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FAQ Regarding New TSP Investment Options by Jay Hunt

Jay Hunt
August 12, 2017

FAQ Regarding New TSP Investment Options

by Jay Hunt

Jay Hunt of Stratico Retirement and Insurance Solutions is in the business of helping people, and here he discusses the various investment options offered along with your TSP

If you’re a federal worker, you are likely looking for answers regarding the new TSP Investment options. There have been many questions making their way to the surface in recent weeks with regards to TSP investment, TSP withdrawal options, and many other factors. However, there is one that seems to be dominating; ‘when will these investment choices be available for the TSP?’. Therefore, it’s time to provide a full answer so keep reading if you need to know!

If you were unaware, TSP stands for Thrifts Savings Plan, and it is primarily a program for all federal employees styled much like a 401(k). In total, there are five different funds reflecting the different bond and stock markets. In 2019, tracking international stocks (one of the five) will expand so it includes Canada and many other emerging markets and this is perhaps the biggest change in the recent announcement.

TSP Lifecycle Funds

Furthermore, another change will be will include TSP lifecycle fund changes with withdrawal dates released as 2020, 2030, 2040, and 2050. Ultimately, these funds combine basic fund investments with different ratios and, as time passes, they become more conservative. When 2020 arrives, the TSP will start to offer five-year increments with funds (ending in 2065) as all funds with the date merged with current income funds.

Elsewhere, the TSP is also looking to add flexibility to investing through what they’re calling the TSP Investment Window. Rather than being restricted by investments, they want to allow all account holders to invest in actively managed mutual funds as well as various other funds rather than just those they offer already.

Finally, Congress has recently received potential bills to add more options when it comes to withdrawing. In particular, they should help those aged 59 1/2 and above (as long as they’re still employed).

There we have it, the expected changes in the coming years and when they will make an appearance. According to all involved, these changes will bring the TSP into the 21st century and level with other retirement savings programs currently available in the market.