1. FINANCIAL MANAGEMENT
Element 42

2. Purpose
To inform the member of the financial resources available to help with transition.

3. Thrift Savings Plan (TSP) OVERVIEW
TSP Questions to ask your Sailors
Are you contributing to TSP?
Do you know how to start contributing to the TSP?
Do you know the difference in Roth/Traditional TSP?
Do you have a TSP account?
Do you know where your funds are invested?

4. MyPay and TSP
Start or Stop my TSP
Increase or decrease my TSP
Choose Roth or Traditional
Change my address

5. Tax Treatment Options Taxes deferred Taxes paid upfront
Taxable when withdrawn
Taxes paid upfront
Tax-free earnings when withdrawn
Traditional
Roth

6. Index-Based Funds

8. Lifecyle (L) Funds

9. Two Investment Approaches

10. Leaving the Military and TSP
Leave funds in the TSP, if more than $200. If less than $200, TSP will automatically send a check for the amount in the account.
Transfer to IRA or other plan
Contribute via transfer
Withdraw funds (Partial and Full Withdrawals)
59 1/2
Withdrawals without 10% penalty
April 1st of the following year: 70 1/2
Required minimal distributions

11. TSP optional to supplement
Thrift Saving Plan
TSP optional to supplement
retirement income
Defined-Contribution Plan, similar to 401(k) program
Contributions are from the employee
A portion may/may not be matched by employer
Each participant has an individual account
The benefit at retirement depends on amounts contributed + investment performance of account
Investment risk may rest solely with the employee due to opportunity to choose from a number of investment options

12. Legacy Retirement System
-Defined annuity benefit (pension) computed as 2.5% X Years of Service X Retired Base Pay - Must serve at least 20 years *Retired base pay is an average compilation of the pay that the service member received at their highest rank, for consecutive 36 months. Example: An 0-5 grade who served 20 years with a retired basic pay of $8, % X 20 years X $8,500 = $4,250 monthly pension

13. Blended Retirement System
Combines the legacy 20-year military retirement system with a defined contribution plan, known as TSP.
Computed as 2.0% X Years of Service X Retired base pay
Example: An 0-5 grade who served 20 years with a retired basic pay of $8,500.
2.0% X 20 years X $8,500 = $3,500 monthly pension

14. 4 Major Changes
Automatic 1% DoD contributions after 60-days of military service for 26 years after entry date.
DoD will match service member’s contribution up to 4% additional matching contributions after two-years of service to the member’s TSP account.
New service member will be automatically to contribute 3% of their basic pay.
Invest contributions in an “age appropriate” lifecycle (L) fun rather than (G) fund, unless members choose otherwise.

15. Mid-career incentive designed to maintain force retention
After 60 days
After 2 years
Continuation Pay
Mid-career incentive designed to maintain force retention
Payable after 12 years of service
Minimum is 2.5 x monthly basic pay (0.5 x for RC)
Lump Sum
May elect lump sum of 25% or 50% at retirement
Discounted present value from retirement to age 67
At age 67, reverts back to full annuity

16. Who is Affected? If serving as of December 31, 2017:
GRANDFATHERED in current retirement system
NO ONE will be automatically moved to BRS
Many currently-serving members eligible to opt into BRS
Active: Fewer than 12 years of total service as of Dec. 31, 2017
Reserve: Fewer than 4,320 retirement points as of Dec. 31, 2017
Eligible members have all of CY 2018 to make their decision
Member wants to stay covered under current system – do nothing
Member decides BRS is better – can opt in
New accessions on or after January 1, 2018 covered by BRS

18. Survivor Benefit Plan (SRP)
The Survivor Benefit Plan (SBP) was established by Congress to provide monthly income to survivors of retired military personnel upon the member’s death when retired pay stops.
It pays your eligible survivors an inflation-adjusted monthly income.
A military retiree pays premiums for SBP coverage upon retiring.(Automatic election if no election is made)
The maximum SBP annuity for a spouse is based on 55 percent of the member's retired pay, smaller amount may elected.

19. SBP cont…
Eligible children receive benefits only when the spouse dies and equally divide a benefit that is 55 percent of the member's elected base amount.
Coverage is also available for a former spouse or, if the retiree has no spouse or children, for an "insurable interest" (such as a business partner or parent).
- Designed to protect member’s retired pay against member’s early death, the survivor outliving the benefits, and inflation.

20. CAUTION! If you are married and decline SBP at retirement, you will not be eligible to later cover that spouse, or cover a new spouse should this marriage end in death or divorce and you later remarry. To be eligible to provide SBP coverage for a later acquired spouse, you must elect coverage for your spouse at retirement.

21. Indirect Compensation
Medical care/Dental
BAH/BAS
State/Local Tax Advantage
Serviceman’s Group Life Insurance (SGLI)

22. Indirect Compensation cont…
Commissary and NEX
Education Programs (TA,NavyCool)
Fleet and Family Programs/Legal Counselling
Space Available Travel/Gym Membership

23. Navy ePFM TGPS/Capstone Command Financial Specialist
PFM at Fleet and Family Support Center
For Guard and Reservist not located near a military installation, Military OneSource can offer assistance

24. Local Resources:
Command Financial Specialist (CFS)

25. Resources: http://military pay.defense.gov/Calculators/RMC-Calcular/
TSP: or the Thriftline at
TSP forms:
BRS Info:
SBP: program/

26. Questions?