Active Duty TSP contributions may stop without action
By Abigail C. Reid, Federal Retirement Thrift Investment Board
/ Published November 21, 2014
KEESLER AIR FORCE BASE, Miss. -- If you are an active duty member of the U.S. Army, Air Force, or Navy making dollar-amount Roth contributions to your thrift savings plan account, these deductions will stop on Jan. 31, 2015, unless action is taken.
How your election requirements will change:
An upcoming change in myPay will require you to designate your Roth contributions as a percentage of your pay, not a dollar amount. If you don't comply with this change, then the Defense Finance and Accounting Service will not be able to process your Roth contributions. This change affects your Roth contributions only; your traditional contributions are already designated as a percentage of pay.
When the change will take place:
The new requirement will take effect Jan. 1, 2015. You will have 30 days to change your Roth election from a dollar amount to a percentage of your pay. If your new Roth election is not received by January 31, 2015, then DFAS will not be able to process your Roth contributions until you update them.
How to make the change:
First, log into myPay. Click on the special TSP section called "Traditional TSP and Roth TSP." Then, in the "Contribution from Roth TSP" section, enter the percentage of your pay that you'd like to contribute. Finally, click "Save" at the bottom of the screen.
Why Roth contributions might be good for you:
Roth contributions are taxed before going into a TSP account; so account holders don't pay income taxes when savings are taken out. Earnings can also be tax-free for those who are over the age of 59 or have a permanent disability, and five years have passed since the year of your first Roth contribution.
Service members can make Roth contributions from tax-exempt pay, basic pay, incentive pay, special pay, and bonus pay. If the Roth contributions from tax-exempt pay are earned in a combat zone, they are tax free, and you'll have the opportunity for tax-free growth.