Pinnacle Personnel Services LLC | Debbie Hatch
With so much being reported over the past couple of days, and wide-spread hysteria about TSP, I’d like to clarify a few things.
First, THE CONCERNS.
While I won’t name specific names, several “professional” reporting agencies and “experts” have shared this picture on their various sites. It is designed to do nothing but upset people, advance a political agenda, and increase their company clicks, likes, and shares.
Those are the currency of social media. It’s not factual!
No, it’s not new. We’ve seen this several times already.
It’s not “just like Social Security”.
No, it has not had negative consequences to employees in the past and it will not this time. Yet, I’ve also seen numerous employees changing their investment elections and making withdrawal decisions based upon faulty information. That’s sad.
Next, THE CHANGES. I’ve previously sent an email about the TSP Modernization Act being signed into law back on 17 November. Nothing has changed with that. TSP continues to work on updating implementing regulations and computer systems.
In addition to the new law, TSP has decided to change distributions from split TSP accounts. Currently if you contribute to both Roth and Traditional TSP, and make a withdrawal, that withdrawal is prorated from both. For example, lets say 70% of your total account balance is in traditional and 30% is is Roth. When you withdraw money, it comes out 70% from traditional and 30% from Roth. That is no longer going to be the case!
As always, please don’t hesitate to let me know if you have questions about anything to do with retirement planning – or if you think of topics you’d like me to blog about.