Do I Need to Know about The Thrift Savings Plan?
DO I NEED TO KNOW ABOUT THE THRIFT SAVINGS PLAN?
The short answer of course is…yes. But first, what is the Thrift Savings Plan?
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. It was established by Congress in the Federal Employees’ Retirement System Act of 1986 and offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans.
The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency, if you are eligible to receive agency contributions) put into your account during your working years and the earnings accumulated over that time.
Now…back to the question…Do I need to know about TSP? Well, if your soon-to-be ex-husband has been investing his income in this retirement plan, you need to know about it so that you can be sure to claim your marital share in any divorce action. The TSP contributions are taken from pre-tax dollars and any earnings on these contributions are tax-deferred. This means that your ex’s paycheck had been reduced with pre-tax contributions – and you want to be sure to claim your marital share for your own retirement.
Two final points here:
1) After 2005, a servicemember had the option of signing up and contributing up to 100% of his or her basic pay…ALL pre-tax; and
2) If you are interested in learning more about TSP, check out the government’s website: www.tsp.gov.
There are very specific rules governing divorce in Virginia. At Hofheimer Family Law Firm we are committed to providing you with the experience and compassion you deserve and the successful results you need to move on with your life. Request a FREE copy of our divorce guide for women in Virginia, or reserve your seat at our monthly divorce seminar – 757-425-5200.