In this episode of theSITREP, Paul covers Thrift Savings Plan beneficiaries. Paul is joined by U.S. Air Force Veteran, Mike Jerue, who serves as the Deputy Chief Investment Officer at Thrift Savings Plan.

Listen to the complete Thrift Savings Plan Podcast here:

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ADDITIONAL THRIFT SAVINGS PLAN VIDEOS

What is Thrift Savings Plan

Pension vs. Thrift Savings Plan

Contributions with Thrift Savings Plan

Thrift Savings Plan After Government Service

How to Set-Up Your Thrift Savings Plan

IRA & Thrift Savings Plan Contributions

Thrift Savings Plan Beneficiaries

Thrift Savings Plan Contributions After Service

Roth vs. Traditional Thrift Savings Plan

IRA vs. Thrift Savings Plan

403b vs. Thrift Savings Plan

Thrift Savings Plan Rollovers

Are TSP Contributions Tax Deductible

401k, 457 & 403b vs. Thrift Savings Plan

TSP Maximum Contributions

Individual Funds (G, F, C, S, I Fund) & TSP

TSP L Funds

TSP Retirement Calculators

Roth vs. Traditional Withdrawals

How to Change TSP Contribution Amounts

Thrift Savings Plan Loans & Withdrawals

Age to Withdraw TSP

Thrift Savings Plan Vesting Period

(RMDs) Required Minimum Distribution & TSP

TSP After DoD Service

TSP Company Holdings

Thrift Savings Plan DoD Rollover

How to Access Thrift Savings Plan

Retroactive Contributions to TSP

Catch-Up Contributions with TSP

Changing Contributions with TSP

Thrift Savings Plan Mutual Funds

THRIFT SAVINGS PLAN TOPIC LINKS

For TSP overview, visit:

For TSP contributions, visit:

For TSP L Funds, visit:

For TSP investment funds, visit:

For TSP rollovers, visit:

For TSP holdings of companies, visit:

For TSP mutual fund window, visit:

For TSP annuity, visit:

For TSP required minimum distribution (RMD), visit:

For TSP loans, visit:

For TSP hardship withdrawals, visit:

For TSP death benefits, visit:

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Thrift Savings Plan Beneficiaries: What You Need to Know

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and members of the uniformed services. It offers a range of investment options, including stock and bond funds, to help individuals save for their future. In the event of an account holder’s death, TSP beneficiaries play a crucial role in ensuring that the funds are distributed properly and according to the deceased’s wishes.

Who Can Be a TSP Beneficiary?

TSP beneficiaries can be anyone chosen by the account holder to receive the funds in the event of their passing. This can include family members, friends, or even charitable organizations. When enrolling in the TSP, participants have the option to designate one or more primary beneficiaries and alternate beneficiaries.

Primary beneficiaries are the first in line to receive the account funds upon the account holder’s death. If the primary beneficiaries have already passed away, or if they refuse or are unable to accept the funds, alternate beneficiaries come into play. It’s important to keep beneficiary designations up to date to ensure that the intended individuals or organizations receive the funds when the time comes.

What Happens When a TSP Account Holder Dies?

Upon the death of a TSP account holder, the TSP beneficiary or beneficiaries need to take several steps to claim the funds:

1. Contact the TSP: The first step is to notify the TSP of the account holder’s death. This can be done by filling out and submitting the appropriate forms, such as the TSP-17 (Information Relating to Deceased Participant) and the TSP-3 (Designation of Beneficiary).

2. Gather necessary documents: The TSP will require certain documents to process the beneficiary claim. These may include a certified copy of the account holder’s death certificate and identification documents for both the deceased and the beneficiary.

3. Choose a withdrawal option: Depending on the account balance, beneficiaries may have different options for withdrawing the funds. They can choose to receive a lump sum distribution, set up a monthly payment plan, or transfer the funds to an inherited IRA.

4. Consider tax implications: It’s essential to be aware of the tax implications of TSP distributions. While beneficiaries can defer taxes by transferring the funds to an inherited IRA, receiving a lump sum distribution may result in tax liability.

The Importance of Regularly Updating Beneficiary Designations

Life circumstances can change, and it’s crucial to ensure that beneficiary designations remain up to date. Major life events like marriage, divorce, birth, or death in the family should prompt a review of beneficiary designations to reflect the account holder’s current wishes.

If a TSP account holder fails to designate a beneficiary or if all designated beneficiaries pass away before the account holder, the account becomes part of their estate. In this case, the TSP will distribute the funds to the account holder’s legal heirs according to the laws of their state of residence.

In conclusion, TSP beneficiaries play a critical role in ensuring that the funds are distributed properly upon the account holder’s death. By designating beneficiaries and keeping their designations up to date, account holders can have peace of mind knowing their loved ones will receive the financial support they need when the time comes. Regularly reviewing and updating beneficiary designations should be a part of an individual’s overall retirement planning strategy.