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This is only important to FERS and Military personnel who have used the TSP program for retirement savings. The changes are good and important IMHO. It is gaining momentum and hopefully will be passed soon. The current rules are very restrictive and in some cases impossible to work with. Under my circumstances it works well but could have more flexibility. The changes were proposed by TSP after review and evaluation since people of my age are really in the first wave of retirees drawing on the system.
The Program was initially envisioned as a pension style series of payments. A lot like how I have my withdrawals going. The change will remove anything that is not part of any other 401k system out there. As I said in my case the program is good. I have as much control as I absolutely need but not enough for changes throughout the year. I can make 1 change a year on how much my payments will be for the next calendar year.
Well it is for the very last of the CSRS folks and only those people that decided that in spite of not getting the match they contributed to TSP. A lot of the CSRS folks around me especially those that were closest to retirement didn't contribute. FERS folks though are a hugely different story. Sorry if you felt slighted. TSP is 30+ years old. The change over from CSRS happened all at the same time. They had some crossover of CSRS folks converted, some blended and others just stayed as CSRS. If there are CSRS employees out there they have over 40 years of service now and counting.
ok, thanks. i was trying to figure out if i missed something. the article seems to reference retirees as well and how they manage their fund so...
"The TSP Modernization Act, sponsored by Reps. Elijah Cummings, D-Md., and Mark Meadows, R-N.C., would allow federal employees and retirees enrolled in the Thrift Savings Plan to make multiple age-based withdrawals after leaving government..."
ok, thanks. i was trying to figure out if i missed something. the article seems to reference retirees as well and how they manage their fund so...
"The TSP Modernization Act, sponsored by Reps. Elijah Cummings, D-Md., and Mark Meadows, R-N.C., would allow federal employees and retirees enrolled in the Thrift Savings Plan to make multiple age-based withdrawals after leaving government..."
The problem is if you haven't got much many decided to take it as they got out. I know a few. The way it is written is if you want to take it out over 10 years you got screwed if all you had in was 200k It wouldn't last you long at I income rate but they said all or nothing. So in one case you have a half mil. That is a nice easy math income cause you have a pension take 3% and it lasts 40 years by the calculator. If you only have 200k you would be lucky to take 700 a month to make it last over the 10 year mark. So if your payments can't stretch that far they had even worse options for you. The entire premise is based on about a 30 year period saving 12% salary invested in some decent index funds and the rules made easy. You take the entire amount in monthly you taking the risk of fluctuations or buying an annuity and letting the insurance take on that risk just so that the entire system was based upon the thinking at the time as a pension system. Time for them to fix that. Oh and one more thing those restrictions even applied post 59 1/2 when all other tax advantaged retirement savings have no such restrictions.
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