Posted on Friday, 25th June 2021 by

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Earlier this year the Thrift Savings Plan (TSP) launched a redesigned website. Concurrently, they announced significant account access and security changes, additional L Fund options, and the ability to submit certain TSP forms online after logging into your account. They sent out a message from the executive director to all participants last February announcing these significant changes.

For those still working and contributing, I encourage you to increase your contributions each year by at least half of your annual cost of living increase. The maximum TSP contribution for 2021 is $19,500 and if you are over age 50 you can add an additional $6,500 catch up contributions. Promotions are another ideal time to increase contributions. The more you contribute the less you pay in annual taxes since your contributions are tax deferred. Secondly, you will build a substantial balance for when you retire. Many with 25 or more years of service will retire with a million or more in their account if they maximize their contributions early in their career.

You can use a similar approach, as I did, to retire mortgage free and increase your retirement savings significantly.

After this update, when you first login to your TSP account using your original account number and password, you will be prompted to setup a user ID before you can access your account information. There is “USER ID FOR LOGON” setup instructions to the right of the Login Form. To improve security, you no longer use your actual account number and must establish a user ID and an updated password for your account. This is similar to what Medicare did several years ago when they established individual account numbers instead of using the person’s Social Security number as their Medicare account number.

They also ask for a phone number and will send either a text message to your cell phone or they will call you with a 5-digit login verification code that you must enter to access your account.  I must admit the secondary verification can be a nuisance if you go into your account frequently. However, it does add another layer of security for your account.

I published an article titled Account Access Instructions last March that outlines how I keep track of all of our account access information. These TSP access changes need to be available in your estate plan for your spouse and heirs. When login IDs and passwords change, I generally add any changes in pen until my next major update which is generally every three years.

Under account statements, you can download quarterly and annual statements, print out a 1099 R form for any distributions taken, and generate a Verification of Account (VOA) statement that may be required for certain financial transactions. Account balance statements are also available for any date you choose.

Under “Upload a TSP Form” you can complete one of several forms, scan and convert it to a PDF form, and send it to the TSP for certain actions such as the TSP-3 form required for designation of beneficiary or the TSP-99 form for withdrawals.  Complete details on the form upload process are available on the TSP site.

A significant change was the establishment of 5-year Lifecycle (L) Funds to closely match your target retirement date. They now offer L funds starting in 2025 going out to 2065 in five-year increments. The TSP sends out informative annual updates each January that details your account activity for the past year. They provide an annuity estimate based on your current account balance, past year and recent quarter change in value, with a five-year history of gains on the first page.

Your beneficiary elections are listed on page three of the annual report. If you need to make changes, you can now send in a TSP-3 beneficiary form electronically while accessing your TSP account. Another interesting entry on your annual summary is your lifetime TSP contribution. It shows just how much your TSP has grown since you retired. Page five lists the past 1, 3 and 5-year performance for each fund. I add this annual summary to my estate planning binder after I review it each year.

The TSP is changing with the times and for the most part the improvements are noteworthy and beneficial. Take advantage of their low fund expense fees, some of the lowest in the industry, and grow your retirement account significantly over time.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Last 5 posts by Dennis Damp

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION | Comments (2)


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2 Responses to “Maximize Retirement Income & TSP Changes”

  1. Timothy MacDonald Says:

    Maybe you have covered this but if not… Just got hit with a bill from my Dr for wellness visit cause BCBS says they only pay after 65 for over and above what Medicare would pay even if you’re not enrolled. So my $30 copay now costs $170 out of pocket. Still in my IEP but now poorer. Was never briefed on this wrinkle in several retirement seminars that I have attended.

  2. Dennis Damp Says:

    My wife and I both have Medicare A and B and haven’t paid any copays, coinsurance or deductibles since turning 65. One of the major advantages of signing up for Medicare A and B at 65 is that your FEHB provider in most cases picks these up. Here is a series of articles that I wrote on Medicare that you may find helpful: 
    1) Medicare and FEHB Options – What Will You Do When You Turn 65? (Part 1) 
    2) A Marriage of Convenience – Medicare & FEHB
    3) What to Consider Before Enrolling in Medicare B (Part 2)
    4) Should You Change to a Lower Cost FEHB Plan When You Sign Up For Medicare (Part 3)
    5) Caution – Don’t Lose Your FEHB CoverageMedicare Part B and
    6) FEHB Update (Part 4)