Worried That Your Next SEC Audit Will End in Fines? TAKE THE ASSESSMENT

Military Retirement Planning

financial planning for military retirees

The Thrift Savings Plan (“TSP”) is a retirement savings plan for federal employees, and it has been open to military personnel since 2000.

TSP accounts may be accessed from anywhere in the world so long as a service member has internet access and their account number and password. The service member may:

  • make inter-fund transfers and contribution allocations;
  • request a financial hardship or age-based in-service withdrawal, if eligible;
  • transfer or rollover funds from IRAs and eligible employer plans into the TSP account;
  • and track transactions and investments in the TSP account.

A TSP account may consist of a traditional non-Roth balance, a Roth balance, or both. When both balances are in a service member’s account, any withdrawals will be paid pro rata from each balance. Therefore, the distribution will be paid proportionally from taxable and nontaxable amounts.

The TSP has some tax consequences that are unique to service members. For example, if a service member’s contributions are subject to the combat zone tax exclusion, there are restrictions on the types of retirement plans they can be rolled into. Also, required minimum distributions cannot be transferred to an IRA or eligible employer plan.

Did you know? Four out of ten people cash out their retirement savings when changing jobs.

Are you a financial services professional assisting our service members with their retirement planning? Contact us today for more information on how to service members of the military, both retired and active duty, the policies and procedures you should have in place, and the disclosures you will need to make.

Author Bio

Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.

Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.

LinkedIn | State Bar Association | Avvo | Google