Investing in the Thrift Savings Plan (TSP) is an excellent way to start saving for retirement. The TSP is a retirement Savings program sponsored by the federal government and available to federal employees and members of the uniformed services. It works like a 401(k) or 403(b) plan. Workers can now invest their Savings in five index funds, which track bond and stock indexes, such as the Standard & Poor's 500 index.
Participants in the Federal Thrift Savings Plan will soon be able to put a sizeable chunk of their accounts into 5,000 new funds, including mutual funds, Exchange Traded Funds (ETFs), and Target retirement Funds (TRFs). These accounts offer a wider selection of invest options and more flexible withdrawal rules, including the option to let your retirement Savings grow tax deferred.
A financial advisor can help you decide what the best invest options are for your long-term financial goals. Finding the right financial advisor can be confusing, so it’s important to make sure you understand the different options available and how they will affect your financial future.
The TSP also offers three options to give participants even more flexibility: invest election, reallocation, and fund transfer. invest election lets you choose from one of five index funds, such as the S&P 500 index, the Dow Jones Industrial Average (DJIA), the Nasdaq Composite (COMP), and the Russell 2000. Reallocation allows you to reallocate your existing TSP account to one of the new funds. And fund transfer lets you transfer money from your existing TSP account to one of the new funds.
For the first time, TSP participants have the opportunity to select mutual funds, including sustainable funds, outside the basic core options. This new option will give participants access to a much wider range of invest options, including funds that invest in socially responsible invest.
There are approximately six million Thrift Saving Plan (TSP) participants who are eligible to invest in the new funds. Yes, we needed more invest options but a very small percentage of TSP participants actually use them. The new funds offer a way for invest to diversify their portfolios and have access to more sophisticated invest.
Through the new mutual fund window, members of the TSP now have the past-due tool to move their money away from the default funds and the limited options they offer. By Investing in the new funds, participants can take advantage of the returns offered by different asset classes and have better control over their invest.
As of June 1, you have three options to give you even more flexibility: invest election, reallocation, and fund transfer. Change your invest strategy and choose a fund that meets your needs. Investing in the TSP is a great way to save for retirement, and the new options make it easier than ever to do so.
