2022 AFBA Financial Planning Guide

dependents as a result of assignment to permanent duty outside the United States. This allowance contains four separate components: 1) Cost of Living Allowance (COLA); 2) Overseas Housing Allowance (OHA); 3) Temporary Lodging Allowance (TLA); and, 4) Interim Housing Allowance (IHA). The amount of each of these allowances varies geographically because the excess costs upon which they are based vary from one foreign locality to another. Temporary Lodging Expense (TLE). Temporary Lodging Expense is designed to partially offset the lodging and meal expenses incurred by active duty personnel and/or their dependents when it is necessary to occupy temporary lodgings in conjunction with a permanent change of station (PCS). The allowance is payable for a limited period of time — up to ten days in connection with a CONUS PCS and up to five days in conjunction with a PCS to a duty station outside CONUS. 1–5. ACCESS TO YOUR PAY ACCOUNT. MyPay is a great tool to help members of the military, defense civilians, retirees, and annuitants manage their pay. This tool lets you make changes to your pay account information online at anytime at mypay.dfas.mil . MyPay allows you to view your LES, adjust the amount of your federal and state tax withholdings, change direct deposit accounts for your monthly pay, etc. Features vary slightly by service and status. 1–6. THRIFT SAVINGS PLAN (TSP). The Thrift Savings Plan is an optional retirement investment program that is similar to 401(k) plans administered by many private corporations. Active, reserve, and guard members can contribute to the plan from their military pay and are entitled to keep both their contributions and additional earnings regardless of whether they leave the service prior to retirement or actually retire from military service. On www.tsp.gov , you can access your investment account, get current information on the performance of various funds, find retirement planning information, and more. Enrollment and Member Contributions. If you are a member of the uniformed services who is not covered by the Blended Retirement System (BRS), your account is established by your service after you make a contribution election using your service’s automated system such as myPay. If your service does not use an electronic system, you can complete

form TSP-U-1. These forms can be downloaded at www.tsp. gov . You may sign up to contribute to the TSP at any time. If you are a BRS member who began or rejoined service after October 1, 2020, your service automatically enrolled you in the TSP, and 5% of your basic salary is deducted from your paycheck every pay period and deposited into the traditional balance of your TSP account unless you made a contribution election to stop or change your contributions. If you are a BRS member who stopped your contributions during the year, you are automatically re-enrolled at 5% of your basic pay on January 1. If you are a BRS member who began or rejoined service between August 1, 2010 and September 30, 2020, you were automatically enrolled at 3%. You may invest up to 100 percent of your basic pay each pay period. Contributions are limited only by the restrictions imposed by the Internal Revenue Code. For 2022 tax rules limit the annual dollar amount that can be contributed to $20,500. If you are age 50 or older and are already contributing the maximum amount of regular TSP contributions, you may elect to make up to $6,500 in additional “catch–up” contributions. If you contribute to the TSP from your basic pay, you may also contribute up to 100 percent of any incentive, special, or bonus pays that you earn. You may start, stop, or change your contribution at any time. You can not invest any allowances (BAS, BAH, etc.) that you receive. Service Automatic and Matching Contributions. If you are covered by the BRS, your service will automatically contribute an amount equal to 1% of your basic pay into your TSP account each pay period. This does not come out of your pay. If you elect to contribute a portion of your pay, your service will match dollar to dollar up to 3%. For every dollar beyond 3% and up to 5%, your service will contribute 50 cents. So if you contribute 5%, you will receive a 4% matching contribution plus 1% automatic for a total of 5% from your service. There is no service contribution if you are under the traditional retirement system. Investment Options. The TSP provides six mutual fund investment opportunities: a. Lifecycle Fund — L Fund. These funds are invested in the individual funds shown above. The specific mix is chosen based on the date when you will need your


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