Thrift Savings Plan registration is open through June 30
YONGSAN GARRISON, South Korea — Through the end of June, servicemembers can enroll in the federal retirement and savings investment plan that offers tax-deferred savings, according to the 175th Finance Command.
This year, servicemembers can contribute up to 9 percent of their base pay and up to 100 percent of incentive or special pay into the Thrift Savings Plan to a maximum of $13,000. In 2005, servicemembers will be able to contribute up to 10 percent of base pay.
The plan offers retirement income depending on contributions during a person’s working years and the earnings on those contributions. The plan offers the same kind of savings and tax benefits that private companies offer with a 401(k) savings plan. It’s an optional plan servicemembers can choose to sign up for.
However, signing up for the plan can be done only during certain times. Servicemembers can enroll now through June 30 by contacting the Finance Command.
Plan participants may be eligible for two types of loans: a general-purpose loan and a residential loan. The loans borrow from a person’s contribution savings and are repaid — with interest — to the same account.
Starting July 1, three changes will take effect for the loan program:
A $50 fee will be charged for each new loan. The fee will be deducted automatically from the amount of each new loan, according to the 175th Finance Command.Members no longer will be able to have two general-purpose loans at the same time. Under the current program, a person can have a general-purpose loan and a residential loan at the same time or two general-purpose loans.A person won’t be eligible to apply for another loan until the 61st day after the original loan is paid off.The retirement program reported a 50 percent increase in the number of approved loans in 2003 over 2002, according to the 175th Finance Command. More than 300,000 loans were approved during 2003; more than 500,000 members have outstanding loans now.
About 25 percent of members with loans request a new one within 60 days after paying off the original loan.