Understanding The Thrift Savings Plan, by Todd Carmack
The TSP is the Federal Government’s retirement accountIf I asked 20 federal employees, “How much does the government match for TSP contributions?” I would get several different answers.  The correct answer is 5% if you’re a FERS employee.  Providing education is the most important part of my job and I enjoy the benefits that truly educating my clients can bring them.
One of the most important pieces of advice I can provide to employees is to make sure you are contributing a minimum of 5% to your Thrift Savings Plan (TSP). Free money is hard to come by and if you’re contributint to your TSP its about the same as giving yourself a raise just by doing the smart thing! Example: If your salary is $51,450 a year, your 5% contribution is $2572.50 a year and the government will match that figure, which means you will have a total $5145 in contributions to your account – not to mention any TSP fund performance.
Knowing your TSP investment options (TSP Funds) is also vital. Here are the six options:
TSP G Fund – government securities
TSP F Fund – government, corporate and mortgage backed bonds
TSP C Fund – Large/mid cap U.S stocks
TSP S Fund – small cap U.S stocks
TSP I Fund – international
TSP L Fund – lifestyle funds (which is a combination of G,F,C,S, & I)
As for contribution limits, for those age 49 and under, you can contribute a maximum of $17,500 a year. For those who are 50 and above, you can contribute an additional $5500 a year.
About the Author:
Todd Carmack,
Glendale, Arizona
Other Todd Carmack Articles
Social Security for FERS Employees, by Todd Carmack
Is The Pension Survivor Benefit Best For You?  by Todd Carmack
Understanding Your FEGLI Coverage.  by Todd Carmack
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