Courtesy illustration
By Abigail Reid
27th Special Operations Wing Public Affairs
If you are an active duty member of the Army, Air Force, or Navy making dollar-amount Roth contributions to your Thrift Savings Plan account, these deductions will stop Jan. 31, 2015, unless you act beforehand.
How your election requirements will change:
An upcoming change in MyPay will require you to designate your Roth contributions as a percentage of your pay, not a dollar amount. If you do not comply with this change, then the Defense Finance and Accounting Service will not be able to process your Roth contributions. This change affects your Roth contributions only; your traditional contributions are already designated as a percentage of your pay.
When the change will take place:
The new requirement will take effect Jan. 1, 2015. You will have 30 days to change your Roth election from a dollar amount to a percentage of your pay. If your new Roth election is not received by Jan. 31, 2015, then DFAS will not be able to process your Roth contributions until you update them.
How to make the change:
Log in to MyPay; click on the TSP section called “Traditional TSP and Roth TSP.” Then, in the “Contribution from Roth TSP” section, you can enter the percentage of your pay that you would like to contribute, for example 10 percent. Finally, click “Save” at the bottom of the screen.
Why Roth contributions might be good for you:
When you make Roth contributions, you pay taxes on the money you save before it goes into your TSP account. You pay no income taxes when you take it out and your earnings can also be tax-free if you have reached age 59 and a half, or have a permanent disability and five years have passed since the year of your first Roth contribution.
As a member of the uniformed services, you can make Roth contributions from tax-exempt pay, basic pay, incentive pay, special pay and bonus pay. If you make Roth contributions from tax-exempt pay earned in a combat zone, you will not pay taxes on your contributions and you will have the opportunity for tax-free growth.
If Air Commandos have additional questions, they can contact the Airman & Family Readiness Center office at 575-784-4228.
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