TSP – Thrift Savings Plan Funds Types and How it Works

The Thrift Savings Plan (TSP), is a retirement savings plan similar to 401(k) plans offered to private sector employees. TSP benefit plan for members of the armed forces as well as retirees from the United States civil service. TSP will have more than $827.2 billion in assets under management as of December 31, 2021, and approximately 6.5 million participants, of which approximately 3.9 million will be actively participating through payroll deductions.

Eligibility: Your eligibility for the TSP is determined by your retirement plan. If you are in one of the following groups, you are eligible to participate:

  • A federal employee who is covered by the Federal Employees Retirement System (FERS).
  • A federal employee who is covered by the Civil Service Retirement System (CSRS).
  • A member of the uniformed services.
  • A civilian in certain other categories of federal service, such as some congressional positions and some justices and judges. If you are unsure of which retirement system applies to you, you can inquire with your personnel or benefits office.

TSP.Gov Login

How do I log in to my TSP.Gov or Thrift Savings Plan account?

  • First visit the TSP.Gov on your mobile or Desktop, Tablet.
  • You can sign in to the Thrift Savings Plan account using Username and Password.
  • The first uses your direct Thrift Savings Plan account number, and the other uses your TSP User ID and password. If you forgot your TSP password, you can reset your TSP password for more visit TSP Login.
Thrift Savings Plan Login

NOTE: During this TSP account set up process and in order to secure your account, you may be asked to complete TSP’s identity risk assessment or provide proof of identity through a third-party service provider. Information collected during this process is not used or stored by this vendor outside the initial account set up process.

Benefits of Your TSP.Gov Account

The Thrift Savings Plan was created to provide you with a long-term savings and investment strategy for retirement. The Thrift Savings Plan offers a number of benefits for retirement savings, including the following:

  • Automatic payroll deductions.
  • A diverse selection of investment options, including individual funds, and automatic payroll deductions professionally designed lifecycle funds that mix individual funds with a focus on particular target dates a mutual fund window to give you more control over your investments.
  • A choice of tax treatments for your contributions traditional (pre-tax) contributions with tax-deferred investment earnings. Roth (after-tax) contributions with tax-free retirement earnings if you meet IRS requirements.
  • Low administrative and investment expenses.
  • Access to your money while you are employed by the federal government.
  • Death benefits for your spouse in the event of your death.
  • A variety of distribution options in retirement and a mutual fund window.

How the Thrift Savings Plan Works

There are multiple ways of putting resources into Thrift Savings Plan. Some examples include:

  • Tax-deferred contributions into a traditional TSP means withdrawals are taxed in retirement) and after-tax investments in a Roth TSP means withdrawals are not taxed in retirement are examples of tax-deferred investments.
  • Automatic payroll contributions.
  • Agency matching contributions.
  • The contribution limit for 2023 is $22,500, up from $20,500 in 2022, regardless of the type of TSP or contribution structure you select. In 2023, employees over the age of 50 can also make $7,500 in catch-up contributions, up from $6,500 in 202.

How to Invest in TSP.Gov

For your retirement, Thrift Savings Plan offer a variety of investment choices. From a short-term U.S. Treasury security to domestic and international stock index funds, you can select your own investment mix. Or, if you’d rather, go with one of Thrift Savings Plan Lifecycle (L) Funds, which use a professionally chosen investment mix to provide a well-balanced investment strategy based on when you’ll need money.

tsp funds

Thrift Savings Plan Funds Types

The Thrift Savings Plan offers a choice of six funds and a mutual fund option:

  1. The Government Securities Investment (G) Fund: The G Fund invests in U.S. Treasury securities with a short maturity. You have the chance to earn interest rates that are comparable to those on long-term government securities without having to worry about losing your investment. The U.S. government assures that principal and interest payments will be made. The market yields of all U.S. Treasury securities having a maturity date longer than four years are used to compute the interest paid on the G Fund securities each month; the interest rate fluctuates each month.
  2. The Fixed-Income Index Investment (F) Fund: A separate account that tracks the Bloomberg Barclays U.S. Aggregate Bond Index holds the investments for the F Fund. This is a comprehensive index that covers the corporate, foreign government (issued in the U.S.), mortgage-backed, and U.S. government sectors of the U.S. bond market. Over the long run, this fund gives you the chance to generate returns that are higher than those of money market funds (especially when interest rates are on the decline).
  3. The Common-Stock Index Investment (C) Fund: The Standard & Poor’s 500 (S&P 500) Stock Index is tracked by the C Fund, which invests in a separate account. This market index consists of 500 major to medium-sized American corporations’ stocks. You have the chance to generate the greater investment returns connected with equity investing.
  4. The Small-Capitalization Stock Index Investment (S) Fund: A stock index fund that tracks the Dow Jones U.S. Completion Total Stock Market (TSM) Index is used to invest in the S Fund. Small and medium-sized U.S. businesses that are not included in the S&P 500 index are included in this market index. You can take advantage of it to potentially earn higher investment returns than those found in “small cap” investments, albeit with greater volatility.
  5. The International-Stock Index Investment (I) Fund: The I Fund is put resources into a stock record store that tracks the MSCI EAFE (Europe, Australasia, Far East) Record. This is a comprehensive international market index that includes primarily large businesses from over twenty developed nations. It provides you with the opportunity to increase your portfolio’s equity exposure worldwide by investing in international stock markets.
  6. Specific Lifecycle (L) funds and also mutual Fund Window: Participants who may lack the time or expertise to manage their TSP retirement savings are the target audience for the L Fund. The L Funds are based on the idea that investors who won’t need their money for a long time are willing to take on more risk in order to get higher returns. As the need for income gets closer, the funds automatically adjust to reflect a lower capacity to tolerate risk. The most appropriate L Fund is the one that most closely matches your time horizon, or the year in which you anticipate beginning withdrawals from your TSP account.
tsp funds types

Frequently Asked Questions

Faq

The C, S, and I funds are the more aggressive of the funds in the TSP. The reason they are called “aggressive” is because they have a much higher chance of sustaining major growth over time. But because of this, they can also be much more volatile than the G and F funds.
Eligible rollover distributions of your traditional balance may be rolled over to a traditional IRA, an eligible employer plan, or a Roth IRA. taxed in the current year, and no income tax will be withheld. You won't be taxed on this money until you withdraw it from the traditional IRA or the eligible employer plan.
20 percent. If a TSP account owner receives a single payment, the TSP generally must withhold 20 percent for federal income tax. This federal withholding will also occur if the TSP account owner chooses to receive the account balance in monthly payments over a period of less than 10 years.
The rule of 55 is a great feature of your Thrift Savings Plan that helps early retirees. This IRS rule means that those who leave service in the year they turn age 55 or later can take TSP withdrawals without penalty.
The average TSP balance has grown steadily in the last decade, reaching the six-figure mark in 2013. As of 2021, the average TSP balance for FERS participants was $181,279, while the average TSP balance for CSRS participants was $194,424.
Average TSP account balances for Uniformed Service Members crested over $40,000 by the end of 2021, while balances for new 'Blended Retirement System' (BRS) participants reached close to $10,000 in just four years since the BRS became operational.
The G fund.
The G fund is generally the safest option as it invests in government securities. Although you won't lose money investing in this fund, your rate of return will be low. This may be a good option if you are close to retirement.
In addition to making regular TSP contributions, you may also make TSP Catch-up contributions, if you are age 50 or older (or will be turning age 50 in 2023). The 2023 IRS annual limit for Catch-up contributions is $7,500. This amount is in addition to the regular TSP limit of $22,500.
The annuity interest rate index was 2.075% – the February 2022 rate for TSP annuities. Monthly payments based on the IRS life expectancy table would begin at $1,045 and would have reached $2,247 at age 90.
Pros - Your money can continue to be invested and may grow in value over time. Cons – You are limited in your investment choices – you can only invest in the specific funds in the TSP.
A) You can elect to contribute from 1 to 100 percent of any incentive pay, special pay, or bonus pay (even if you're not currently receiving them)as long as you elect to contribute at least 1% from your basic pay. You cannot contribute from sources such as housing or subsistence allowances.
You can keep your TSP account after you separate from federal service as long as you have a vested balance of $200 or more. Many participants choose to keep their money in the TSP because of the TSP's low-cost funds.
Roth TSP: Which One Is Right for You? The primary difference between Roth and traditional TSPs is how they're taxed. Specifically, a traditional TSP is better if you want to leverage your account to decrease your current income taxes and pay for withdrawals during retirement.

TSP New features

New tools and features are now available to you, enhancing your TSP experience even further. The ability to execute the majority of transactions quickly and securely online is one of these new features, as are multiple ways to get in touch with TSP personnel if you need assistance and flexibility in how you access My Account. The time has come, if you haven’t already, to set up your new login for the New My Account and utilise all the new TSP tools and features.

How Do I Contact TSP Administrators?

Thrift Savings Plan Thriftline can be reached at 1-877-968-3778, Monday through Friday, from 7 a.m. to 9 p.m. Eastern Time. Additionally, there is a non-toll-free international phone number at 404-233-4400 and for general inquiries, you can email [email protected]. By dialing 711, individuals with hearing or speech impairments can access the 711 TTS Relay. AVA, the TSP virtual assistant, can also be used from your Thrift Savings Plan account page. Thrift Service Center, C/O Broadridge Processing, PO Box 1600, Newark, NJ 07101-1600, TSP General Mailing Address.

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Read also: Move money into the Thrift Savings Plan TSP Share price calculation TSP.Gov Form 70 Form TSP-70 General Information And Instructions Leaving the Federal Government TSP Benefits Who Return to Federal Civilian Service Returning to the Federal Government TSP.Gov New Features TSP Withdrawal Rules and Options