facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog external search brokercheck brokercheck
%POST_TITLE% Thumbnail

The Times (and TSP) They Are a Changin'

Retirement Funding TSP Military Pay and Benefits

Important Benefit for Military Officers is Improving

I'm a fan of the Thrift Savings Plan (TSP).  I think it is a great place to accumulate funds  for your ultimate retirement. But I have often said that it isn't the  greatest for taking your money out. That is about to change. The  changes should be in place by September 15th of 2019. Here is a quick summary  of the major changes:

  • Currently you can only make two partial withdrawals, with the  second one being a complete withdrawal, from TSP. After the changes go into effect, you will be able to make multiple withdrawals essentially  without limits.
  • Under the rules in place now, your distributions  come out proportionately between your Roth and Pre-Tax balances. That  will change as well and you will be able to select which "side" to take  the distribution from. Your tax-exempt balance (from contributions made  in a combat zone) will come out proportionally if you take distributions  from your Pre-Tax balance.
  • You will now be able to take out  periodic distributions on a monthly, quarterly or annual basis. Currently you must take the monthly distributions to avoid the partial  withdrawal rule above.
  • Instead of only being able to change your periodic distributions once a year, you will be able to do it at any time.
  • Failure to take your Required Minimum Distribution will no longer result in your account being designated as "abandoned".

Overall, these changes are  all good. I'm happy to see that they have been made.  It certainly makes  a stronger case for leaving your funds in TSP as you enter the  distribution phase. But, I'm still not thrilled about the way TSP treats  beneficiaries who inherit a TSP account.  You can read more about that  issue here.

If you enjoyed this article, you might like the following blog posts:

Roth TSP in a Combat Zone: Almost a "No-Brainer"

TSP in a Combat Zone (Part II)

What to Do With Your Old 401(k) (or TSP) When You Switch Jobs


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.