Thrift Savings Plan?

Question

If my husband gets out of the Army, but doesn't retire, what are the options for the money we have invested in his TSP? Can it rollover to an IRA? And if we do that, do we lose the tax benefits on the money he contributed while in a combat zone?

Answer 1

the money he contributed to the TSP will be "tax exempt" when he takes it out of the TSP (because like a 401K the money that went into TSP is not taxed when it's put in anyway so combat contributions are not taxed when they are withdrawn)

When he gets out you can not put anymore in to TSP unless you get a government job but there are still no fees and you can leave the money in there until you retire (reach retirement age).

I think you should leave it in.

Answer 2

The TSP is also offered to the Reserve Component. If he decides to go back in to the Reserve Component or drills for points (IRR) or goes into Federal Service; he can continue to add to the program.

You have the options on distributing the funds in the accounts even when you are no longer contributing.

Your tax benefit for the yearly right off is not allowed since he has a pension plan (yeah at the end of 20 years). That goes for other 401K plans. However, if you do not have a 401K you can still contribute and use that for your taxes if you are filing jointly.

Answer 3

once a mbr gets out of the service you can rollover the TSP to an 401 k or IRA...being in a combat zone only lasts until the end of the month he comes home..however, for taxes he would claim that for the whole year.

Answer 4

Here is an excellent site to go to that will explain to you what you can do once he gets out of the Army. If I am not mistaking, you have the option of rolling it over into a 401K.

Answer 5

Leave the money in there. If he getws another government job he can continue to contribute. I'm retired and I'm glad I did.