www.tsp.gov
TSP Loans
The Thrift Savings Plan (TSP.gov) is a savings, retirement and investment vehicle available to federal and postal employees. Although different guidelines for FERS and CSRS, the TSP loans are nonetheless a supplement to grow your retirement wealth and retirement income.
Your TSP.gov account is structured so that participants may take out TSP loans from their TSP.gov account. There are two types of TSP loans – a general purpose TSP loan which has a 5 year term limit and a residential TSP loan carrying a 15 year term. You can change the amount of your payments up or down (re-amortize) as long as it is within the period or term of the TSP loan.
Individual borrowers are responsible for making TSP loans payments on time. It is important to always check your quarterly participant statement to make sure your TSP loans payments are being made and made on time. Generally TSP loan payments are payroll deductible; many things might happen that can change when the payments are being deducted. Your pay cycle may change or you may transfer to another agency or assignment and deductions from your pay may be delayed. It is still your responsibility to make sure the payments reach your TSP.gov account in a timely manner. You may pay by personal check or money order directly to the TSP with a payment coupon (TSP-26). Include your TSP loan account number, your loan number and the TSP-26 to make certain that you are properly identified and payments are credited to your account.
Missing a payment on your TSP loan could have tax consequences. If you do miss a loan payment the TSP loan will notify you of the missed payment and you will have until the end of the following calendar quarter to rectify the problem. You cannot suspend your TSP loan payments nor stop them. If you witness a financial hardship, you should consider recalculating (re-amortize) your TSP loan to an amount you can afford.
TSP Loans
For information on TSP Fund choices click here
P. S. Always Remember to Share What You Know.
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Thrift Savings Plan (TSP) Withdrawal Options
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Federal and Postal Employees – Choosing a Financial Professional
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Thrift Savings Plan: Saving for Your TSP
Saving for Your Thrift Savings Plan
Funding your Thrift Savings Plan (TSP) account through TSP.gov, with the specifc goal of getting the maximum benefits, is a good goal to set. The IRS sets a limit on how much federal employees can contribute to the TSP. The great design of the TSP is that agencies participate in a matching scenario. Although the IRS sets a limit on contribution levels, the rule of thumb is to make certain you don’t reach that limit too early and miss out of the agency match paid over 26 pay periods in a year.
Paying attention to your TSP matching contributions is possibly even more important than what TSP fund you select. This is because the TSP match can act like ‘Free Money’ because for every dollar you contribute (up to the maximum match) your Agency contributes an identical amount to your TSP. – Its like doubling your money, Day-One.
You can also wait too late to get all of your matching benefits of our TSP accounts.. Therefore, you want to pay close attention to your contribution levels and the time it will take to reach the maximum limit and still receive matching funds. This situation is of particular concern if your salary changes. The level of contribution necessary to reach your maximum contribution changes depending on your salary.
If you set out to reach your contribution level too quickly called front-loading, you run the risk of reaching the level prior to the end of the 26 pay periods; depriving you of the maximum agency match. It is important to watch your TSP contribution levels so that you can contribute your 5% in all 26 pay periods to get the TSP match the agency offers.
You can also visit your agency TSP.gov representative or go online at and view your TSP.gov Account to see how much you need to contribute each pay period to make certain you are not reaching your contribution limit too early in order to realize the agency’s 5% TSP match.
P. S. Always Remember to Share What You Know.
RELATED TSP ARTICLES
Thrift Savings Plan (TSP) Withdrawal Options
For Postal Employees – LiteBlue and the TSP
Federal and Postal Employees – Choosing a Financial Professional
Is All ‘Your’ TSP Money Actually Yours?
Thrift Savings Plan: Why The TSP?
Why choose the Thrift Savings Plan?
The Thrift Savings Plan (TSP) is a retirement savings vehicle designed to help federal and postal employees increase their resources when planning for retirement. But why not take your earnings from the federal government and take your chances in the open market? Maybe you could do better and your money could grow faster or maybe not.
The TSP is an easy way to save with little or no strain and stress on the employee. TSP contributions are payroll deductible once you sign up to participate in the TSP. The TSP offers extremely low administrative fees which external investment firms cannot match. Vanguard which has probably the lowest expense ratios available to investors are still higher than the expense ratio for the Thrift Savings Plan.
Your TSP Account also provides a fund where you will never lose money, the TSP G Fund. The G Fund, Government secured allows participants to earn interest without any risk or loss of principal. There is also very low earnings in the G Fund with only very modest inflationary protection (speak to a TSP expert or licensed and trained financial professional).
So why the TSP, because it offers participants the best way to safely plan for their retirement future while still employed. If you know what the rule of 72 is and how it related to compounding interest; interest built on top of interest that helps your money grow faster. That is yet another advantage offered by the TSP is the fact that while your money is within it or rolled over into an IRA your TSP interest and earnings are tax-deferred.
With the TSP you get to choose the level of contribution you wish to make. Although, employees currently joining the federal service are automatically enrolled in the TSP at a contribution level of 3%, you have the option of disenrollment. But why would you want to? The TSP is hands down the best way for federal employees to start early managing their retirement future.
To access your TSP Account click here
Click here for TSP Roth information.
Have a TSP L Fund – want to know more
P. S. Always Remember to Share What You Know
TSP: Is All ‘Your’ TSP Money Actually Yours
Is All Your TSP Money Yours?
Within your TSP.gov Account the money you invest in the Thrift Savings Plan (TSP) and the agency match is yours immediately and you are therefore vested. However, the agency’s automatic 1% contribution has a few strings attached.
For individuals in the Civil Service Retirement System (CSRS), this is not a concern. CSRS employees may participate in the TSP but are not eligible to receive any matching funds. Nonetheless, it is still a useful tool for deferring taxes and helping to save for retirement. Your TSP.gov Account acts as a supplement for CSRS employees in planning their retirement.
FERS employees on the other hand receive matching funds into their TSP.gov account along with an automatic 1% contribution. FERS employees are eligible to keep the 1% contribution after becoming vested by acquiring tenure of at least 3 years with the Federal Government. FERS employees who work in the Congress and certain other non-career employees need only 2 years to become vested in the Thrift Savings Program.
If you are participating in the Thrift Savings Program and decide to leave the federal service prior to the 3 year vesting period, the automatic 1% and the earnings from the agency 1% contribution will no longer be yours to keep. However if you die before leaving service you are vested in all the monies in your Thrift Savings Program account.
Your TSP.gov account (see your account here) is a wonderful vehicle for not only managing taxes but helping federal and postal employees save for retirement.
P. S. Always Remember to Share What You Know.
You may also find information on your TSP Funds interesting, or certain Tax implications of your TSP.gov investments.
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For Postal Employees – LiteBlue and the TSP
Federal and Postal Employees – Choosing a Financial Professional
Tax – Deferred Advantages
What do tax-deferred instruments like the Thrift Savings Plan do for federal and postal employees? Most importantly, the instrument can give the employee a larger amount of money to take home. Taxes are calculated against your earnings on a pre-tax basis. For example, if you earned $1,000 and placed $200 in your Thrift Savings Plan (TSP) account, instead of paying taxes on $1,000, you would only pay taxes on $800 and the $200 would be deposited into your account for later use. This scenario would give you more because less money is being deducted from your earnings today and your $200 would be invested for later use.
Is a tax deferment election the best choice for every federal employee? This is a situation that requires evaluation of one’s individual circumstances. Prior to the expansion of the TSP’s structure, a tax deferred program was the only option available. Now participants in the Thrift Savings Plan can decide to defer their taxes via the Traditional TSP or pay taxes up front via the Roth TSP.
The Traditional Thrift Savings Plan allows you to defer taxes and only pay the taxes when the funds are withdrawn. The Roth TSP requires paying the taxes up front which eliminates having to pay taxes when the funds are withdrawn. The Roth TSP also allows for tax-free earnings when certain conditions are met.
Employees can now see if the Traditional TSP or the Roth TSP or both fit into their plans to retire well and meet their individual needs. Visit your TSP.gov Account to review the information on the TSP and how it helps in planning your retirement future.
P. S. Always Remember to Share What You Know.
It is also important to review your TSP fund selections and make sure that your reaching your retirement goals
Financial Advisors and Federal Employees
I was recently asked if my trainer of financial advisors and planners interested in the federal workforce differed from training federal workers? Without missing a beat, I said most emphatically “It certainly does.” It is more intense because financial advisors for federal employees need to know more about the Federal Retirement Systems than the federal workforce themselves.
The Federal Retirement Systems probably have some of the best benefits you will find all things being equal. It, too, is a system of immense rules and regulations that can be undeniably complex, even for someone who has spent a career absorbing all of the nooks and crannies.
The Civil Service Retirement System (CSRS) often referred to as the old retirement system was enacted in 1920. The world has changed a number of times since then and many amendments have been made to the system. One must be constantly updated on the changes so as to be an excellent source of information dissemination. I find that many financial advisors and planners I work with who wish to begin helping the federal workforce think of simply helping the workers manage their money. There is nothing wrong with that premise only that would leave the federal employee missing out on a great number of potential benefits
Federal Employees Partnering with Financial Advisors
Financial Advisors and Financial Planners (really the same thing) are important pieces of the partnership needed to guide the federal employee workforce to safe harbor so that their sails can withstand the uncertainty of storms that will surely come in their lives. To strategize such a journey requires acquiring a very sound knowledge of the Federal Retirement Systems (FERS, CSRS, FEGLI, FSAFEDS, etc.).
We are not talking about becoming Federal Retirement Specialists, but we are talking about partnerships that will equip these professionals to help manage the financial resources of a very unique group of employees. When you cast your net to work with the federal workforce in helping to plan their retirement, it needs to be cast wide because federal employees are as diverse as their many duties and responsibilities.
Although there are two retirement systems technically, there are a number of aspects that apply to special categories of employees as well, like firefighters, air traffic controllers and law enforcement officials.
Yes, my approach to conversational training with financial professionals is much more intense and absolutely focused on ensuring they know the language of the federal retirement systems and its workforce so that they can give them the tools necessary to retire in comfort and security.
If the federal workforce gets a course in the basics of the Federal Retirement Systems, then the professionals they entrust to handle their hard earned money – get the ADVANCED-ZERO TOLERANCE version with lots of hand-holding collaboration. I learn as much from Financial Advisors and Planners as they learn from me. We are all invested in making life in retirement and before a little easier to maneuver for federal workforce.
Financial Advisors who are knowledgable in federal and postal benefits need to be able to help you with your TSP account and Thrift Savings Plan fund choices, your Federal Employees Group Life Insurance (FEGLI) selection (both while employed and any potential reduction elections that you might want) and also possibly help you with your FSAFEDS and FEHB elections.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
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Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
Financial Professional – The Right Choice for Federal Employees
Federal Employees and Choosing a Financial Professional
Retirement planning for federal and postal employees can get pretty complicated, which is why we recommend that federal employees should seek out the guidance of a qualified financial professional to help them. Many individuals do their own retirement planning; while others seek the advice and counsel of a professional to set them on a path to retiring well. Below are some tips and recommendations for choosing a financial professional to help you handle your financial future.
• Seek a financial professional who has demonstrated they are experts in the federal or postal retirement market. These professionals have fulfilled the rigorous training, testing and ethical standards required to achieve various designations.
• Find a local financial professional who knows about your Thrift Savings Plan along with the in’s and out’s of Federal Employees Group Life Insurance (FEGLI), Federal Employees Retirement System (FERS) & Civil Service Retirement System (CSRS).
• Ask for references, preferably current and past clients, before you begin any legal work.
• If you decide to use an attorney for your estate planning needs choose one that has at least 10 years of experience in estate planning. This is a very complex field with different probate and wealth laws in every state. The attorney you choose must be keenly aware of these laws and how they apply to your personal circumstances.
• Make sure that the attorney you choose is licensed to practice law in your state of legal residence.
• Check organizations and licensing boards for background information. Also check with continuing education associations focused on estate attorneys. These associations generally draw well qualified attorneys to their ranks.
• Evaluate the listening skills and communication style of any advisor or attorney you are considering. If the professional is short and impatient and does all the talking without giving you the opportunity to chat and ask questions, no matter how talented, you may want to keep searching.
• Do your homework. Ask the professional if they’ve received any special training in federal employee retirement. Check their credentials, see if they have any third-party endorsements or have been published on subjects similar to your questions.
In choosing a financial professional you are selecting a partner – a person who will likely be working with you for years to come. Therefore, you want to make sure that you are hiring the most qualified financial professional you can find.
P. S. Always Remember to Share What You Know.
RELATED TSP ARTICLES
Thrift Savings Plan (TSP) Withdrawal Options
For Postal Employees – LiteBlue and the TSP
Is All ‘Your’ TSP Money Actually Yours?
Learning About Your Thrift Savings Plan
Thrift Savings Plan
The Thrift Savings Plan (TSP) is a retirement account and Federal Retirement benefit and Postal Benefit similar to 401(k) plans offered to employees of private corporations. Your TSP.gov account can be a great savings vehicle, which offers a contribution ‘matching’ by the government, which, along with the employee’s savings can create a significant retirement nest egg for Federal and Postal employees as well as other eligible participants.
The Thrift Savings Plan is a defined contribution plan. Which means that the amount of benefit that you derive from the plan depends on how much you put into the account during your working years. The Thrift Savings Plan is one part of a three-part retirement package for those employees covered under the Federal Employee Retirement System (FERS). In addition to your TSP.gov account, this includes your social security and FERS basic annuity.
For CSRS eligible retirees, the Thrift Savings Plan is a supplement to the Civil Service Retirement System (CSRS) annuity.
Features
The federal retirement plan: thrift savings plan provides the following benefits:
• Five basic investment options
• Professionally designed life cycle funds is one feature of the diversified investment options it provides
• It gives a choice of tax treatment options (Roth TSP, and Traditional)
• Tax-deferred investment earnings
Traditional versus Roth Thrift Savings Plan
Employees are eligible to contribute to either plan given total contributions to both do not exceed the deferral limit set by IRS. This limit changes from year to year.
Contributions are deducted from an employee’s gross salary in a traditional Thrift Savings Plan and this deduction results in current-year tax savings. Federal and income taxes are paid when funds are withdrawn at retirement, and the earnings grow on a tax-deferred basis until those withdrawals are made.
Contributions are deducted from an employee’s after tax income in the Roth TSP but there are no taxes to be paid upon withdrawal and earnings grow tax-free as long as the funds remain in the Roth TSP.
When is a Roth Thrift Savings Plan Suitable?
As a general rule, the lower your current tax bracket is today, the more suitable the Roth TSP is for you. This is because of the growth on your Roth TSP will be tax free assuming you take it out after 59 1/2 and if you don’t need to current tax-deduction then the tax-free compounding of your growth can be a real advantage.
Establishing an Account
The earlier you start contributing to your Thrift Savings Plan in your career the greater you will benefit through compounding. This could increase your retirement income substantially.
Your first contribution to the account will establish it, whether it is individually or through your agency (more information can be found at TSP.gov). You are automatically enrolled in this account if you a FERS employee who was hired after July 31, 2010. Every pay period, 3% from your basic pay is deducted and deposited in the account. You can also elect to stop or change the deductions by visiting www.TSP.gov. You will need your TSP.gov login to access the information available to you through the site.
Click HERE for information on Thrift Savings Plan
Click HERE for information on FERS
Click HERE for login information on TSP.gov
Click HERE for access to LiteBlue
Plan Building for Retirement
Building an Action Plan
Remember we discussed what separated people who get it about money from the rest of us – they have a plan and they stick to it. Building your individual action plan starts with building your Financial Plan for retiring well.
So that you achieve your goal of retiring well, you must embrace the urgency of identifying and setting goals that give you the flexibility to make adjustments as circumstances in your life change. That means making certain that your goals are SMART in order to have a workable financial plan, a budget that fits you and makes sense – all implemented via your individual Action Plan.
Making certain that your Action Plan gets you to where you want to be in retirement, it is important to distinguish between WANT and NEED. We can intellectually differentiate between WANT and NEED, but living on less money in retirement is a reality that compels us to prioritize NEED over WANT.
Are NEEDS and WANTS the same for everybody? The answer is NO.
However, all things being equal, we all have the same basic NEEDS and WANTS. Although, NEEDS determine what is absolutely necessary for human survival, WANTS often drive us to succeed. The challenge is knowing the difference, amassing and utilizing the requisite knowledge to choose options and make decisions that will lead to the goal of retiring well.
Your individual Action Plan will only serve your purpose if you put it into ACTION.
P. S. Always Remember to Share What You Know.
For information on saving with TSP.GOV
How to maximize federal benefits with a benefit analysis
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What Is Your Financial “Type?”
Your Financial Type
When it comes to money, what kind of financial person are you? Experts say that there are generally three kinds of people when it comes to money. There are those who live paycheck to paycheck. There are those who simply never have enough money, those that put the minimum away in their TSP and finally those who absolutely get it.
Those who get it just didn’t suddenly wake up one morning in Oz, a realm off limits to the rest of us; they had a financial plan and they followed it. Remember the equation below. Put it in a heavy traffic area of your home so that you can see it and let it be a constant reminder of your desire to retire in comfort and security.
Your plan is an achievable and trackable, weekly or monthly financial goal. Set the Goal – pay down your debts (those with the highest interest rates first), put money aside for a rainy day and then save for retirement (every little bit helps).
Having a Plan + Following the Plan = Retiring Well.
We are off to a good financial start!!
P. S. Always Remember to Share What You Know.
Federal and Postal Employee – Retirement Goal Setting
Retirement Goals
The importance of constructing a PLAN for moving into retirement with comfort and security cannot be overstated. You should have a laundry list of goals as you ready yourself to retire well. Constructing a plan, managing your TSP account, making sure you’ve run a Benefit Analysis BEFORE retirement is also incredibly impactful on the whether or not you will reach your retirement goals.
Goals are all very individual and personal. They are also meant to guide us in making your plan real and making it work. Even though they are highly individual and personal, there are core criteria common to setting goals.
Goals must be achievable; they should also have a time horizon. If you set a goal, then you should also entertain a time by which the goal can be realized.
Goals should be flexible. There is nothing wrong with having to move the goal post either closer or farther away.
Goals should be defined with the ability to track or evaluate progress.
Essentially, GOALS shoudl be; SPECIFIC, MEASURABLE, ATTAINABLE, REALISTIC and TIME RELATED.
Often when we think about life and living, putting something down on paper escapes us. We think about setting goals at work and linking time horizons to those goals. On the other hand, we fall significantly short when it comes to setting goals for our lives.
For the average worker – WORK – is business. In order to place the same importance on our lives, it might be advantageous to think of facing the challenges and opportunities of retirement as the BUSINESS OF OUR LIVES.
P. S. Always Remember to Share What You Know
An Economically Changing World
The world is changing. As Federal and Postal employees we face more economic challenges today than the majority of the current workforce has ever witnessed. The hardships of the Great Depression, we either read about in textbooks or heard stories from parents and grandparents, but hardly a reality for baby boomers and beyond.
Over the past several years, the reality of our finances and the turbulence of a global economy is a constant conversation at the average Federal and Postal employee’s families dinner tables. Yet, our responsibility, regardless if we are CSRS or FERS, to do what is necessary to face a retirement future with readiness, still remains. I remember parents saying, “Save for a rainy day.” The economic uncertainty of our times requires that we save for a tsunami. The cost of maintaining our standard of living is much higher today than it was for our parents.
In addition, economically, conditions have created differing and varying levels of responsibility for Federal and Postal retirees. Retirement incomes are increasingly being shared to support other family members, including adult children who are either unemployed or under-employed. Providing support to family members is what we do as Americans until they can get on their feet.
Because our plates are fuller than ever before in recent times, planning for a long life after retirement must be approached with care and a deliberate commitment to live well below our means. We can no longer economically live at our means and certainly not above our means, but below them in order to have a cushion of economic longevity. Remember, economically, the goal is to have your resources outlast you.
The technical aspects of the federal and postal employees’ retirement system from FEHB, Medicare, to FEGLI and your TSP are difficult to understand and much more difficult to master. There are such a vast number of technical pieces of the federal retirement system it seems to justify the use and consultation of both your HR office or a qualified retirement benefit expert.
Use PSRetirement.com’s easy access for more information on your TSP Account and Login information.
P. S. Always Remember to Share What You Know.
Baby Boomer – The Reality of ‘Now’
Baby Boomer: The Reality of ‘Now’
The baby boomer generation will be the first generation of retirees who will enter into retirement while their parents are still living. That is a reality because Americans are living longer. This means that in addition to baby boomers planning their own retirement future, they must also help and sometimes manage their aging parents’ retirement too. There are many questions that come to mind, but the main question about retirement is – “Will I have enough money?”
Many times family members neglect to communicate those things that will help to lighten the load on one family member or a few. Being a caretaker whether directly or indirectly is a challenge and that challenge can be exacerbated by the fact that aging parent also need care and attention. But that challenge can be made easier by building a strong support system of family, friends and the many resources now available to seniors living in retirement.
As a baby boomer, it is a good idea to begin looking into resources and options for your parents as well as yourself before it becomes a must. Taking the initiate to be proactive will save you a lot of time, money and stress.
If you are a baby boomer living in a community where the reality of taking care of a parent is imminent, it might be wise to start or join a community focus group that will look into the best options possible for your situation – where to live, how to live, how to manage the unexpected and how to enjoy retirement in difficult situations.
Having support is one of the strongest links to riding out a storm.
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Are your parents’ Medicare elections up to date?
