Thrift Savings Plan Update

TSP NOTICES
– 2024 tax forms: IRS Forms 1099-R wll be mailed by January 31, 2025.
– 2024 annual statements: “In February, participants will receive annual statements based on the delivery method” in their online account (My Profile, Manage Communications).
– 2024 tax cutoff date: Withdrawals requested after noon eastern time on December 27, 2024 (Friday), will be reported to the IRS as income for 2025.

NEWS
FedWeek recently reported that TSP to Offer In-Plan Roth Conversions in 2026. An in-plan conversion allows a participant to transfer all or part of their assets from a traditional balance to a Roth account within the same plan. One advantage is that Roth accounts are not subject to Required Minimum Distributions (RMD). However, income taxes on part or all of the distribution must be paid in the tax year in which the funds are rolled over into a Roth account.

FEdSmith also covered this development in their article TSP News: Roth Conversions and I Fund Changes. Additionally, they discussed increased contribution limits for 2025, the change to the index used for the I Fund, delivery of documents by email and how TSP accounts have performed in 2024.

RESOURCES
For details on furture goals and objectives, read the Federal Retirement Thrift Investment Board’s FY2022-2026 Strategic Plan. The FRTIB administers the TSP.

TSP booklets related to these topic include In-Service Withdrawals (for active employees and military), Distributions: Installments, Total and Partial Distributions, Life Annuities (for separated/retired and beneficiary participants) and Tax Rules About TSP Payments, all updated in 2024.