you serve in the military, you may have an important
decision to make in 2018: whether to stay in the current
retirement system – the federal government’s Thrift
Savings Plan — or opt into the new Blended Retirement
you make your choice, you won’t be able to go back,
even if you change your mind before the Dec. 31, 2018,
Thrift Savings Plan is the federal government’s
traditional retirement plan for federal workers and
uniformed service members.
starting Jan. 1, 2018, all new members of the uniformed
services are enrolled in the updated BRS retirement
plan; military service members with fewer than 12 years
of service by Dec. 31, 2017, are also eligible to enroll
in the new retirement system.
are the benefits of opting in? For the first time, the
government will match some of your annual retirement
contributions.This could be an especially good deal for
young people, who will have their own account and can
kick in their own money over time. The drawback? The
government portion, the pension, will take a 20 percent
is of the essence.
soon as you opt into the new Blended Retirement System,
you get the match in the following pay period. If you
want to opt in, do it as soon as possible this year to
maximize that," said Michael J. Meese, a retired
Army brigadier general and chief operating officer of
the nonprofit American Armed Forces Mutual Aid
Association. At 57, Meese isn’t eligible for the new
system; he’s grandfathered into the legacy retirement
plan. His son, however, is a 27-year-old captain and is
deciding whether to opt in, Meese said.
the Thrift Savings Plan’s rather clunky website,
TSP.gov, check out the bulletin board for news on the
BRS. Or call the Thrift Savings Plan at 1-877-968-3778
and watch the video "Opting Into the Blended
Retirement System," found at
we spoke with John D. "Don" Fort, the new IRS
chief of the criminal investigation division, appointed
in June 2017. Fort’s division investigates crimes such
as hacking, ID theft, and criminal violations of the tax
code. He told us that IRS criminal investigators will be
focusing on employment taxes to detect fraud.
tax is one of the areas where we’ve increased
investigations. We made a concerted effort to do that
because that’s where 70 percent of all taxes are
collected," said Fort, who briefly served as the
special agent in charge of the Philadelphia IRS field
office. "There’s significant areas of
office is using data-mining tools such as Palantir,
fraud referrals, and revenue offices to comb through
hundreds of millions of tax returns, bank filings, and
other databases, including one involving the Foreign
Account Tax Compliance Act. The division has the same
number of agents as it did 50 years ago, Fort added, so
they’re leaning heavily on the data mining.
another entrant has joined the fast-paced, growing robo-adviser
community: Finhabits.com, which aims to enroll more
Hispanic/Latino investors and encourage savings among
this community in Philadelphia and other large
metropolitan areas. Finhabits uses an automated
platform, accessible by computer or phone, to set up a
savings account and an investment portfolio tailored to
your goals. It charges $1 a month for new accounts under
$2,500. For accounts above $2,500, the fee rises to 0.50
registered investment adviser invests in Vanguard and
Blackrock index funds and exchange-traded funds,
according to founder Carlos Armando Garcia Portillo, 37,
who previously worked at Merrill Lynch Investment
Management and a hedge fund, Madison Quant Labs.
Finhabits is aiming for grassroots organic growth.
met recently with Philly small banks and other
organizations that deal with small business owners, and
we want to create awareness at the community level. More
than 15,000 people have come through our pipeline since
we launched, and our goal is to make sure that people
with no retirement accounts create a long-term habit of
saving," Portillo said.
you are age 70½ or older and forget to take your RMD
(required minimum distribution) from your retirement
plan, you are generally subject to a 50 percent penalty,
said Eric Bronnenkant, Betterment.com’s head of tax.
And the IRS ain’t so forgiving.
IRS does provide a waiver for this penalty if you can
make an argument that the failure was due to reasonable
error and you are taking corrective action by
withdrawing the missed distribution," he said.
"While the IRS does not define reasonable error,
‘I forgot’ or ‘I did not know’ will likely not
pass muster. ‘I was incapacitated in a nursing home’
is a potentially more persuasive argument."