New Changes to The TSP Creates A Brighter Retirement Future

[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]The TSP (Thrifts Savings Plan) had some significant changes made to its withdrawal options this year that will give many federal employees and families a better opportunity to invest efficiently for their retirement. 

For a long time, the TSP has given its participants affordable investment choices to help them establish a reliable retirement fund. Due to the TSP Modernization Act that was passed in 2017, this has allowed the board in charge of the TSP to create and implement new changes based on feedback from the participants so that people would have more accessibility to their retirement money.

So what are these changes that went to effect on September 15th of this year?

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Those withdrawals can be taken out from specific accounts that are desired.

Participants no longer have to make full withdrawals once they reach the age of 70 and a half.

Payments of their withdrawal can be selected to be paid to participants every month, every quarter, or once a year.

For personnel in uniformed services, this has been a second update to the Thrift Savings Plan in the past few years. Early last year, on January 1st, military personnel started to get a contribution to their TSP that is equivalent to 1 percent of their base salary. They would also get a 5 percent matching contribution of what they contribute to their accounts. In that 5 percent, the initial 3 percent would be matched to each dollar, and the other 2 percent would be matched 50 percent for each dollar.

So with these new rules in place, what can be done to maximize the benefits of your TSP account? Below are a few pointers that may help you:

First off, decide how much you can save each month from your budget and put it towards your savings account. You can even have this done automatically.

Second, make sure you take full advantage of the matching contribution that is offered as that if free money for your future. If you are apart of the Blended Retirement System, you will get a 1% contribution of your base pay. However, everyone should try and maximize their contributions for the first 5 percent so that they will receive a match from their employer.

Another thing that your future self will thank you for during retirement: save a portion of extra money that may appear in your life and put it towards your TSP.

You will also want to consider investing for the long run that can help build and grow your investments. It may be more beneficial to put your investment towards funds that are tied with the stock market for a potential higher return for your retirement. A mistake that many can make is that they handle their investments with too much reserve too early that their investments don’t provide sufficient returns for the future. 

And lastly, it is always smart to seek professional advice from an expert that can help you expand your savings and portfolio to assist with preparing for a secure retirement.

With the new changes that have been an upgrade to the TSP plan, the future is looking brighter for many.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”35747″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]