Shows & Panels
- AFCEA Answers
- Ask the CIO
- The Big Data Dilemma
- Carrying On with Continuity of Operations
- Connected Government
- Constituent Servicing
- Continuous Monitoring: Tools and Techniques for Trustworthy Government IT
- The Cyber Imperative
- Cyber Solutions for 2013 and Beyond
- The Data Privacy Imperative: Safeguarding Sensitive Data
- Expert Voices
- Federal Executive Forum
- Federal IT Challenge
- Federal Tech Talk
- Mission-critical Apps in the Cloud
- The Modern Federal Threat Landscape
- The Path from Legacy Systems
- The Real Deal on Digital Government
- The Reality of Continuous Monitoring... Is Your Agency Secure?
- Veterans in Private Sector: Making the Transition
Shows & Panels
The TSP in 2013
Tuesday - 1/8/2013, 12:22am EST
One of the topics discussed is the Roth TSP, which was introduced in 2012. The Roth option will allow federal plan participants to withdraw their funds tax-free in retirement. That does, however, mean that you pay taxes on the monies you contribute to your Roth TSP now.
The introduction of the Roth option into the Thrift Savings Plan has generated much discussion as to who might most benefit from such a provision. Long says that he finds that the Roth TSP is particularly popular among younger federal employees, who also earn less than their older counterparts and are therefore in a lower tax bracket at this point in their careers.
The TSP director notes that participation in the Roth plan increased greatly with its being made available to those in the military service. He says this makes sense because many younger members of the military, while they are not highly paid, do have a high degree of disposable income inasmuch as their daily needs are already provided for (the proverbial "three hots and a cot").
"They can put the money in the Roth, pay their taxes in a very low tax bracket... and, if they do it right, all their earnings associated with it are tax-free 30 and 40 and 50 years later," Long says. "For the people who are the youngest and in the lowest tax bracket, the Roth is a very attractive option."
Other topics include:
- As of Dec. 31, 2012, the G Fund is still the leader in terms of funds invested in the TSP.
- With the loss of the payroll tax "holiday" some may reduce their TSP contributions. Long says that all FERS employees should be contributing at least 5 percent of their paycheck, in order to benefit from the government's matching contributions. Otherwise, he says, "you are leaving free money on the table."