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Sat Jun 28, 2014, 06:06 AM

Many in military using Roth TSP to save for retirement

http://www.thenewstribune.com/2014/06/28/3265745/many-in-military-using-roth-tsp.html?sp=/99/261/

Many in military using Roth TSP to save for retirement
By TOM PHILPOTT
Contributing Writer
June 28, 2014

Military savers are discovering the special advantages a Roth-type Thrift Savings Plan provides to them, given that their taxable income is dampened by tax-free allowances and periodic tax-exempt combat tours.

The Roth TSP choice became available only in May 2012. TSP account balances so far average only $2,500 for all uniformed personnel. But the military participation rate in Roth TSP tells the tale. While uniformed personnel have 15 percent of all TSP accounts, they are 46 percent of Roth TSP participants.

“When we were preparing to launch the Roth TSP option, we anticipated it would be particularly attractive to our military participants,” said Kim Weaver of the Federal Retirement Thrift Investment Board, which administers TSP for federal civilian workers and the military.

Service members “generally are lower paid and so don’t benefit as greatly from a traditional pre-tax/tax-deferred option. But allowing them to contribute after-tax dollars that can grow for decades and that can accept tax-exempt combat pay, is very attractive to military participants.”

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