What is the Thrift Savings Plan (TSP)?
The Thrift Savings Plan (TSP) is a retirement savings plan that is available to federal government employees and members of the uniformed services. It is administered by the Federal Retirement Thrift Investment Board (FRTIB) and allows participants to save and invest their retirement funds in a tax-advantaged way. The TSP was established in 1986 and is the largest defined contribution retirement plan in the United States with over $500 billion in assets.
The Thrift Savings Plan offers five different types of funds: the G fund, the F fund, the C fund, the S fund, and the I fund. The G fund is a Government Securities fund and the F fund is a Fixed Income fund. The C fund is a Common Stock fund, the S fund is a Small Cap Stock fund, and the I fund is an International Stock fund. Participants can invest in one or more of these funds to diversify their investments and manage their risk.
The TSP also offers two types of lifecycle (L) funds: the L Income fund and the L 2050 fund. The L Income fund is designed for those who are closer to retirement and the L 2050 fund is designed for those who are further away from retirement. Both of these funds are made up of a mix of different TSP funds and are managed to provide a steady stream of income in retirement.
TSP provides many advantages, including:
- Automatic Thrift Savings Plan payroll deductions.
- A diversified choice of TSP Funds and investment options, including professionally designed lifecycle funds.
- A choice of tax treatments for your TSP contributions:
- Traditional (pre-tax) contributions and tax-deferred investment earnings, and Roth (after-tax) contributions with tax-free earnings at retirement if you satisfy the IRS Requirements.
- Low administrative and investment expenses.
- Agency TSP contributions, if you are an employee covered by the Federal Employees’ Retirement System (FERS).
- Under certain circumstances, access to your Thrift Savings Plan savings while you are still employed by the federal government.
- A beneficiary participant TSP account established for your spouse in the event of your death.
- A variety of Thrift Savings Plan withdrawal options.
How to Enroll in the Thrift Savings Plan
If you are a federal government employee or a member of the uniformed services, you can enroll in the Thrift Savings Plan by completing the TSP-1 form. You will also need to provide your Social Security number, your address, and other information. Once your form is completed, you will need to submit it to the TSP. You can do this online or by mailing it to the address provided on the form.
Once your form is submitted, you will need to make your first deposit into your TSP account. You can do this by setting up an electronic funds transfer (EFT) from your bank account or by sending a check to the TSP. After your first deposit is made, you can start investing in the TSP funds and manage your account.
How to Manage Your Thrift Savings Plan
Once you are enrolled in the TSP, you can manage your account online. You can view your account balance and make deposits and withdrawals from your account. You can also review your investments and make changes to your portfolio. The Thrift Savings Plan also offers a variety of investment tools, including calculators and retirement planning resources, to help you make informed decisions about your investments.
Thrift Savings Plan Contribution Limits
The Thrift Savings Plan has contribution limits that are subject to change each year. For 2021, the contribution limit is $19,500 per year for those under age 50 and $26,000 per year for those age 50 and over. Participants can also make catch-up contributions of up to $6,500 per year for those age 50 and over.
Thrift Savings Plan Withdrawal Options
The Thrift Savings Plan offers a variety of withdrawal options, including taking a lump sum or periodic payments, or transferring your funds to an IRA or another retirement plan. You can also take a partial withdrawal or rollover your funds to another qualified retirement plan.
Understanding Thrift Savings Plan Fees and Expenses
The Thrift Savings Plan charges fees and expenses for its services. These fees and expenses are deducted from your account balance and can affect the performance of your investments. The TSP charges a 20 basis point administrative fee for its services, which is deducted from your account balance each month. Additionally, the funds in the Thrift Savings Plan have their own fees and expenses that are charged by the fund’s manager. You can find more information about these fees and expenses in the TSP fee disclosure statement.
Calculating Thrift Savings Plan Performance
The performance of your TSP investments can be measured by looking at your account balance over time. The performance of the TSP funds can also be measured by looking at their historical performance. The TSP publishes performance data for the funds on its website. You can also use online calculators to calculate your expected returns based on the performance of the TSP funds.
TSP Login and Contact Information
The TSP offers a secure online portal for managing your account. You can use the TSP login to view your account balance, make deposits and withdrawals, and review your investments. Additionally, the TSP provides a toll-free number for customer service. You can contact the TSP at 1-877-968-3778 for more information about your account.
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