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Thread: TSP Modernization Act - Any traction on this legislation?

  1. #13

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    Actual Bill language states: "As soon as is practicable, as determined by the Executive Director of the Federal Retirement Thrift Investment Board, but not later than 2 years after the date of enactment of this Act, the Executive Director shall prescribe such regulations as are necessary to carry out the amendments made by this section." https://www.congress.gov/bill/115th-...bill/3031/text

    Does anyone track FRTIB in the Federal Register where proposed regulations are published?
    https://www.federalregister.gov/agencies/federal-retirement-thrift-investment-board With response period, even if they publish proposed regulations by February, it will probably take at least 3-6 months before anything is finalized after publishing proposed regulations.



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  3. #14

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    Answers to Frequently Asked Questions on the New TSP Modernization Act


    The Thrift Savings Plan has provided a fact sheet that answers frequently asked questions for federal employees and retirees about changes to TSP withdrawal options associated with the passage of the TSP Modernization Act last month. Highlights of the fact sheet are below.

    The law eliminates the statutory prohibition on multiple post-separation withdrawals and multiple age-based withdrawals while a participant is still working. It also removes the restriction that participants cannot take partial post-separation withdrawals if they've already taken an age-based in-service withdrawal. Though it has no effect on required minimum distributions mandated by the Internal Revenue Code, the law also allows separated participants who are over age 70Ĺ to remain in the TSP, eliminating the requirement to make a withdrawal election on an entire account balance. Participants will also be able to stop monthly payments, change payment frequency, or elect to purchase an annuity while receiving monthly payments.
    FAQs on the TSP Modernization Act

    How did the TSP Modernization Act come to be?
    Recognizing a need, the FRTIB developed a package of legislative changes that would provide withdrawal flexibility for TSP participants and shared the package with members of Congress. We are very appreciative of Senators Portman and Carper and Congressmen Cummings and Meadows for introducing legislation based on our suggestions last spring. And we're pleased that Congress passed and the President signed this bill.

    If the law has been passed, why are the new options not yet available, and why could it take up to two years for them to become available? [more]

    TSP Modernization Act Freqently Asked Questions (FAQs)


    Links Crude Settle $61.61 02-16-2018
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  5. #15

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    If the new regulations are scheduled for publication in February 2018 we should expect at least a portion of these new options to be available in late 2018. I'd also like to see major improvements site-wide on TSP of the fillable PDF forms. Many of them are glitchy with, or without, a full version of Adobe. Maybe even offer a fillable Word version that can be saved for future use without entering the same information repeatedly from scratch. I have fits with some the current forms. Doesn't do much good to offer more and more withdrawal options and associated online forms if the forms don't work as expected. Just me bitching. If TSP is going to make forms available online make them simple and functional.
    I, for one, like the idea of making a single withdrawal at the end of each year instead of recurring monthly withdrawals. That way my money has gained interest all year, and I only need draw out the amount I need to cover annual expenses that I've incurred, or to bolster my savings accounts to the level I deem necessary. One strategy my wife and I adopted is to keep a money market account that we draw from for home projects, repairs, additions, boating expenses, and improvements to our lakehouse, etc., throughout the year. We've been replenishing it with a portion of my very small monthly TSP withdrawals. I would much prefer to make a single year-end withdrawal to build it back up only in the amount we used over the course of the past year.
    We finally have more reasonable options for how we direct and use our own money. It's about time.

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  7. #16

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    Hallelujah! that second link says they are going to make it possible to take separate withdrawals from tsp-traditional vs tsp-roth, instead of forcing prorated from both accounts same time. simplifies my tsp withdrawal strategies enormously, in the event I want to get rid of the teeny tiny tsp-Roth catchup acct I accidentally contributed to early this past year instead of to regular tsp-catchup as had intended.

    I talked about that earlier this year when I discovered the mistake and was seeing about getting it undone. Idiots at payroll said no, I couldn't undo it and move it to trad tsp, because I'd already paid taxes on it. Even tho I told them I had found a DOD tsp form that allows for undo of roth-tsp contribution, and was asking about existence of a civilian version of that form. which evidently doesn't exist. Any DOD person could undo their roth-tsp contribution if they wanted to, by using the DOD form, despite having already paid taxes on it...., but nooooo, my question about doing the same thing on civilian side was treated pretty speciously, they never even acknowledged that it IS possible on DOD side, much less said hmmm, if it's allowed there, it should also be allowed on civilian side, we'll look into it, see what can be done. No service-oriented attitude about tsp logistics on the civilian side. this new legislation is at long last a good start. loooooong overdue.

    With the new tax brackets, once the regs are in place, I'll be able to pull lump sums for buying retirement mini-farm property during the years the new brackets are in place. have the place paid off in that timeframe, that way by the time tax brackets revert to what they are now, I won't need to pull as much in monthly or yearly (I love that option too!), since won't be needing more for mortgage payments, just living expenses and cash flow for small startup shoestring businesses associated with the retirement property concept. I'm loving the new possibilities for feasible sustainable money management in retirement years coming soon to an alevin near you.
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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  9. #17

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    Or NOT withdrawing if it would put you in another tax bracket etc.
    Links Crude Settle $61.61 02-16-2018
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  11. #18

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    True, if you don't have good reason to bump up a bracket for a short time. for me, I would be in 24-25% bracket either way if I have a mortgage for 10 years post-retirement. why pay 10 years of mortgage with tsp pulled at 24-25%, if I can pay it off in half the time by pulling tsp at 22-24%?

    Once the mortgage was paid off, I'd be able to drop down to 12-15% bracket in 2025 or sooner due to lack of mortgage costs to worry about. Save money coming and going, short and long. buy in a low prop-tax state, and one that doesn't have high state income tax either, and the pencil math works. It only works if think about all the moving parts together, will give you that. I don't intend to stay in high state-income tax/high prop tax state when I pull the fed plug. retirement property will be bought elsewhere more conducive to longterm sustainable finances.
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard


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  13. #19

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    And at 70 1/2 years old you have to withdraw and they have a minimum. I may not withdraw anything or bring it down a notch or two. Still trying to make more $$$$$$$$$$$$$$$$$!
    Links Crude Settle $61.61 02-16-2018
    +$.34 Gain




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  15. #20

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    You definitely have to find that post-retirement income sweet spot where you have adequate $$$ for wants and needs, but you minimize your tax burden to the extent possible. I know it took me a couple of years to find it. Now my wife is retiring mid-year and Iíll have re-calculate to take that into account.
    Itís an ever changing balancing act.

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  17. #21

    Default Re: TSP Modernization Act - Any traction on this legislation?

    Quote Originally Posted by RazorCat View Post
    You definitely have to find that post-retirement income sweet spot where you have adequate $$$ for wants and needs, but you minimize your tax burden to the extent possible. I know it took me a couple of years to find it. Now my wife is retiring mid-year and Iíll have re-calculate to take that into account.
    Itís an ever changing balancing act.
    Would you mind sharing how you minimize the tax burden? Are you already withdrawing from TSP?
    Emotions should never play a role in one's investing strategy!
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  19. #22

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    Quote Originally Posted by Maricar19 View Post
    Would you mind sharing how you minimize the tax burden? Are you already withdrawing from TSP?
    Only withdrawing $200.00 per month right now (fishing is expensive). My wife is retiring mid-year. I increased it to $800.00 per month to keep my fishing money, and cover what she was putting in savings for our home projects fund from her salary until we have a handle on expenses vs. income with her no longer working. The rest of her salary is covered by withdrawals from her IRA (only until she hits 62). Problem is, Iím locked in for the year since we have a December 15th deadline for changes to monthly payments. I doubt seriously weíll need the entire $7,200.00 added. But, it counts as taxable income anyway. Iíd rather keep it in TSP making interest (hopefully) and only draw out what I need, when I need it. Itís not a huge deal, but anything I can leave in TSP draws more interest, and doesnít raise my taxable income.
    Thatís just how look at it.

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  21. #23

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    Default Re: TSP Modernization Act - Any traction on this legislation?

    Received an e-mail from TSP today titled Information about changes to TSP withdrawal options


    Nothing surprising, but might answer questions some have about current employment and withdrawal status vs. future options available under the TSP Modernization Act.
    https://www.tsp.gov/PDF/formspubs/tspfs10.pdf

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