An Affordable Luxury – The TSP

Affording the TSP

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People who don’t consider themselves wealthy often live vicariously by watching the rich and famous on television and reading about them in magazines. They never imagine themselves having the same advantages as ‘the beautiful’ people.  How wealth is measured is relative.  There are people who are billionaires and millionaires.  Then there are people who are thousandaires.  The term doesn’t sound too bad to me.  If I had $400,000 or $600,000 I wouldn’t consider it a negative thing to have in my possession.  While those figures might not qualify you to be in the million dollar or billion dollar club, they qualify you to be in a club that is doing just fine – a club that will allow you to retire on your own terms.

Maximize the TSP Opportunity

The idea is not to think as a minimalist when it comes to possibilities for your life and that of your family.  Think of yourself as a maximumlist – willing to maximize every opportunity that comes your way and the TSP is no exception.  After all, you are a big investor with a whole team of financial experts keeping watch over your massive portfolio.  If you participate in the TSP, then you are an investor with a portfolio housing some of the most sought after stocks, bonds and government securities in the world.  Although, your TSP does not necessarily fall into the category of active management – it is taking care of the business of your retirement by managing your federal wealth as directed.

Automatic TSP Enrollment

For a few years now, the TSP has begun to participate in automatic enrollment for new employees coming into the federal service.  Each new employee is automatically enrolled in the TSP with the 1% agency contribution going into the G Fund or the Government Securities Investment Fund.  The Fund is safe guaranteeing minimal or no loss.  The G Fund by statutory law via the authority of the Secretary of Treasury granted by the Congress can determine when the G Fund is unable to be fully invested without exceeding the debit limit.  However, this Fund action has no impact on active workers or retirees.

Although the automatic 1% is invested in the G Fund, the new employee can select not to participate in the TSP or they can decide they want their money put into one of the other TSP Funds.  Not participating in the Thrift Savings Plan (TSP) is tantamount to putting your money in a bucket and setting fire to it –  throwing money away.  Putting your money in the TSP is an affordable luxury you don’t have to dream about.

P.S. Always Remember to Share What You Know.

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