If you are a federal employee or postal worker that is looking to retire in the near future, it is important to know what a Thrift Savings Plan (TSP) is and how it works. If federal retirement is close for you, there are things about TSP you should know, contact the team at Federal Employee Benefit Coordinators (FEBC) for more information today!
What Is a Thrift Savings Plan?
A TSP is a savings and investment plan for federal employees and postal workers. It is tax-deferred and gives employees the same tax and saving benefits that corporations offer their employees under their respective 401(k) plans. Make sure you are current with all things TSP, especially since the recent TSP Transition has happened.
Why Should I Utilize a TSP?
Much like a 401(k), TSP benefits are numerous. If you leave federal employment, your TSP can be easily rolled over to an IRA or 401(k). Additionally, TSP participants receive immediate tax breaks and now have even more investment options with the new TSP Mutual Fund window.
Recent Changes
Thrift Savings Plans have recently undergone some significant changes and have others on the horizon. As of June 2022, there are plans for a new TSP mobile app that features a new interface. You can also interact with live agents and have access to over 5,000 new mutual funds.
Benefits
In comparison to your everyday IRA, TSPs have a far higher contribution limits. The difference between the two fluctuates, but it tends to be over $10,000. Investment fees are also far lower when you are dealing with TSP. Additionally, Thrift Savings Plans waive the 10% withdrawal fee that IRAs have if you are below the age of 59½, leaving federal service. TSPs waive this fee if you retire at age 55 or older.
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Are you a federal employee or postal worker facing potential retirement? Make sure that you are prepared and educated about your benefits and options — it can save and earn you money! Contact Federal Employee Benefit Coordinators now for more information.
