TSP Special Loan Authorization Deadline Approaches


September 22 is the deadline to use a special TSP loan authorization that was enacted earlier this year as part of the Cares Act pandemic relief act, although several other authorities created under this law will continue throughout the calendar year.

The law has increased the maximum for a general purpose loan from the TSP from $ 50,000 to $ 100,000 (or the total amount of the participant’s acquired balance, whichever is less), for loans taken out before the due date of certain conditions related to the virus.

In summary, these conditions are only if a participant, spouse or dependent has been diagnosed as infected or “experiences adverse financial consequences” due to quarantine, leave, reduced hours of work. work or an inability to work due to lack of child care.

Also under this law, those who have an outstanding loan and who meet one of these standards can suspend their payments until December 31; such requests can be made until November 30, although waiting that long would only result in a one-month suspension.

This law also allows people under the age of 59 1/2 to make financial hardship withdrawals until the end of the year up to $ 100,000 for virus-related reasons, without the standard tax penalty of 10 percent on on-the-job withdrawals made. Regular taxes would still be due, but could be spread over three years, and those who make such withdrawals can pay them back into the TSP – or another retirement savings plan – to cancel that tax.

Survey examines why some employees are forgoing agency contributions
The recently released TSP participant survey showed that among FERS participants, 11% did not invest their own money and 8% invested less than the 5% needed to get the maximum government match of an additional 4%.

TSP C Fund Reaches New Highs Despite Underlying Fundamentals
The S&P 500 Index tracks the top 500 US publicly traded companies, represents around 80% of the US stock market by value and is tracked by Fund C. It hit new all-time highs in 2020 despite the downward economic trend that has occurred, but is now overbought in terms of the daily Relative Strength Index (RSI), historically increasing the chances of a correction or consolidation in the coming weeks. .

TSP International Fund continues to fall behind
The TSP International Fund, or Fund I, tracks the MSCI EAFE Index, which includes stocks from foreign developed markets, primarily Europe and Japan. Over the past year, the S&P 500 Index, which is the index tracked by Fund C, has outperformed the MSCI EAFE Index by nearly 13%.

Federal Employees Handbook 2020

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