If you are a federal employee, your TSP or Thrift Savings Plan is one component of your retirement benefits provided by the federal government. The TSP is a defined-contribution retirement savings plan that functions in a similar way that an employee 401k functions in the private sector. Money can be invested pre-tax or after tax, employees can enjoy matching contributions from their agencies, and there are different fund options in which you can invest. There are 5 individual funds as well as 5 Lifecycle funds that are a mix of the individual funds. When choosing how to invest in your TSP it is important to take a variety of factors into consideration so that you can maximize your savings for your retirement. Below are 3 tips for TSP investing that we recommend.
3 Tips for TSP Investing
There has been a lot of buzz about President Trump’s proposed fiscal 2018 budget. The proposed budget would save the government trillions of dollars but many government programs would be impacted by the budget cuts as a result. If you are a federal employee, the proposed budget cuts may deeply impact something very important to your financial future – the federal retirement system. The proposed budget would cut spending on federal retirement programs by $3.3 billion over a 10 year period.
President Trump’s proposed budget would seek to cut contributions to federal employee’s retirement programs. Though the proposed budget will not necessarily be implemented as is – congress ultimately has to vote on the budget – if you are a federal employee, it may directly impact your retirement savings. Should President Trump’s proposed budget get enacted, it would be important to revisit your retirement plans as soon as possible and make necessary changes to give you the highest probability of meeting your goals.
There are various increases and decreases in President Trump’s budget so determining what it all means can be confusing. For example, though President Trump proposed a pay increase, the cut to federal retirement spending. The Washington Post elaborates on the five main takeaways for federal employees if President Trump’s budget is enacted as is:
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