“One of the finest retirement plans in the world!” Thrift Savings Plan “One of the finest retirement plans in the world!” Presented by Tamra Ivanoff, AFC® Personal Financial Counselor Updated February 2016

Agenda Thrift Savings Plan overview Enrollment and participation Contributions Roth TSP Investment funds and options Withdrawals and loans Contact information

What is the Thrift Savings Plan? Government-sponsored retirement plan Open to all uniformed service members Similar to 401(k) plan Defined contribution plan

Why Sign Up? Pre-tax/tax-deferred options Choose your investment options Easy to contribute with automatic deductions Take your money with you if you transition… …or keep it in TSP until you retire

Enrollment and Your Account mypay.dfas.mil Ensure DFAS has current mailing address! Personnel Office: Form TSP-U-1 Account # Web password ThriftLine PIN Access through: www.tsp.gov ThriftLine Designate Beneficiary: Form TSP-3 Distribute benefits: Form TSP-17 Account Access Enrollment Beneficiaries

Making Contributions Two types: Regular (including automatic enrollment) Catch-up (after age 50) 1-100% of incentive/special/bonus pay with contribution from basic pay Contributions from tax-exempt pay also tax-exempt No matching option

Contribution Limits 1-100% Incentive, Special, Bonus Pay Elective Deferral Limit ($18,000 in (2016) Traditional and Roth contributions Elective limit does not apply to traditional contributions made from tax-exempt pay earned in a combat zone

TSP Investments What are my retirement needs? What is my time horizon? How much risk am I willing to accept? How much risk am I able to accept? How much diversification do I need?

Roth TSP Contributions are after-tax Withdrawals allowed IF: Five (5) years have passed since Jan 1 of first contribution year, AND You are 59 ½ or older, permanently disabled, or deceased.

Individual Funds Fund Description Volatility Current as of April 2015 10-Year Compound G Government Securities Low 3.19% F Government, Corporate, and Mortgage-backed Bonds Relatively Low 4.89% C Stocks of large and medium-sized U. S. Companies Moderate 7.72% S Stocks of small to medium-sized U. S. Companies not included in the C Fund Moderate to High 9.44% I International Stocks of developed countries 4.58% Current as of April 2015

Lifecycle (L) Funds Fund Description L 2050 Annual returns L 2050 Time Horizon for use of funds—2045 or later 6.37% L 2040 Time Horizon for use of funds—between 2035 and 2044 6.22% L 2030 Time Horizon for use of funds—between 2025 and 2034 5.74% L 2020 Time Horizon for use of funds—between 2015 and 2024 5.06% L Income Funds used currently 3.77% Current as of April 2015

L Fund Allocation Targets

Which Investment Approach? Professionally determined mix Lifecycle Fund Based on Time Horizon Seeks best asset mix Review on annual basis Reallocate mix with age Or… Self-Determined Fund Mix L Fund

How Much Can You Save with the TSP? 20 years from now* 30 years from now* 40 years from now* If you contribute… $30 per month $13,860 $30,135 $59,745 $20,790 $45,200 $89,615 $55,445 $120,540 $238,980 $97,030 $210,950 $418,215 $110,890 $241,085 $477,955 $45 per month $120 per month $210 per month $240 per month *All figures assume a 6% annual rate of return compounded monthly 

After Your Military Service Funds can remain in TSP. Funds can be transferred to an IRA or other eligible plan. Contributions can be made via transfers. Funds can be withdrawn.

In-Service Withdrawals Financial hardship or age-based ! Money is not repayable – when it’s gone, it’s gone! ! Age-based withdrawal subject to 20% income tax ! Hardship withdrawals also subject to income tax and10% age penalty ! Cannot contribute to TSP for six months afterward

Withdrawal Options After age 59 ½ , your withdrawal options include: Single “Lump Sum” Payment Series of monthly payments Annuity Or— Leave the money in TSP Transfer the money to an IRA or an employer’s plan Withdrawals must begin by age 70 ½ or the year you separate if you’ve reached 70 ½.

TSP Loan Program General Purpose or Residential $1,000 – $10,000/$50,000 (depending on TSP account balance) 1-5 year repayment term Repayment must begin within 60 days of disbursement $50 loan fee Fixed interest rate (G Fund)

TSP Contact Information Thrift Savings Plan Website: www.tsp.gov TSP ThriftLines: 1-TSP-YOU-Frst (1-877-968-3778) 1-TSP-Thrift5 (1-877-847-4385) TDD Personal Financial Counselor at your Military Family Center

Summary Questions? Thrift Savings Plan overview Enrollment and participation Contributions Roth TSP Investment funds and options Withdrawals and loans Resources Questions?

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