MilitarySpot.com

Serving the U.S. Army, Navy, Air Force, Marines, Coast Guard and National Guard

Online Schools
| Find Jobs
Follow MilitarySpot:
 
  • Home
  • Enlist
    • Join The Army
    • Join The Navy
    • Join The Air Force
    • Join The Marines
    • Join The Coast Guard
    • Join The National Guard
    • ASVAB
    • Army Physical Fitness Test
    • Military Draft
    • Prior Service Army Enlistment
  • Career
    • Join the Military
    • Jobs for Military and Civilians
    • Career Center
    • Prior Service Army Enlistment
    • Criminal Justice
  • Education
    • Online Schools
    • Spouse Education Benefits
    • GI Bill
    • Military Schools
    • Criminal Justice
  • Benefits
    • Army Benefits
    • Navy Benefits
    • Air Force Benefits
    • Marine Corps Benefits
    • National Guard Benefits
    • Coast Guard Benefits
    • 2012 Basic Pay Rates
    • Allowances
    • Special & Incentive Pay
    • Military Spouse Education Benefits
    • VA Education Benefits
    • GI Bill
  • News
    • Headline News
    • Army News
    • Marines News
    • Airforce News
  • Finance
    • Debt Relief
    • Military Pay Rates
    • Military Personal Loans
    • VA Loans
    • Military Star Card
    • Military MyPay
  • Spouses
    • School Finder
    • Scholarships & Grants
    • PCS, DITY, & Moving
    • Pay Rates
    • MyCAA
    • Education Benefits
  • Community
    • Military Games
    • Military Reunions
    • Classifieds
    • Photo Gallery
    • Buddy Finder
    • MilitarySpot Pinups
    • Military Bases
  • Resources
    • Military Alphabet
    • Military Reunions
    • Military Acronyms
    • Currency Converter
    • Military Tools
    • Ranks
    • Military Time
    • Military Tactics
    • Military Discounts
    • Military Games
    • Military Videos
    • Photo Gallery
    • Infographics
    • How To
  • Travel

Don’t Miss the Roth TSP Deadline

‎01-19-2015 07:00 AM
Content provided courtesy of USAA.

by Tim Kiesow, CFP®, ChFC®

If you’re in the active-duty Army, Navy or Air Force and contributing to a Roth TSP account, here’s a worthwhile New Year’s resolution: Do a little paperwork in January so you can keep putting away money for retirement.

Contact a Recruiter!

These service branches will change Roth Thrift Savings Plan payroll deductions from a specific dollar amount per pay period to a percentage of pay. Affected soldiers, sailors and airmen must switch to a percentage between January 1 and January 31, 2015. Those who miss that deadline will see their Roth TSP deductions stop until they make a payroll election.

The Army, Navy and Air Force already use the percentage deduction method for traditional TSP accounts, so this change brings the Roth TSP into alignment. Navy reservists who serve more than 30 days on active duty are also affected by this change. Marines and Coast Guard personnel are not affected — their Roth and traditional TSPs were previously switched to percentages.

Here are the basics for making your election online: On your myPay page under “Traditional TSP and Roth TSP,” click on “Contribution to Roth TSP” and enter your pay percentage, then hit “Save.” You also can make your election on paper using the TSP Election Form (Form TSP-U-1). There is a 1% minimum Roth TSP deduction from basic pay to be eligible to make contributions from incentive or special pay.

USAA Mutual Funds

While the paperwork may be a bit of a pain, it also presents an opportunity to review your current payroll deductions and make sure you are saving enough to reach your retirement goals. You should revisit your retirement elections and beneficiaries at least once a year anyway, so you also can do that while taking care of the Roth TSP choice.

Do you have Prior Military Service? The NAVY Wants You!

We recommend enlisted personnel and officers consider saving at least 10-15% of basic pay for retirement. For junior enlisted, this works out to roughly $200-$300 per month. For an E-6 with more than six years of service, the monthly deduction would be $300-$450, while an O-4 with more than 12 years of service would set aside $700-$1,000 monthly.

If 10-15% of basic pay seems like too much to muster right now, consider starting out small when you convert your dollar contributions to a percentage. The important thing is staying committed to saving for retirement. You also can contribute a larger percentage of incentive or special pay, as long as you meet that 1% minimum deduction from basic pay.

USAA Mutual Funds

It’s important to keep in mind that the Roth TSP contribution is calculated based on gross pay, but the deduction is taken from net (after-tax) pay. The great appeal of a Roth account is that, because you pay taxes on contributions, you generally won’t pay taxes on your account’s earnings when you make qualified withdrawals during retirement.

Also worth knowing: For uniformed services participants, the 2015 TSP contribution limit (traditional and Roth combined) is $18,000 from basic, incentive, special and bonus pay. Traditional TSP contributions made from tax-exempt pay earned by those in a combat zone are not included in that limit. Program participants age 50 and over can put away up to $6,000 more in “catch-up” contributions.

More information about TSP is available at tsp.gov.

USAA Mutual Funds

The contents of this document are not intended to be, and are not, legal or tax advice. The applicable tax law is complex, the penalties for non-compliance are severe, and the applicable tax law of your state may differ from federal tax law. Therefore, you should consult your tax and legal advisers regarding your specific situation.

Financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer.

Related Posts:

  • Active Duty Service Members Must Change Roth TSP ContributionsActive Duty Service Members Must Change Roth TSP…
  • Roth Contributions Open to All Active-Duty TroopsRoth Contributions Open to All Active-Duty Troops
  • Thrift Savings Plan Offers New Roth OptionThrift Savings Plan Offers New Roth Option
  • Thrift Savings Plan Contribution Limits Increase in 2013Thrift Savings Plan Contribution Limits Increase in 2013
  • New Roth TSP Program Will Expand Financial Readiness OptionsNew Roth TSP Program Will Expand Financial Readiness Options
  • Pay Dates Increase for Civilians in 2015Pay Dates Increase for Civilians in 2015

Comments

Filed Under: Finance, Money, Pay

First Name:
Email:
 
  • News
  • Enlist
  • Education
  • Career
  • Finance

DoD Must Be More Agile in Technology Development

APRIL 19, 2018, Washington D.C. – The Defense Department must embrace a more agile approach to technology development to keep pace with rapidly evolving adversaries, the undersecretary of defense for research and engineering told lawmakers yesterday. Michael D. Griffin appeared before the House Armed Services Committee for a hearing on promoting DoD’s culture of innovation. […]

First Female Marine Students Arrive at SOI-West

MARCH 8, 2018, Camp Pendleton, CA – This marks the first male-female integrated Marine Combat Training Company on the West Coast. “It is important, one team one fight, at the end of the day it’s to show the Marine Corps can produce [Marines] regardless of gender and complete any mission.” Said Sgt. Ambar Gonzalez, a […]

The Forever GI Bill

The Harry W. Colmery Veterans Educational Assistance Act, also known as the “Forever GI Bill,” was signed into law on August 17, 2017, and brings significant changes to Veterans’ education benefits over the next few years. Most enhance or expand education benefits for Veterans, servicemembers, families and survivors. Here’s a list of the changes and […]

The Soldier Doctor That Diagnoses Helicopters

MARCH 29, 2018, Taji Military Complex, Iraq – A torque wrench squeals as it secures the bolts of a forward support tube onto a UH-60 Black Hawk engine in a maintenance shop March 23. U.S. Army 1st Battalion, 126 Aviation Regiment (General Support Aviation Battalion) aircraft power plant repairer Spc Kathleen Scanlon, works with her […]

The Three Biggest Mistakes Service Members are Making With Their Money

APRIL 4, 2018, Hanscom Air Force Base, MA – Since April is Financial Literacy Month, Joe Chesloski, a personal financial counselor with more than 20 years of business and finance experience, offered his perspective on the biggest mistakes service members make with their money — and how those mistakes can be avoided. BE CAUTIOUS WITH […]

Recent Posts

  • DoD Must Be More Agile in Technology Development
  • ‘Realm of the Possible’ Revealed by Multi-Mission Unmanned Surface Vehicle
  • Soldiers, Marines Bring Joint Light Tactical Vehicle Operational Testing to Completion
  • DoD, DHS Outline National Guard Role in Securing Border
  • The Forever GI Bill
MAINMENU


SITESEARCH
Can't find something? Try using our site search to dig through our entire site.



Still having trouble? Try the Advanced Search to refine your searches.
NEWSLETTERSUBSCRIBE
Sign Up To Receive Information, Updates and Special Officers from MilitarySpot.com.



Don't miss an issue! Jump in the Newsletter Archives to catch up on previous issues.
FOLLOWMILITARY SPOT

Follow us on Facebook, Twitter & StumbleUpon and more. Keep up with MilitarySpot.com news & updates. We also have an RSS Feed.

Advertise | About | Write for Us | Contact | Feedback | Recruiter Network | Unsubscribe | DMCA | Privacy Policy | Terms of Use
 
Copyright 2004-2018 Sun Key Publishing. All Rights Reserved.

This is a private website that is not affiliated with the U.S. government, U.S. Armed Forces, or Department of Veterans Affairs. U.S. government agencies have not reviewed this information. This site is not connected with any government agency. If you would like to find more information about benefits offered by the U.S. Department of Veteran’s Affairs, please visit the official U.S. government web site for veterans benefits at http://www.va.gov.