Author Topic: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund  (Read 1865 times)

Dragonstrike

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Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« on: January 29, 2018, 10:53:21 PM »
Quick question because Google failed me here:

If I'm military and I have both a TSP Funded Roth, and a personal Roth VTSAX fund through Vanguard, am I in trouble?

I contribute $5,500 a year to my Vanguard Roth fund and for the TSP Roth, I just contribute 10% of my paycheck with now matching up to 5% base pay through blended retirement system (under 4k a year).

Any advice much appreciated.

Sailor Sam

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #1 on: January 29, 2018, 11:15:14 PM »
Quick question because Google failed me here:

If I'm military and I have both a TSP Funded Roth, and a personal Roth VTSAX fund through Vanguard, am I in trouble?

I contribute $5,500 a year to my Vanguard Roth fund and for the TSP Roth, I just contribute 10% of my paycheck with now matching up to 5% base pay through blended retirement system (under 4k a year).

Any advice much appreciated.

By ‘trouble’, I assume that you’re worried you’ve over contributed, or double contributed to your retirement accounts. You’re actually fine. You’re allowed to contribute to both your TSP and your IRA each year. Good job making out the IRA, ad putting 10% into your TSP. The new and magical 5% matching is pretty cool, eh?

Next task, tell us what funds you picked out for your TSP contributions. The default is the G fund, and that (probably) won’t match inflation.

Dragonstrike

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #2 on: February 01, 2018, 11:36:11 AM »
I was doing a g to S fund strategy but currently in the c fund now.

Nords

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #3 on: February 03, 2018, 10:00:03 AM »
If I'm military and I have both a TSP Funded Roth, and a personal Roth VTSAX fund through Vanguard, am I in trouble?

I contribute $5,500 a year to my Vanguard Roth fund and for the TSP Roth, I just contribute 10% of my paycheck with now matching up to 5% base pay through blended retirement system (under 4k a year).
As Sam says, you're fine.

You can contribute up to $18,500 to your TSP in 2018.  The BRS's matching contributions do not count against that $18.5K elective deferral limit.  The $18.5K can be split any way you want between your Roth TSP account and your traditional TSP account as long as you don't exceed the $18.5K total.

You can also contribute contribute up to $5500 to your IRAs in 2018.  That $5500 can be split up any way you want between your Roth IRA and your traditional IRA as long as you don't exceed $5500.  If you have a non-working spouse then you could also contribute up to $5500 to their IRA also.

The only interlock between the $18,500 limit and the $5500 limit is that your contributions to your TSP and your IRAs cannot exceed the amount of your earned income.  If your earned income is at least $24K then you're fine. 

Be aware that the DoD BRS matching contributions will, by federal 401(k) law, go into your traditional TSP account.  That's in paragraph 7.b.(12) on PDF page 18 of the implementation policy document:
http://militarypay.defense.gov/Portals/3/Documents/BlendedRetirementDocuments/Combined%20BRS%20Policy%20Document.pdf?ver=2018-01-02-105828-370

Omaha420402

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #4 on: February 18, 2018, 05:27:18 PM »
Any idea of when the government match starts? I opted in to the BRS on 01JAN18 with 5% and have yet to see the government's matching contributions. Is this published anywhere?

Thanks

Sailor Sam

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #5 on: February 18, 2018, 05:39:57 PM »
Any idea of when the government match starts? I opted in to the BRS on 01JAN18 with 5% and have yet to see the government's matching contributions. Is this published anywhere?

Thanks

From the guidance given to USCG last friday: "Matching TSP funds will start the first pay period after an officer opts in. Therefore, those who opted in to BRS in January will see their first TSP 1% and matching post in February. Although we get paid twice a month, pay for service members are processed monthly."

Somewhere on you Leave & Earning Statement you should see the word "blended."

Nords

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #6 on: February 18, 2018, 05:42:24 PM »
Any idea of when the government match starts? I opted in to the BRS on 01JAN18 with 5% and have yet to see the government's matching contributions. Is this published anywhere?

Thanks
For those servicemembers who’ve opted in to the military Blended Retirement System but have not yet seen a January TSP contribution, we have clarification.

We’ve heard back from the DoD BRS office and we’re going to hear more outreach in the coming weeks.  Hat tip to Airmen MilDollar of the MilitaryDollar site for chasing this down.  They wrote most of this post and I’ve added some clarifications/links.

Just to reiterate what most people already know, the military is paid in arrears.  The January mid-month pay deposit is technically an advance on the full pay deposited at the end of January.  When that January LES is published, it’s predicting the end of the month.  Those who contribute to their TSP accounts (which is less than half of the military) will also see on their January LES that money is being sent to the TSP.  The TSP’s “January” contribution leaves your pay account at the end of January and ends up in the TSP in early February.  It’s all reported correctly on tax forms at the end of the year.

For those of you wondering about the January government contributions (1% automatic and another 4% matching) and why you did/did not receive them:
The BRS training and implementation documents all say something along the lines of "You will receive the Service Automatic (1%) Contribution, and Service Matching Contribution proportionate to your basic pay contributions, on the first pay period after opting in."
http://militarypay.defense.gov/Portals/3/Documents/BlendedRetirementDocuments/Combined%20BRS%20Policy%20Document.pdf?ver=2018-01-02-105828-370
Since opt-in was first allowed in January, this would explain why many people didn't receive January contributions - they should start receiving them in February (with DoD’s BRS matching TSP contributions going into the TSP in early March). However, the NDAA 2016 law actually says:
"The Secretary concerned shall make a contribution...for any pay period during the period that begins...on or after the date the member makes the election."

The NDAA law means that anybody making their opt in election on January 1st (or Feb 1st, Mar 1st, etc) should receive government contributions for that month **because you made the election ON the day the pay period begins.** Anybody opting in later in the month has to wait until the following pay period.

Hopefully that explains why some people received the January contributions and others didn't.

***********************************************************************

For those of you that think you should have received January contributions and didn't:
If you match ALL of the following criteria and are interested in having your situation looked at, please contact me or Airmen MilDollar privately.  We’ll ask the BRS office to dig deeper into your pay record and fix what’s broken.  If you don't meet ALL of the criteria, this does not apply to you.
1. You think you opted in between 0000 and 2359 EST on January 1st - AND -
2. You have confirmed you did NOT receive government contributions for January - AND -
3. You are willing to pass me your full name, branch of service, and (optional) approximately when you opted in (date and time, with the time zone if not already EST).

Personally, I’m already passing my daughter and son-in-law’s names to DoD’s BRS office.

Kierun

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Re: Military-Having a Roth TSP and a Vanguard Roth VTSAX Fund
« Reply #7 on: February 20, 2018, 09:35:09 AM »
Quick question because Google failed me here:

If I'm military and I have both a TSP Funded Roth, and a personal Roth VTSAX fund through Vanguard, am I in trouble?

I contribute $5,500 a year to my Vanguard Roth fund and for the TSP Roth, I just contribute 10% of my paycheck with now matching up to 5% base pay through blended retirement system (under 4k a year).

Any advice much appreciated.

By ‘trouble’, I assume that you’re worried you’ve over contributed, or double contributed to your retirement accounts. You’re actually fine. You’re allowed to contribute to both your TSP and your IRA each year. Good job making out the IRA, ad putting 10% into your TSP. The new and magical 5% matching is pretty cool, eh?

Next task, tell us what funds you picked out for your TSP contributions. The default is the G fund, and that (probably) won’t match inflation.

The default fund is no longer the G fund, but is now one of the lifecycle funds based on your standard retirement age, since they realized most people don't know or bother to go into TSP and change their allocations.