The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve.
The Federal Employees Retirement System Act of 1986 was established by congress to help provide retirement income for federal employees similar to a 401(k) plan.
The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency or service,
if you’re eligible to receive agency or service contributions) put into your account during your working years and the earnings accumulated over that time.
Similar to 401(k), TSP funding can be taken straight out of your paycheck and can be invested in a variety of funds. The five different fund options are: The Government Securities
Investment Fund, The Fixed Income Index Investment Fung, The Common Stock Index Investment Fund, The Small Capitalization Stock Index Fund and the International Stock Index
Investment Fund. Check out more information about these funds and their benefits here.
With the TSP, you have two options where you can choose to invest in any of the five above mentioned, individual investment funds or you can invest in a lifecycle fund.
Life cycle funds, or L Fund, is a mix of the five core funds (G,F,C,S and I). They allow you to let you invest your money in an entire portfolio and get the best return for the amount
appropriate for you. (Source)
On the contrary Individual Funds give you full freedom on how you want to balance the five fund types. And give you control over your investment. You can choose how you balance each of
the five fund types or skip the ones you don't want.
One of the many great benefits of the Thrift Savings Plan is matching your contributions from your agency if you are part of the Federal Employees Retirement System (FERS) or Blended
Retirement System (BRS). Your agency or service starts contributing 1% of your pay- you receive that 1% even without making a contribution of your own.
It is important you contribute the highest amount possible to be able to maintain your standard of living in retirement. Most TSPS participants are around 80% contributing to a TSP account are
putting in at least 5% of their pat to get a full match. (Source)
Every month that goes by that you don't take full advantage of the TSP is a month of lost savings and earnings. Don't pass up on free money. - Learn more at https://www.tsp.gov/
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