Tag: TSP

Federal and Postal Employees – Choosing a Financial Professional

Matching Contributions: TSP

June 5, 2014 /by Dianna Tafazoli

TSP and Matching Contributions

How are federal employee Thrift Savings Plan (TSP) contributions matched? This is a question that showed up recently in our inquiry/comments in-box.

Federal and Postal employees covered under the (FERS) can receive matching funds for up to 5% of basic pay or salary. If an employee contributes 5% of the basic pay earnings each pay period during the course of a year, those funds will be matched..

The TSP matching is achieved dollar-for-dollar on the first 3% of basic pay and 50 cents on-the-dollar for the remaining 2% of the basic pay earnings. When choosing your TSP contribution amount make sure the amount is based on criteria that will maximize the benefits you are eligible to receive via TSP.

Check with your Human Resources Office (Postal employees can check their on LiteBlue or through PostalEase to be absolutely certain your TSP contributions are such that they will be spread out over 26 pay periods in order to get the maximum contributions match. You may also use the TSP Deferral Calculator at tsp.gov to determine the appropriate TSP contribution amount that will give you the 26 pay period scenario you desire.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Elective Deferrals and TSP

June 5, 2014 /by Dianna Tafazoli

TSP and Elective Deferrals

Thrift Savings Plan (TSP) Elective Deferrals are payroll deductions federal and postal employees ask their employer to withhold in order to make contributions to employer-sponsored retirement plan – the TSP.

Tax deferred contribution payments to traditional TSP and after-tax contributions to Roth TSP are classified as elective deferrals. These contributions cannot exceed the Internal Revenue Code’s (IRC) annul contribution limit for 2013 and 2014 of $17,500. The limit still applies whether contributions are combined (tax-deferred traditional or Roth after-tax contributions) or are a single elective deferral.

TSP catch-up contributions are not impacted by the IRC limit. Additionally, the agency’s automatic 1% and matching contributions are not classified as elective deferrals because they are not a part of an employee’s pay or salary.

Make certain you have a good understanding of the provisions and guidelines governing elective deferrals. If in doubt do not hesitate to contact the TSP representative in your Human Resources Office. You may also wish to speak with your chosen financial professional for some ideas about how to best fund your TSP.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Access your TSP.gov Account HERE

Contribution Limits for TSP

May 31, 2014 /by Dianna Tafazoli

A question about TSP contributions that always comes up in my training seminars is what happens to the agency contributions if I reach my annual TSP contributions limit to my Thrift Savings Plan (TSP)? When you reach your limit before the end of the year, of course, your contributions are suspended for the remainder of the calendar year. In that regard, it is always important to speak your TSP representative in your human resources office to make sure that your contributions are stretched out over 26 pay periods – you may also wish to work with a financial professional who is knowledgable about federal retirement needs who can help you look at additional options for savings too.

There are stop-alerts, as I call them, that prevent violating the current year TSP annual contributions limit set by the Internal Revenue Code (IRC) for limits on elective deferrals. In other words, the TSP system will not allow employee contributions to be made into the fund when the limit has been reached.

View Your TSP Contribution Limits HERE

Your agency and employee TSP contribtions work in tandem. As you make contributions to your TSP account so does your agency. Therefore, when your contributions are suspended so are the agency’s TSP contributions. The agency’s TSP contributions depend on the amount of contributions you are making during each pay period.

However, the agency’s one percent automatic TSP contribution continues even though your agency matching contributions and your contributions have stopped. All such contributions are limited to those employees classified under the Federal Employees Retirement System (FERS).

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Access your TSP.gov Account HERE

RCC and TSP

May 31, 2014 /by Dianna Tafazoli

I absolutely enjoy writing about subjects I think may help somebody get a better understanding of how to live their best life. So I thought TSP knows RCC had the makings of a RAP song and that if any of my students saw this post they wouldn’t think I was totally incapable of understanding RAP; and the rest of the reading audience would hang around to read the rest of the post.

Well, back to what I understand. RCC is Retirement Contribution Credits. Individuals who participated in the Thrift Savings Plan (TSP) during the 2013 calendar year might have qualified for the credit if they met the modified adjusted gross income criteria.

See which category fits your financial picture:

Married and filing jointly if your adjusted gross income did not exceed $59,000.00.

Head of Household – $44,250.00.

Single or Married filing separately or a qualifying widow or widower – $29,500.00.

Stay connected and informed on your TSP so that you don’t miss out on any benefits that can potentially improve your financial outlook now and in retirement.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Mobile TSP

May 31, 2014 /by Dianna Tafazoli

Oh, how the times have changed the Thrift Savings Plan (TSP). It was not that many years ago that the thought of transacting business from anywhere other than the actual physical location of the business was a remote thought at best. Now in the new millennium we can virtually never leave our homes and get more done than ever before imagined – accessing and impacting your Mobile TSP is no different.

Many federal and postal employees spend a tremendous amount of time in their cars traveling back and forth to work and just living. Cities and communities are so spread out that it is near impossible to navigate the course of one’s life without a vehicle.

The TSP is a part of the new millennium too, and has grown into something very new indeed, and is no longer your mom’s TSP. The TSP is on the road with you and has gone mobile. TSP is anywhere you need to be. TSP.gov is mobile friendly because the folks at TSP want to answer the needs of their customers. TSP mobile allows participants to use their smartphone to get to the mobile version of the TSP ‘MY ACCOUNT.’ The bonus is – there is absolutely no need to download a special application. The mobile application provides access to the same information available on TSP.gov (You can find out how to access your TSP here).

Your TSP does not stop there. The TSP is keeping up with technology that keeps its customers informed and on the cutting edge of services, products and programs that deliver. Who is following TSP? Find out by becoming a TSP follower on Twitter. TSP can be found tweeting out the latest and best information and paying close attention to what you have to say @tsp4gov.

It’s all there for you the tools and the information needed to help you make sound decisions about managing your TSP account and building an unshakeable retirement future.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

TSP Fraud, Bogus Websites, Phishing & Scams

TSP Fraud

TSP Fraud is very real. The internet and conducting business on line is an easy and convenient way of taking care of the many things we do within very tight time constraints in our daily lives.

No matter the convenience, letting our guards down for exercising caution should never be an option. Become thoroughly familiar with the TSP website. If correspondence looks suspicious and you feel uncomfortable, it is a safe bet that your gut is probably right.

www.TSP.Gov is the legitimate web address for reaching The Thrift Savings Plan on-line. There is no other legitimate web address. If you receive an email asking you to update information or reset your password you should be very wary. ‘Phishing’ is a strategy that unscrupulous entities use in an effort to gain your login and password information. Beware because the link that is attached to these emails might be attempting to direct you to a fraudulent website. These fraudulent sites have the capacity to steal your login information once you enter them.

If you think something is wrong, it is always a good idea to call the TSP to protect your account from fraud.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

TSP.gov Catch-up Contributions

There are many ways to manage your TSP.gov account and understanding your ‘Catch Up’ contributions and how they work can have a big impact. It pays to be very knowledgeable about what is potentially the trajectory of your life in retirement. The more you know about your TSP.gov account the better you are equipped to deal with the challenges that will inevitably arise in retirement.

A few TSP.gov tips might help you to be better prepared to live in retirement on your own terms. Did you know?

Your TSP.gov account balance is updated each business day. So if you want to know what is going on in your account and desire to have your hand on the pulse of your business, you can check on your TSP.gov account as often as you wish.

You can view historical interest rates. The annuity interest rate for annuities purchased in June of this year, 2014, will be 2.750% and 2.875% for annuities purchased in the month of May of 2014.

Catch-up contributions limits for ‘Qualified Plans’ (like 401k plans) and your TSP.gov account for 2014 is $5,500 the same as it was for 2013.

If you are age 50 or will reach that age during the calendar year and you have made the maximum employee contribution ($17,500) to your TSP.gov account which remains the same in 2014 as it was in 2013, you can make catch-up contributions to your TSP.gov account which allows people over 50 to contribute a combined total of $23,000 ($17,500 + $5,500 for catch-up).

Your total contributions (both that you contribute and that which is matched by your employer – or what is called the I.R.C. Section 415(c) limit) for 2014 is $52,000 increasing by $1,000 from 2013.

Take good care of what is yours because how well you take care of what you worked so hard to build will determine your level of comfort and security in retirement.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

TSP Loan – A Good Idea?

Thrift Savings Plan Loans – If you are thinking about taking out a loan here are some items to consider about possible a TSP Loan. TSP loan interest rates, for new loans, can be as low as 2.375%. I don’t think the rates can get much better. However, if you are thinking about taking out a TSP loan, you need to make sure you are exercising and implementing what you have learned about financial literacy.

There are a number of questions you need to ask yourself before you take out a TSP loan even if the rates are as good as they are. Interest rates are down and if you are thinking about getting a loan, making a house purchase or any other major purchase, the low interest rates we are currently enjoying is certainly a huge draw.

However, what if you are thinking about retiring soon, is it wise to take out a TSP loan from your TSP account? Consider this. Your TSP is a way to help you save for retirement while realizing matching funds from your agency if you are under the Federal Employees Retirement System (FERS). The TSP acts as a tax deferment for those employees under the Civil Service Retirement System (CSRS), because there are no matching funds from the agency.

If you take money from your TSP even via a TSP loan, you are impacting the value of your TSP account designed to enhance your finances in retirement. Also remember that a TSP loan is a loan and loans must be paid back. Even when opportunities sound good, be sure to evaluate your own individual situation and circumstances to determine what is the best fit for your retirement future.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Thrift Savings Plan – Take Five

For the Thrift Savings Plan (TSP) do April showers bring May flowers? – pretty catchy phrase, and often very true when forecasting the ebbs and tides of nature. But April also brought us something else other than soaking showers that made my back yard look like a jungle, it brought us Financial Literacy month and that means more focus on the Thrift Savings Plan for federal and postal employees.

As the world is changing and becoming more automated with a greater responsibility for each of us to be in charge of our own lives, including our finances; being financially literate is one of the most important tools of survival needed today – the Thrift Savings Plan is no different. To underscore the urgency of financial literacy, schools and civic organizations are beginning to teach children as young as pre-kindergarten age the merit of understanding appropriate and sound money management.

Just as these young children are learning new and different languages to communicate with a world whose diversity is immeasurable, becoming financially literate carries equality priority and importance. The world has changed and we must be ready even earlier to meet its challenges as well as its opportunities. Knowing the basics about the Thrift Savings Plan is a must for federal employees

During the monthly of April, the Thrift Savings Plan (TSP) invited participants to take FIVE for their future. Take FIVE minutes to make changes in your Thrift Savings Plan account. Contribute FIVE percent so that you will receive maximum matching contributions from your agency. Choose from FIVE core funds and FIVE life cycle funds and assess them for changes to make your Thrift Saving Plan money work better for you.

For the Thrift Savings Plan, when it rains it pours. Let the April showers that has brought some of the most beautiful flowers in May that I have seen in a long time, remind you to let your finances blossom as you make financial literacy is part of your plans to retire well.

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Is Your Thrift Savings Plan (TSP) Working For You?

Thrift Savings Plan (TSP) Withdrawal Options

Like all good providers of services and products

Like all good providers of services and products, the Thrift Savings Plan (TSP) wants to know from its customers how they are performing. More than 5,500 civilian and uniformed service participants took part in a TSP survey in 2013 to provide feedback on a host of services provided by the Thrift Savings Plan. The survey’s results were compared with a similar survey taken in 2011.

TSP Satisfaction Survey

The survey revealed that 87 percent of plan participants were satisfied overall with the performance of the TSP funds. Another 10 percent were neither satisfied nor dissatisfied and 3% were dissatisfied or very dissatisfied, showing an overall increase in satisfaction of 1 percentage up from the 2011 TSP survey.

On the surface those numbers look pretty good on the TSP side. However, the measure of how the TSP is doing is not solely in overall satisfaction or dissatisfaction, but those participants who were neither impacted or engaged enough to render an opinion either way. Those participants perhaps speak louder than any other participants in the group surveyed, because they are saying – we need more of something. The position of not expressing an opinion either way can speak volumes to an organization invested in providing top quality services to its customers such as the TSP.

I know in our MBA programs we are told to look at the satisfaction and dissatisfaction levels to gauge how an organization is doing when evaluating survey outcomes. But in the real world the undecided population is a group worth of deep consideration and concern and in the TSP survey this is no different.

The TSP survey also asked the participants about how they were doing on administrative services such as ease of accessing accounts on line. Once again 89 percent of those surveyed were very satisfied/satisfied with the information provided in the annual statement. 84 percent registered satisfaction with the ease of accessing their account on line. Ability to take out a TSP loan received 69 percent with the ability to transfer money from IRAs or other retirement instruments receiving a 57% satisfaction rate.

Overall from the prospective of how an organization is performing, the TSP is doing remarkably well not just by their own standards, but by the watchful and discerning eye of plan participants. The share what you know lesson here is to always participate in plan surveys when possible because it is one of the most important ways an organization can measure its performance and make improvements to the ultimate satisfaction of the TSP‘s customers.

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

RELATED TSP ARTICLES

For Postal Employees – LiteBlue and the TSP

Federal and Postal Employees – Choosing a Financial Professional

The Thrift Savings Plan (TSP)

Is All ‘Your’ TSP Money Actually Yours?

How To Best Fund Your TSP

Federal Retirement Benefit Analysis & Review

May 16, 2014 /by Dianna Tafazoli

Benefit Analysis for Federal Retirement

Successful Federal Retirement requires the gathering of as much information as possible about how your federal retirement benefits will work when you leave employment. Human Resources Offices should be available to answer your questions (Postal employees should visit LiteBlue and talk with a local professional). I would suggest perhaps doing a brown-bag lunch and inviting a representation from Human Resources who is a skilled Federal Retirement Benefits Specialist to go over your questions and concerns and get a Benefit Analysis performed.

Prepare a list of questions before hand. Form a group of individuals who would like to participate in the Retirement Brown Bag Forum and perhaps create a Benefits Review Form. The form should ask about all benefits you are eligible to transport into your federal retirement:

Questions you should have answers for during the federal retirement review and that would be answered if you have a federal retirement Benefit Analysis performed.

Your FEGLI (Life Insurance), the value of it in retirement and the potential cost to you as you age. Your beneficiaries and making certain your designations are updated and whether or not you should compare your FEGLI against other company’s plans before you retire.

Your FEHB (Health Insurance): Look at the coverage you have and evaluate whether it is right for you in retirement. Make certain you have made any changes as to who is covered on your policy. Often we select options and do not go back for a long time to update the options. This would be a good time to see where you are.

Your Thrift Savings Plan (TSP): Although your TSP Account is not kept in your eOPF, there are still questions you need to ask. Make sure that your beneficiary forms are up-to-date and that you are getting the best benefits from your participation (maximize when possible).

Dental and Vision (FEDVIP): Ask questions about this coverage as it usually is a coverage that is transportable but the cost is left to the employee entirely.

Long Term Care (FLTCIP): If you have not purchased a policy by the time you are 50, it might be prudent to look at policies outside of what your agency might offer. You can usually get a better deal in the market.

The Value of Your Unused Annual Leave (Annual and Sick) – Discuss how your sick leave can extend your service computation date to support your federal retirement benefit. Your annual leave check can act as leverage until you receive your first full annuity check.

Let this be a time of getting together with your colleagues and Human Resources to make sure you retire on your own terms – knowning everything you need to know about how your benefits work in retirement is the golden parachute you need to retire well.

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

RELATED ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Is Your Thrift Savings Plan (TSP) Working For You?

Law Enforcement Officer: Explanation of FERS Components for LEOs

May 8, 2014 /by Dianna Tafazoli

Law Enforcement Officer FERS Explanation

We have focused on the Law Enforcement Officer, but let’s take a brief moment to explain the 3 legs of the Federal Employees Retirement System (FERS). This post was prompted by an email question from a FERS employee.

The question: I would like a simple and clear explanation of the FERS retirement system. Can you help?

The answer is – we are going to give it our best shot. If more clarity is needed after the publication of this post, just tell us and we will use a different approach to get you to where you want to be.

The Federal Employees Retirement System (FERS) is made up of 3 parts: A Basic Benefit, the Thrift Savings Plan (TSP) and Social Security.

The FERS Basic Benefit is a defined benefit plan determined by two factors; the average high-3 annual earnings of an employee that represent the highest earnings during 36 consecutive months of federal service that would produce the highest average. In most cases, the highest average salary comes towards the end of the work career. However, that is not always the case.

The second factor in the FERS Basic Benefit is the employee’s length of creditable service. The calculation for the FERS Basic Benefit is different for LEOs than for regular FERS employees. An explanation of the formula can be viewed in previous posts on LEOs (LEO-FERS Basic Annuity and LEO Component Computation).

The next component of the 3 leg stool representing FERS retirement is Social Security. Earning 40 credits, approximately 4 per year over a 10 year period with a minimum age of 62 qualifies individuals for the Social Security benefit.

The last leg of the stool and potentially the largest component is the Thrift Savings Plan (TSP). The TSP is structured to build financial stability in retirement. TSP is portable and allows participants a wide-range of passive investment options. The agency contributes 1% of salary automatically whether the employee makes a contribution or not. The contributions become vested after 3 years of employment. Your TSP balance is yours to keep when you leave service.

Additionally the government will contribute from 1% to 5% in matching funds based on your level of contributions. The maximum TSP cap changes annually based on the rate of inflation. If inflation is flat, then there will be no change in the cap. It is important that employees maximize their contributions to the TSP in order to realize the greatest benefit from FERS retirement. Instead of only drawing a pension, FERS employees have the combination of a Basic Benefit, Social Security and TSP contributions.

Make certain that you speak with the TSP representative in your Human Resources Office to ensure your contributions are spread out over the 26 pay periods in order to receive maximum contributions from the government. If you max out contributions too quickly, you miss out on the government match. FERS is structured to provide employees with a retirement profile that will help them retire well.

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

To check your TSP balance check here

Which TSP Funds should you choose?

Related LEO Articles

What Is LEO Retirement

LEO Mandatory Retirement Age

Explanation of FERS Component for LEOs

LEO (Law Enforcement Officer) FERS Supplement

LEO Annuity Component Computations

Federal Law Enforcement (LEO) – Cost of Living Adjustments

Million Dollar LEO Question

Budgets Change Because Your Finances Change

April 24, 2014 /by Dianna Tafazoli

Budgets and Changing Finances

Are budgets forever? Can the budget you prepared 2 years ago help you manage your money today? The answer is NO. Budgets are not forever and what was true two years ago is not true today not where your budget is concerned.

Even if your income has not changed, expenses have gone up and perhaps some have decreased or even been eliminated. Your TSP balance has certainly changed and possibly the amount of FEGLI that you should own. Budgets are not static, but must change as circumstances in your life change.

Why do we need a budget? We need a budget to stay on track and monitor our expenses against our income. You may choose to keep your budget in an automated progam such as a spreadsheet like Excel or some other financial software program that you find suitable. You can also rely upon your bank / credit union or financial advisor to help you put together a realistic goal for both savings and expenses.

Keeping your records organized and in separate files will make getting ready to file your annual taxes a cinch. You will not have to run around collecting and sorting mountains of receipts kept in shoe boxes. I am not saying you shouldn’t use the shoe box method of filing. If you do, your file boxes should act as individual folders all containing unique information. You don’t have to take all the shoe boxes to your accountant, rather you can separate the materials out into individually marked envelopes for easy assessment.

Although, we live in an increasingly automated society many individuals are more comfortable doing things manually. The entire planning process and getting prepared for retirement is individual. The concentration and focus is more about you reaching your goals than on how you do it. We want to reach the finish line with our bags filled with everything we need to retire well.

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

Thrift Savings Plan (TSP) Withdrawal Options

April 13, 2014 /by Admin

The rules for your Thrift Savings Plan (TSP) are pretty straightforward while you are working, but they become increasingly more complex as you enter retirement and attempt to access the money that you have saved in your TSP.gov account.

You have 5 TSP withdrawal options for your Thrift Savings Plan that you can select from.

TSP Withdrawal Option 1) Leave your assets in the Thrift Savings Plan. If you do not need to access the money in your Thrift Savings Plan immediately you can defer your TSP withdrawals until as late as when you are 70 ½ years old. At that time you will be required to withdrawal a percentage of your Thrift Savings Plan based on IRS Rules for what is called Required Minimum Distributions.

TSP Withdrawal Option 2) Exercise one of two Thrift Savings Plan monthly payment options;

a. You can elect a monthly income from your TSP that will be based on the current value in your Thrift Savings Plan at the time and an assumed rate of return. You can access the Life Expectancy Monthly Payment Calculator through TSP.gov.

Note: you can make a one-time only change from TSP.gov computed life expectancy payments to a specified dollar amount later if you wish.

b. You can also specify an amount that you will receive as a monthly payment from your Thrift Savings Plan. The risk with this method is that if you choose a monthly income amount or a Rate of Return expectation that is too high – your monthly income may stop all together once your TSP.gov account has been depleted.

TSP Withdrawal Option 3) Elect to receive a One-Time, full or partial, withdraw from your TSP. Any withdrawal you make from your Thrift Savings Plan will be fully taxable. If you are under age 55 you will also be penalized with an additional IRS penalty. (other exceptions will apply).

TSP Withdrawal Option 4) Roll part or all of your Thrift Savings Plan to your IRA account. Rolling your Thrift Savings Plan into an IRA can oftentimes be a very good idea. The number of available investments that are available to you through an IRA is much greater than through your Thrift Savings Plan. You can choose nearly any investment or combination of investments that make the most sense to you and your family.

Note: If you over 55 but younger that 59 ½ you should be aware that any withdrawal made from your IRA prior to age 59 ½ will be subject to a 10% penalty in addition to income tax.

TSP-75 Form

TSP Withdrawal Option 5) Purchase an ‘Income Annuity” with all or some of your Thrift Savings Plan balance. Electing to receive an Annuity through your Thrift Savings Plan will give you a cash payment for the remainder of your lifetime. The amount of your payment is based on your Thrift Savings Plan balance and the current Thrift Savings Plan “Annuity Interest Rate Index.” The TSP.gov Annuity Interest Rate Index is a rate that will fluctuate based on the current interest rate market. Whatever the Annuity Index Rate is at the time you make this election will be the effective rate of return for your Thrift Savings Plan for the rest of your life.

Go to Annuity Index Rates for current and past rates.

Therefore, you will want to consider what the Annuity Index Rate is at the time of purchase. If you are considering this option you should also talk with a knowledgeable financial professional to ensure that you are getting the best possible return on your investment dollars. You may wish to explore what is called ‘Pension Maximization’ or other options that are available to you.

Note: You should speak to a Federal retirement expert before you make your income or rollover election decision. There are financial professionals who specialize in Federal and Postal retirement planning that can help you maximize your retirement income and benefits.

As you begin to put your plan together and decide which of the options above fit your needs best – you will begin to realize that there are a lot of moving parts and some potential pitfalls that may reduce your retirement income. You will also realize that there is likely a ‘Best’ solution for you and your family when it comes to how you access your Thrift Savings Plan.

For Postal Employees – TSP.gov elections can be made through LiteBlue

TSP In-Service Withdrawals

TSP Loans

March 22, 2014 /by Dianna Tafazoli

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

Additional TSP Considerations

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

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

To access your TSP Account click here

Thrift Savings Plan: Why The TSP?

March 20, 2014 /by Dianna Tafazoli

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.

Click here for TSP Roth information.

Have a TSP L Fund – want to know more

P. S. Always Remember to Share What You Know

PSRetirement.com

TSP: Is All ‘Your’ TSP Money Actually Yours

March 20, 2014 /by Dianna Tafazoli

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.

RELATED TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional