Category: Roth TSP
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
Leave a commentMar
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
Leave a commentJan
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
Leave a commentJul
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
Leave a commentJun
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
1 CommentJun
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
Leave a commentMay
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
Leave a commentApr
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
Leave a commentApr
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
Leave a commentMar
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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