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Thrift Savings Plan (TSP) Q&A


Guest baileyf16

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I couldn't max both until I was sr capt.  Other guys with dual incomes were putting away their entire paychecks as Lts.  The mindset/lifestyle choices are more important than the numbers.

The Roth IRA has some benefit as an emergency fund in dire straits.  The Roth TSP has the benefit of lower expense ratios.  Which is better depends on your situation.

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  • 2 weeks later...

Just putting this here to help out the crowd...

If you deploy and want to take advantage of the increased TSP contribution limits, it is a difficult process. I tried and failed to do so but bottom line is finance will still cap you at the normal annual limit even if deployed.  There is no easy/automatic increase to the contribution limit for the CZTE pay.  My advice is front load your contributions in the year you deploy, as you will probably miss out on some months as the paperwork goes through allowing additional contributions. 

Has anyone contributed beyond the usual $18,000 during a deployment? Please share how the process worked. 

Has anyone maxed out their $53,000 CZTE contribution limit? I assume you are an unmarried general on your 365 to Kabul.

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yes to the first question, and no to the second.  What I did was allocate 100% of special and bonus pays to TSP, and then when I deployed, I didn't have to change anything - I was getting way more bonus and special pay and it took care of itself.  Come W2 time, all the TSP contributions during a deployed time showed up appropriately, and were definitely above the standard annual limit.

The only time I had an issue was when I deployed during the last week of Dec one year and my TSP didn't kick in, since that month had already closed out in DFAS' mind and I had already maxed out my annual contribution limit in Nov.

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On 12/29/2015 at 11:44 PM, iowa said:

Has anyone contributed beyond the usual $18,000 during a deployment? Please share how the process worked. 

Has anyone maxed out their $53,000 CZTE contribution limit? I assume you are an unmarried general on your 365 to Kabul.

DISCLAIMER:  My info is stale--I retired in 2013.

Yes to both questions.  I exceeded the annual deferral limit every year (since the TSP started) during which I had any deployment (it wasn't always $18K; I think it was about $10.5K when the Uniformed TSP first started; the deferral limit increases over time, though it's still $18K for 2016).  Unlike your experience, it was automatic--in other words, my elections stayed whatever I set them to (or changed them to), and the contributions came from the CZTE pay (without regard to the deferral limit).

I maxed it once, when I had six months deployed in a calendar year.  I fell short of maxing a second time by about $2K (four months deployed).  Single, yes (no real money getting spent at home), but O-5 on flight pay for a 180 & a 90-day, respectively (and, thankfully, not Kabul for either).

I had (three different deployments) the issue you describe with the system "not catching up."  Search on posts I've made in the past for details--but, bottom line, the "E" in "CZTE" stands for entitlement (translation:  Finance's rules can't take it away from you); the TSP is an entitlement; your ability to contribute from CZTE money in excess of the deferral limit is an entitlement.  It will be a pain in the ass, and you will ultimately have to "write a check" if you want to go down this road--but, in three separate cases of refusing to take the Finance airman's "no" for an answer and insisting that they open a case file with DFAS, I retroactively made a contribution for the initial month of the deployment which had already "closed" by the time the system flagged me for CZTE.

One big "gotcha" is the limit on officer CZTE.  If you're senior enough (in my day, that meant "12-year O-4 on flight pay") to be affected by that (OR, during the month your ACP hits, if applicable), you need to be careful about maxing out your CZTE contribution before maxing out your deferred contribution.  Again, search my past posts on the subject for details if you're interested.

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Well I definitely let airman snuffy tell me NO and moved on.  I wasn't going to be able to contribute much past the usual 18K so I didn't miss much.

Well interesting to hear it was automatic for some.  I guess advice for the next guy is be on the lookout cause finance may be incompetent... news to everyone I'm sure.

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On ‎1‎/‎2‎/‎2016 at 1:59 PM, ThreeHoler said:

I thought the E in CZTE stood for Exclusion.

 

On ‎1‎/‎2‎/‎2016 at 3:41 PM, Herk Driver said:

 

And you would be correct, but he was on a roll.

http://www.dtic.mil/whs/directives/corres/pdf/134025p.pdf

 

21 hours ago, nsplayr said:

The entitlement generation indeed...yeesh!

 

Yikes....  Senior moment (I mentioned I was retired, yes...?).

Forget the acronym--point stands (it's an entitlement, Finance can't screw you out of it).

 

Now, get off my lawn while I go to the commissary for some cigarettes....

 

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  • 5 years later...

Bump!  Anybody get out of AD, go into the reserves part time with a Traditional TSP?  Looking at options to move it to a Roth IRA (or something roth) now, rather than later.  37 years old....recommendations on past experience with anybody?  Seems a direct rollover to an account is possible, just wondering what people have done on here, aside from just reading articles on the truthful interwebs.

 

I know it's talked about a bit a couple pages back, just wondering about experience in the last 5 years I guess.

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4 minutes ago, isuguy1234 said:

Bump!  Anybody get out of AD, go into the reserves part time with a Traditional TSP?  Looking at options to move it to a Roth IRA (or something roth) now, rather than later.  37 years old....recommendations on past experience with anybody?  Seems a direct rollover to an account is possible, just wondering what people have done on here, aside from just reading articles on the truthful interwebs.

following this as well! looking for the same...

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3 hours ago, Homestar said:

Will TSP let you transfer it to the Roth TSP and pay the taxes on it?

I may be missing the point here since my situation was a little different, but I moved money from TSP (to a traditional not Roth IRA) when I left the civilian work force and TSP didn't really care who/where it was going as long as I could show I was transferring it to a legitimate investment company (Vanguard).  This was one of the few things that was actually easy to do with TSP.

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1 hour ago, stuckindayton said:

I may be missing the point here since my situation was a little different, but I moved money from TSP (to a traditional not Roth IRA) when I left the civilian work force and TSP didn't really care who/where it was going as long as I could show I was transferring it to a legitimate investment company (Vanguard).  This was one of the few things that was actually easy to do with TSP.

Maybe I misunderstood. I thought you were looking to transfer your traditional TSP to Roth vehicle. I was wondering outloud if the TSP would let you move traditional TSP monies to a Roth TSP. But it sounds like the money is out of the TSP system now. Most likely I’m misunderstanding your situation. 

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4 hours ago, Homestar said:

Maybe I misunderstood. I thought you were looking to transfer your traditional TSP to Roth vehicle. I was wondering outloud if the TSP would let you move traditional TSP monies to a Roth TSP. But it sounds like the money is out of the TSP system now. Most likely I’m misunderstanding your situation. 

That's why I was saying my situation was different.  I was going traditional IRA to traditional IRA (TSP to Vanguard).  I just don't recall TSP caring where my money went as long it was a legitimate investment firm.

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Homestar, you're trackin what i'm throwin down.  Trying to pay taxes now on that money i put in during my active duty days, but was too dumb to change it to roth while I was still pouring dolla bills in!  Through my research, I didn't see a way to relatively easily transfer my traditional tsp to a roth vehicle as you put it.  

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I separated from AD over a year ago and am now an AFRC TR.  I haven't touched my Roth TSP since I separated and honestly kind of forgot I had it.  Is there any benefit to me keeping it and picking back up the contributions vs. transferring it to my other Vanguard Roth IRA?  The only benefit to the TSP was the matching portion, but I'd imagine I'd have to be AD for that to happen?

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Technicians / GS / civil servants can get matching. Vanguard brokerage opens the stock market up to your Roth IRA where TSP has your choices pretty limited.

Not sure what the rules are on when you are allowed to transfer money from your TSP

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On 1/15/2021 at 7:02 AM, Guardian said:

I think you can transfer from TSP to traditional IRA then move that to Roth IRA with the penalties. And even move it back to ROTH tsp if you like.

This is the answer.

There's no "penalty", but you do have to pay taxes on the gains in the traditional account when you convert it.

You can also convert a piece at a time to avoid a giant tax bill in a single year if you have a healthy chunk to convert.

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6 hours ago, BADFNZ said:

Is there any benefit to me keeping it and picking back up the contributions vs. transferring it to my other Vanguard Roth IRA? 

Posters on other forums really really like the G fund for their conservative holding.  There’s nothing like it in the retail world so they say keep your TSP for that.  I’d like to consolidate accounts but haven’t pulled the trigger for that reason.

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@ThreeHoler and @Guardian have the options right. Put it in the TSP for cheap investments but limited options; pull it to a Roth IRA for a broader investment choice but a higher burden (ish; depends on what you do with it) of investing and (slightly) higher fees. 

Also realize that the MATCH is not a Roth; it’s Traditional pre-tax match. So, it doesn’t get you extra in your Roth. 

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