Thrift Savings Plan (TSP) for Active Duty USA, USN and USAF Members

 

ATTENTION --

This information applies to active component Army, Navy and Air Force members, and certain Navy reserve members (those reservists with an ‘allotment’ block on their LES).

You may elect both Roth and/or traditional TSP contributions.  Traditional TSP contributions are deducted pre-tax; taxes are deferred until you withdraw your contributions.  Roth TSP contributions are taken after-tax.  If you elect to contribute to TSP, the contributions will be deducted from your pay account.  Further information on TSP as well as election forms may be obtained at www.tsp.gov.  You may also find information from your command or installation personal financial counselors, or your finance office.

Starting TSP Contributions

Basic Pay needed!
To participate in TSP, you must have elected a minimum of one percent of your basic pay for either traditional or Roth TSP contribution.
Know the contribution limits: The IRS has annual limits for TSP contributions. Stay up-to-date on the latest from the nation's tax authority. 

To participate in TSP, you must have elected a minimum of one percent of your basic pay for either traditional or Roth TSP contribution.

Because Roth TSP is calculated based on gross pay but deducted from net pay, you need to do the math to make sure you have sufficient net pay for the Roth contributions.  Traditional TSP also has a number of other deductions taken first, so you will need to make sure you have sufficient pay for traditional TSP also.

If you wish to make a Roth election (or add a traditional election to a Roth election), you will need to use the Roth election worksheet (adding the traditional election to the Roth election could result in insufficient net pay available for the Roth election).  Use the worksheet for Roth contributions from basic pay, special pay and incentive pay and a separate worksheet for Roth contributions from bonuses and one-time special pay.

Please see the combined maximum percentage charts if you plan on having both a traditional and Roth election (myPay has system checks for combined maximum percentages that will assist you with this). Choose the chart matching your situation: Have Traditional TSP and adding Roth TSP or Have Roth TSP and additing Traditional TSP. It is important to use these tools to avoid having insufficient net pay to cover the contributions.

If you wish to make a traditional TSP only election, you will need to use the traditional election worksheet for basic pay, incentive pay and special pay.  For traditional TSP only, you will not need to use a worksheet for bonus and other one-time special pays, since the only deductions for those pays are taxes, and traditional TSP is tax deferred.

Changing TSP Elections

Life and your financial needs and goals change.  Whether you need to reduce your contribution elections to balance your home budget or increase them to meet your future goals, you MUST submit contribution percentages in all pay categories when changing elections either via myPay or when submitting a TSP-U-1

For example, if you are satisfied with most of your current elections, but wish to increase the percentage of basic pay, you must repeat your current elections in each pay category along with the increased percentage for basic pay.  Failure to submit the correct percentage in each pay category will cause your contribution elections for unmarked categories to be recorded as zero percent.  The fields displayed in myPay for regular TSP can be changed to other values, or to zero if no percentage is desired.

Stopping TSP Elections

Currently, the military pay system handles a stop to all traditional elections and a stop to all Roth TSP contributions elections differently. 

If a stop to all traditional elections is submitted in June, it will be effective at the end of June and the last contribution will be made in June.  If a stop to all Roth elections is submitted in June, it will be effective at the end of May, and the last contribution will be made in May.

A future change will align Roth TSP to work the same as traditional TSP.  Until that change is made, please consider this issue when submitting an election to stop all traditional or all Roth TSP elections.

TSP Catch-Up Contributons

If you are 50 or over (or will turn 50 during the calendar year in which you make the election) and plan to contribute the maximum elective deferral amount to traditional and/or Roth TSP or an equivalent employer plan, you may be eligible to make additional contributions to TSP, called ‘catch-up contributions’.

Starting in January 2015, you can start Roth or traditional catch-up on myPay. To stop or change the amount of your current monthly catch-up contributions, you will be able to submit a TSP-U-1-C form to your finance office as you do now.  That form will also be available to start catch-up elections if you do not have access to myPay.

Read this Federal Retirement Thrift Investment Board fact sheet on catch-up contributions 

Updated June 29, 2015