BUCKLEY AIR FORCE BASE, Colo. --
The Thrift Savings Plan, a retirement investment opportunity, now offers a Roth option for service members, and the Buckley Airman & Family Readiness Center financial counselors are available for anyone interested in taking advantage of this option.
The change, which took place Oct. 1, allows service members the choice of placing funds in either a traditional or Roth plan.
Regardless of the chosen option, the TSP is a viable benefit for service members because TSP contributions are made via payroll deduction, making it simple to contribute, noted Patricia Pope, A&FRC chief. Also, it can roll into a different plan once a service member leaves the military.
The difference between the traditional and Roth plans is with the "Traditional TSP, you defer paying taxes on your contributions until you withdraw them. If you are a uniformed service member making tax-exempt contributions, your contributions will be tax-free; only your earnings will be subject to tax at withdrawal," explained Pope. "If you make Roth contributions, you pay taxes on your contributions as you are making them - unless you are making tax-exempt contributions from combat pay - and get your earnings tax-free at withdrawal as long as you meet the requirements to qualify."
People may prefer contributing to the Roth TSP because "when you make withdrawals in retirement, they are tax-free," Pope added.
Service members have special considerations regarding contributions, as they have the potential to receive basic, incentive, special or bonus pay.
According to the TSP website, a service member can contribute between 1 and 100 percent of type of pay, so long as they also contribute from the basic pay. They may not, however, contribute from housing or subsistence allowances. Tax-exempt pay, often received in a combat zone, remains tax exempt if contributed to the TSP.
Service members uncertain of difference between the two options or which option is more beneficial to their particular situation have numerous resources for assistance.
The TSP website offers an abundance of information on topics such as eligibility, contribution limits, various investment funds, retirement and investment planning, and more. To learn more, visit the website at www.tsp.gov
The A&FRC offers financial counseling for not only the TSP, but also for other finance-related issues or questions. The A&FRC can give people needing an introduction to investing can take advantage of the center's financial counseling benefit to prepare their financial future. To make an appointment with a financial counselor, visit the A&FRC in Bldg. 606 or call 720-847-6681.