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Stay Up to Date on the Thrift Savings Plan
Submitted by the Federal Retirement Thrift Investment Board
Get to Know AVA, a TSP Virtual Assistant
When you visit the TSP website at tsp.gov or use the TSP mobile app, you can access a virtual assistant called AVA, designed to help you quickly get the information you need. Since its launch in 2022, AVA has answered more than one million questions to help TSP participants find plan details and navigate My Account.
Looking for details about withdrawal options? AVA will point you in the right direction. Need to change your ThriftLine PIN? Want to check your account balance? Curious about how well your investments are doing? AVA can help with all this after you log in to MyAccount.
When you’re logged in to MyAccount during ThriftLine hours, you even can ask AVA to connect you with you a TSP representative via live chat to request transactions and ask about your account.
The TSP constantly is working to improve AVA’s ability to recognize your questions and provide useful responses. The more you use AVA, the better AVA can help you. Why not log in and ask AVA a question today?
Get to know AVA at tsp.gov.
Roth vs. Traditional Thrift Savings Plan
Q: How do I decide whether to contribute to Roth or traditional TSP?
A: Your decision about Roth and traditional TSP is a choice of when you pay income tax on your TSP contributions and earnings. There isn’t a set formula to determine which choice is best for everyone.
Your decision may change as your income and needs change over time. It’s definitely worth spending some time learning the details relevant to your situation. Here are a few questions you’ll want to ask yourself to get started:
1. Do I expect a higher or lower income tax rate in retirement?
2. How much money do I need in my paycheck right now?
3. Will my choice of tax treatment affect how much income tax I need to pay?
With Roth TSP, your contributions go into the TSP after tax withholding. That means you pay taxes on your contributions at your current income tax rate. The advantage of the Roth TSP is you won’t pay taxes later when you withdraw your contributions and any qualified earnings. If you expect your tax rate to be higher when you make withdrawals, Roth TSP may be the better option.
With traditional TSP, your contributions go into the TSP before tax withholding. However, when you withdraw money from your traditional TSP, you’ll pay taxes on both your contributions and earnings at the income tax rate of the year you make the withdrawal. If you expect your tax rate to be lower when you make withdrawals, traditional TSP may be the better option.
A Mix of Roth and Traditional TSP
You may consider splitting your contributions between Roth and traditional TSP. Note that if you receive automatic or matching contributions from your agency or service, those contributions always will go into your traditional TSP balance and cannot be converted to Roth.
For more information, visit https://www.tsp. gov/making-contributions/traditional-and-roth- contributions/.
When Do I Have to Take My Money Out of the TSP?
You never have to take all your money out of the TSP! When you separate from federal civilian or uniformed services, you can keep your money in the TSP for the rest of your life. You’ll continue to take advantage of the TSP’s low-fee funds while your savings grow. And you still can move money from other eligible plans to an existing TSP account.
At a certain age, you will need to start taking IRS-required minimum distributions (RMDs). Visit tsp.gov for more information.