Do you know who your beneficiary is for your TSP account? Are you sure?

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You may know who is on the last Form TSP-3 you filed, but the TSP might not. My instructors and I have heard from some of our pre-retirement course participants that the TSP no longer has their TSP-3 on file. Others said that the beneficiary information on the website is correct for their primary beneficiary, but not for contingent beneficiaries.

In fact, the Thrift Savings Plan admitted that 266,000 beneficiary designations were intentionally not transferred to the new system due to “data quality issues”. Then they cryptically say that those beneficiary forms remain on file.

Don’t assume your beneficiary information is correct. Here are some things you can do:

· If you have not yet set up your new TSP account, do so immediately;

· Check if your beneficiary designations are correctly recorded in the account;

· Take steps to update your TSP-3 if your designations are not correct.

If you do not have a beneficiary form on file, if your account needs to be updated, or if your designated beneficiary predeceased you, you can submit a new TSP-3. The TSP-3 can be found under Forms | The Thrift Savings Plan (TSP), although you may need to be patient with the website. The Thrift Board still doesn’t have everything set up on the website and working as it should. Once on the TSP-3 link, you will have the choice of downloading the form or using a “wizard”. TSP Form Wizards are an easy way to complete any TSP form; they ask you relevant questions and, based on your answer, they take you to the next part that needs to be completed. With a wizard, you no longer have to worry about exactly which parts of the form you need to fill out and which you leave blank. If you need to have the form notarized (which is common with TSP forms), you will be able to print a completed form which you can then take to a notary.

What if you don’t have a TSP-3 on file or it was “lost” when transitioning to the new system. If so, the Thrift Savings Plan will follow the standard order of priority to determine who will receive your TSP funds after your death. The TSP will not pay any attention to the wishes you have expressed in a will or in a trust. It is a rule in estate planning that beneficiary forms (or the standard order of precedence) will supersede any other stated wishes. After your designated beneficiary, the standard order of priority for federal benefits is:

· Surviving spouse;

· Children (by agitation) (stepchildren are not included unless formally adopted);

· Parents (step-parents are not included unless they have officially adopted you);

· court-appointed executor or administrator of the estate;

· Next of kin (based on state law).

On the TSP-3, like on most beneficiary forms, you have the option of naming prospective beneficiaries who will receive the funds if the named beneficiary predeceases you. You also have the option of naming multiple beneficiaries. If you choose, make sure the total adds up to 100%.

If your beneficiary is:

· Your federally employed or retired spouse, they can transfer your TSP account to theirs, choose an inherited IRA, or withdraw the money.

· Your self-employed or federally retired spouse, they can take ownership of your TSP account, choose an inherited IRA, or withdraw the money. If they choose to take ownership of your account, the TSP will create a beneficiary participant account for them. The initial allocation in a beneficiary participant account is in the age appropriate L fund.

– A non-spouse, he/she can choose an inherited IRA or withdraw the money. The SECURE Act has limited the “stretch IRA” for almost all non-spouse beneficiaries who must now fully deplete the account within ten years.

You have saved throughout your career for retirement. You want to be sure that, if you don’t live long enough to spend your TSP, that someone or people of your choice get what’s left.

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