The Thrift Savings Plan has gone to “two-step authentication” when you log in to your account. When you log in to your account the TSP will send you an email and/or a text with a code that you must enter in order to get to your account. This requires you to verify your email address and mobile phone number in the “Profile Settings” in your account. Though you may have a phone number and email address as part of your account, they will still need to be verified. Take some time to verify these items before your next withdrawal.
Last call to make a withdrawal
Speaking of that next withdrawal, the end of the year is upon us. Withdrawals processed through December 27th will be considered 2019 income. Any withdrawals processed December 30th and 31st will be considered 2020 income. Depending on when you are reading this article, the ship may have already sailed for 2019 withdrawals. It’s always best not to wait until the last minute to take actions; especially actions that might have tax consequences.
The TSP as Political Football
In the past legislation has been introduced to add a Real Estate Investment Trust (REIT) fund to the TSP, and one to offer a fund that does not invest in fossil fuels. The latest attempt by politicians to meddle with TSP investments doesn’t involve legislation. Several politicians are trying to strong-arm the Thrift Board to get it to not implement certain changes to the I Fund.
The Board has planned on changing the index followed by the I fund from one that consists of developed markets (MSCI EAFE) to one that has a much broader base (MSCI All World). The problem is that China makes up part of the All World index. When the Thrift Board, after taking time to consider the request, reiterated its intent to make the change, Marco Rubio actually asked President Trump to fire the Thrift Board. What happened to simply introducing a bill to make the change and seeing if it passes? It’s a shame when bluster and bombast replace the legislative process but that’s where we are at the end of 2019.
Required Minimum Distributions
Those of you who turn 70 ½ in 2020 will be required to take certain required minimum distributions (RMDs) from your TSP (as well as other qualified plans and traditional IRAs). There is an exception to this rule as it regards the TSP for those who are still working at their federal job. Be aware that your first RMD can be delayed until April 1 of the year after the year that you turn 70 ½. But, all subsequent RMDs have to be taken by December 31st. So, an individual who turned 70 ½ in August of 2020 (turned 70 in February) could wait until April 1, 2021 for their first RMD, but would have to take another RMD by December 31, 2021.