Action Required: Changes Coming to Roth TSP January 2015

us-tsp-thrift-savings-planI received the following email from DFAS on 2 October 2014. I don’t know if this applies to other military branches as well or just the Air Force. I have not found any information on the DFAS website either. As I find more information I will continue to update this post.

According to this email, you will need to update your TSP elections by January 31, 2015 to ensure that your contributions are not interrupted. It looks like DFAS and the TSP are moving to a percentage based system, where you elect to contribute x% of your basic pay, bonus pay, etc, rather than a fixed dollar amount. This is how the traditional TSP is set up today.

I’m not sure if I like this system better or the fixed dollar amount. The fixed dollar amount is nice because you can elect to contribute exactly the monthly limit to maximize your contributions by the end of the year. On the other hand, there might be more participants in the Roth TSP program if you only need to elect a percentage of your pay, rather than chose a dollar amount.

This is a great opportunity to start investing in the Roth TSP if you haven’t already. Or, if you are investing in the traditional TSP, this could be a great time to switch to the Roth option, which is better for military personnel in most cases.

The email reads:

Roth Thrift Savings Plan – Air Force Active Duty Members

I would like to take this opportunity to advise you of an upcoming change to the ROTH Thrift Savings Program (TSP) that will require your involvement to allow your investment to continue without interruption.

Beginning February 2015, the Defense Finance and Accounting Service (DFAS) will implement capabilities that enable DoD to comply with Roth TSP requirements.  In order to implement the changes, we will need you to submit new contribution elections.

Your current Roth TSP deductions will stop on January 31, 2015.  If you want to continue contributing to Roth TSP after January 31, 2015, you will need to submit new elections as percentages of basic pay, special and incentive pay, and bonuses.  Beginning January 1, 2015, you will be able to use myPay or hardcopy forms to select your new elections.  Your new elections must be received by January 31, 2015 to ensure no interruption to your investment plans is experienced.

You can expect to receive additional information on this effort during November and December.  We will be updating www.dfas.mil with the needed worksheets and instructions to assist you in making the new elections.  We will also be providing periodic reminders about updating your contribution elections.

My POC for this effort Matthew Seyler at [email protected]

Bruce N. Keith

Director, Military Pay

Enterprise Solutions and Standards

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The Uber of FOREX: USForex Review

Probably your first stop in Germany. Good time to think about forex!

KMCC: Probably your first stop in Germany. Good time to think about forex!

Overseas money transfers can be scary and expensive, especially if you’ve never done one before. But they don’t have to be. Last month I had the opportunity for an investment in a foreign startup company and needed to move several thousand dollars to an overseas bank account in the local currency.

My first step was to see how much USAA (my military bank of choice) charges to wire money. It’s $45 for an international transfer and $20 for a domestic transfer. Not too bad, especially when moving thousands of dollars. Next, I checked with my partner overseas to see what his bank would charge to accept an international wire transfer. In this case, it was free, but they would have to convert the funds into the local currency.

The rate the foreign bank was offering for converting US dollars to local currency didn’t seem very good to me. According to Google the rate was 1.17. The bank was offering me 1.14. Three cents may not seem like a lot, but for every $10,000, 3% was $300. I decided it was worth investigating other options, especially if it meant saving over $1000.

Reasons You May Need to Send Money Overseas

Sending money internationally may seem like something only immigrants with family in the “old country” do. There are a variety of legitimate reasons you may need to send money to a foreign bank account.

  • You’re stationed in Europe, Asia, or elsewhere and want to pay bills with your host nation bank account
  • You have friends or family living in another country and want to send them money
  • You conduct international business and receive payments from overseas as well as make payments to overseas accounts

These are all great reasons to use a foreign exchange company, or “forex.” My investment opportunity in my friend’s startup caused me to go on a mission to find the best forex company for the best price.

Online International Money Transfers

It’s amazing that even in the 21st century it’s so difficult to move electronic money around. We even still call it a “wire transfer,” as if the money is being sent by telegram! To send my money overseas, I had to talk to 3 people at 2 different companies on the phone. On the phone! It’s like the Internet hasn’t even been invented. Fortunately, it seems that after my first transfer all subsequent transfers can be conducted online.

headerLogoI started my search for a better exchange rate on Google and found the site USForex.com. While the site was definitely professional built and looked legitimate with testimonials, press releases, and an in depth FAQ, I had to do my own research to determine if I was going to trust them with a $xx,xxx transaction.

The main difficulty in transferring money overseas is not getting burned on the exchange rate. Rates fluctuate constantly throughout the day. The rate your quoted to exchange cash is usually much worse than the rate you’ll get if you use a credit card or ATM card. The best rates are between the largest banks in the world, who trade at what’s known as the inter-bank rate. Buying or selling your money as close to this rate as possible saves you the most money.

USForex.com Review

The first thing I noticed about USForex was their attractive pricing. The rate I was quote for my transaction was 1.1634, only a fraction of a penny and percentage below the inter-bank rate. The maximum fee they charge is only $5 and there are no fees for transactions over $5000!  This was an amazing exchange rate and a no fee transaction for me. The savings really add up when you do larger transactions. Check out the savings between what the bank was offering me and what USForex offered me:

Amount of Foreign Currency PurchasedRegular Bank charges .8772USFOREX.com charges .8595USForex saves me…
10,000$8772$8595$177
20,000$17,544$17,190$354
50,000$43,860$42,975$885!

Huge savings by going with USForex! The more you transfer, the more it makes sense to skip the big banks and work with the industry disruptor.

The Internet is finally allowing the average consumer to access the exchange rates previously only available to the wealthy and mega-corporations.

Can I Trust USForex?

Even though I was getting a good deal, I still wasn’t sure if I could trust them, so I did my research. While researching I noticed a couple of good things right away:

  • Lots of 24/7 phone numbers and contact information
  • Free registration
  • Lots of positive testimonials and no negative reviews on Google
  • Better Business Bureau registration
  • USFOREX is registered with the Financial Crimes Enforcement Network (FinCEN) under the US Department of Treasury
  • The company is registered as a money transmitter with 46 states and has application pending with the remaining 4

USForex is a Delaware based company with an officer in San Francisco. They are owned by OzForex Group, an Australian based company founded by banker Matt Gilmour in 1998.  A couple stats I found:

  • 170 employees in 6 cities: Toronto, San Francisco, London, Sydney, Hong Kong, Auckland
  • $9.1 billion moved in 2013
  • 460,000 transactions processed in 2013
  • Over 100,000 clients
  • OzForex also owns UKForex, CanadianForex, NZForex, and Tranzfers

Based on these facts and reading some financial statements the company had registered with the Australian government, I decided that they probably weren’t going to run off with my money!

My First International Wire Transfer

I set up my account and received an email instantaneously and a phone call from a USForex dealer within 5 minutes. See the video here on how to setup your own account. He was extremely polite and helpful in getting my details confirmed and my account set up. After confirming my details both online and over the phone, I was ready to make my first transaction.

Setting up my transaction is an easy three step process:

  1. us-forex-get-quoteGet a spot quote for the transaction. This locks in your exchange rate and is the best available rate at the moment you click “Get Quote”
  2. Then you designate your beneficiaries, the bank account and person who will receive your funds
  3. Finally, confirm all the details. For your first transaction, USForex will phone you to confirm all the details of your transaction. Once you confirm the transaction, you’ll have 24 hours to wire the money to USForex’s holding account.

USForex leverages its massive transaction volume to cut its rates to a fraction of what the big banks charge. The process is pretty simple for how USForex converts your funds:

  1. After you finalize your transaction, you wire the funds to USForex’s US bank account. For me, this cost $20 with USAA. Your bank may charge more or less.
  2. Then, USForex converts the funds (settling thousands of other transactions at the same time, so your money gets as close to the inter-bank rate at possible) and wires the money to your beneficiaries.
  3. The money arrives in the foreign bank account usually in less than 2 business days, and sometimes as quick as 1 business day.

The process could not be easier or more simple. The funds I transferred to my overseas partner were receive in less than 24 hours after I wired them. I am definitely a happy customer! I highly recommend using USForex for all of your foreign exchange transactions, especially if you’re moving large amounts of money ($20,000+). The savings are just too big to ignore, the dealers are fast and professional, the transaction runs smoothly, and the 24/5 access to dealers is unmatched in the industry.

USForex is disrupting the opaque and archaic foreign exchange market for the United States. It’s good to see the Internet spurring innovation and competition to create better products for consumers and small-medium size businesses. Just like Uber is rocking the taxi and transportation world and AirBnB is shaking things up in the hotel world, USForex is changing the rules of the game in the forex industry.

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