(The Center Square) – Military retirees and disabled veterans could soon have the option to keep building their federal retirement savings accounts even after separating from service.
The measure, called the Financial Opportunities for Retirees and Warriors Advancing Retirement Development Act, was introduced by U.S. Rep. Jen Kiggans, R-Va., and U.S. Rep. Wesley Bell, D-Mo. It would allow veterans with a military pension or a 100% disability rating to continue contributing to their Thrift Savings Plan accounts after leaving the armed forces.
Right now, contributions to the TSP, the federal government’s version of a 401k, stop as soon as a service member leaves the military. Veterans who want to keep saving are required to open new accounts, essentially starting over in a different system.
The FORWARD Act would close that gap.
Veterans could keep putting a portion of their pension or disability compensation into the same plan they used while serving without needing to switch to a new account. The bill does not authorize government matching contributions, but it provides retirees the option to keep their savings in one place.
“Empowering our veterans to continue building their long-term financial security through retirement savings is the least we can do,” Kiggans said in a statement. “These brave men and women have sacrificed so much for our country and deserve to know they will be able to live secure, comfortable lives in retirement.”
Kiggans added that for 20-year retirees and veterans with a 100% disability rating, “it’s only fair that they can keep contributing to the Thrift Savings Plan they’ve spent years building. They shouldn’t be forced to start over in a new system when they’ve already invested in one that works for them.”
Bell said veterans “have earned the right to build a secure future using the retirement tools they know and trust. Right now, retired service members and disabled veterans are being forced off their existing plans the day they hang up the uniform. The FORWARD Act is a commonsense fix that removes that barrier, so they can continue planning for retirement in a plan they’ve relied on throughout their service to our nation.”
The bill directs the Federal Retirement Thrift Investment Board, in coordination with the Departments of Defense and Veterans Affairs, to issue rules within 180 days of passage.
Virginia’s large veteran population could see direct effects if the bill is adopted. The commonwealth is home to more than 600,000 residents who have served.
