According to a report in the Federal Times, servicemembers and federal civilians whose pay is handled by Defense Finance and Accounting System (DFAS) will have to wait to begin using the Thrift Savings Plan's new Roth option.

Unlike the other TSP investment programs which invest payroll dollars before they are taxed, the TSP Roth option allows members to invest after-tax dollars. Roth investments are popular because they offer investors the chance draw on their retirement dollars tax-free. This option can be especially attractive to those service members who currently have a lower tax rate.

The TSP Roth will be made available to most federal employees Thursday, May 7; however, DoD civilians who are paid through DFAS won't be able to enroll until July. Marines will be able to enroll in June. Soldiers, Sailors, and Airmen won't be able to take advantage of the new TSP Roth investing option until October.

According to the Coast Guard Pay and Personnel Center, Coast Guard personnel will be able to submit TSP Roth enrollment/contribution requests May 7.

Coast Guard Roth TSP deductions can be managed in Self Service (after PPC establishes the initial deduction), just like Traditional TSP deductions.

David McDermott, DFAS deputy director of operations, told the Federal Times that the delay is due to the fact DFAS has to make sure it keeps pre-tax and post-tax investments separate as it works with computer systems throughout the Defense Department and a handful of other agencies,.

When the Roth option becomes available, service members will be able to use the MyPay system to select the TSP Roth option.

For more information visit the website at:

http://militaryadvantage.military.com/2012/05/access-to-new-tsp-roth-del...