings and leaflets highlighting the coming Roth TSP option for TSP contributions.  Unlike the other TSP funds, this is not a different type of stock or bond fund, but rather a different choice in how your current contributions to the TSP are taxed, which will determine if your withdrawals are taxed or not after you turn 59 ½.  Here are some highlights: –   If you choose to contribute to the Roth TSP, … more

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