Federal Employees Urged To Keep Minimum Amount In TSP
Have you considered getting out of the federal Thrift Savings Plan (TSP) upon retirement or when leaving the government sector for a private one? It can be a good thing for some people, but not for others.
Some people who left the TSP were able to diversify their investment choices and become more active with their portfolios. They were provided with more options than the TSP’s C Fund (S&P 500), F-fund (bonds) and G Fund (Treasury securities and more.
Some folks will attempt to integrate themselves back into the Thrift Savings Plan; perhaps because of the really low administration fees once they notice the fees are outside the plan. They may have made more money outside the plan, but the fees they pay are offsetting the gains made.
Some folks missed how easy to work with the L funds, which adjust automatically when necessary.
If a person closes their account out totally or didn’t leave a minimum amount in the TSP, they’re unable to return to it. However, if they leave just $250 in the account, they can come back and start investing in the plan once more.
According to the Federal Retirement Thrift Investment Board, accounts with $200 or less cash out automatically. Therefore, a person should have a minimum of $250 in their account if they’d like to come back. That $250 should be seen as an insurance policy.
Congress, as it currently stands, is set to approve a measure that makes TSP even friendlier and ensure a flexible TSP withdrawal process. Of course, the legislative stance makes things more complicated than they really are. But, should it become law, investors may stick with the TSP instead of leaving and taking all their money with them.