Videos and resources

Your TSP Investment Options: The Lifecycle Funds

The TSP has a selection of individual and lifecycle funds that let you diversify your retirement savings. You can choose to invest your TSP dollars in everything from short-term U.S. Treasury securities to index funds comprised of domestic and international stocks. In this video, we’ll talk about the professionally designed Lifecycle Funds, also known as the L Funds. If you don’t have the time, experience, or interest to manage your TSP retirement savings, consider one of the L Funds.

Each L Fund features a combination of the five individual funds (G, F, C, S, and I) that is appropriate for your “time horizon” or the future date at which you plan to start withdrawing the money in your TSP account.

Here’s how it works:

The L Funds assume that the farther you are away from needing your money, the more you are able to tolerate risk. Therefore, they give you the opportunity to enjoy the potentially higher returns associated with investing in the stock markets. But the funds continually adjust, so as the time nears for you to withdraw your money, it is more conservatively invested. That way, you’re not exposing your entire savings to unexpected market changes right when you need the income.

As with all investments, there are risks. The L Funds carry the same risks that are associated with all of the underlying individual TSP funds. Watch our other fund videos for more information.

To find out which L Fund might be right for you, or to learn about the other TSP funds, watch our entire series of fund videos. Or visit tsp.gov to review our fund information sheets.

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Your TSP Investment Options: The G Fund

The TSP has a selection of individual and lifecycle funds that let you diversify your retirement savings. You can choose to invest your TSP dollars in everything from short-term U.S. Treasury securities to index funds comprised of domestic and international stocks.

In this video, we’ll talk about the Government Securities Investment Fund, also known as the G Fund.

When you put your money in the G Fund, where does it really go? It’s invested in short-term U.S. Treasury securities specially issued to the TSP. It allows you to earn interest rates similar to long-term government securities with no risk of principal loss, because the payment of principal and interest is guaranteed by the Federal Government.

Here are a few more things you need to know

The G Fund is the default investment fund for all participants who are newly enrolled (or automatically enrolled) in the TSP. This means that unless you make a request to have your contributions invested in the other options, or distribute money that’s in your account right now to the other funds, all of your TSP savings will remain invested in the G Fund.

There’s a great benefit to having the G Fund as an investment: You’ll never lose money as long as you’re in it.

But there can be a downside to having all of your money in the G Fund if you won’t need your retirement savings for a while: You won’t have an opportunity to enjoy the potentially higher long-term returns of the bond and stock markets.

Want to know more about the G Fund or any of the other TSP investment options? Watch our entire series of fund videos. Or visit tsp.gov to review our fund information sheets.

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Your TSP Investment Options: The F Fund

The TSP has a selection of individual and lifecycle funds that let you diversify your retirement savings. You can choose to invest your TSP dollars in everything from short-term U.S. Treasury securities to index funds comprised of domestic and international stocks.

In this video, we’ll talk about the Fixed Income Index Investment Fund, also known as the F Fund.

When you put your money in the F Fund, what are you getting? The F Fund is invested in an index fund that tracks the performance of the Barclays Capital Aggregate Bond Index. This index is comprised of Treasury and Agency bonds, asset-backed securities, and corporate and non-corporate bonds.

Here are a few more things you need to know:

There are risks:

• The F Fund moves up and down with returns in the bond market.
• Also, there's a chance that principal and interest on bonds that comprise the index will not be paid, or that principal will be paid early if interest rates fall.
• Finally, there's a chance that your F Fund investment may not grow enough to offset inflation, which chips away at your buying power.

But with risk comes reward. In the F Fund, you have the opportunity to earn potentially higher rates of return, over the long term, than you would by only investing in the G Fund.

Want to know more about the F Fund or any of the other TSP investment options? Watch our entire series of fund videos. Or visit tsp.gov to review our fund information sheets.

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Your TSP Investment Options: The C Fund

The TSP has a selection of individual and lifecycle funds that let you diversify your retirement savings. You can choose to invest your TSP dollars in everything from short-term U.S. Treasury securities to index funds comprised of domestic and international stocks.

In this video, we’ll talk about the Common Stock Investment Fund, also known as the C Fund.

When you put your money in the C Fund, what are you getting? The C Fund holds all of the stocks in the Standard & Poor’s 500 Index. You probably know it as the S&P500. It’s made up of the stocks of 500 large to medium-sized U.S. companies.

Here are a few more things you need to know:

There are risks:

• The C Fund moves up and down with the stock market in response to overall economic conditions.
• There's also a chance that your C Fund investment may not grow enough to offset inflation, which chips away at your buying power.

But with risk comes reward. In the C Fund, you have the opportunity to earn potentially higher rates of return, over the long term, that are associated with owning the largest companies in the United States.

Want to know more about the C Fund or any of the other TSP investment options? Watch our entire series of fund videos. Or visit tsp.gov to review our fund information sheets.

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Your TSP Investment Options: The S Fund

The TSP has a selection of individual and lifecycle funds that let you diversify your retirement savings. You can choose to invest your TSP dollars in everything from short-term U.S. Treasury securities to index funds comprised of domestic and international stocks.

In this video, we’ll talk about the Small Capitalization Stock Index Fund, also known as the S Fund.

When you put your money in the S Fund, what are you getting? The S Fund is invested in an index fund that tracks the performance of the Dow Jones U.S. Completion Total Stock Market Index. It’s made up of small and medium-sized U.S. companies that are not included in the S&P 500 index.

Here are a few more things you need to know:

There are risks:

• The S Fund moves up and down with the stock market in response to overall economic conditions.
• There’s also a chance that your S Fund investment may not grow enough to offset inflation, which chips away at your buying power.

But with risk comes reward. In the S Fund, you have the opportunity to earn potentially higher rates of return, over the long term, that are associated with owning small and medium sized U.S. companies.

Want to know more about the S Fund or any of the other TSP investment options? Watch our entire series of fund videos. Or visit tsp.gov to review our fund information sheets.

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Your TSP Investment Options: The I Fund

The TSP has a selection of individual and lifecycle funds that let you diversify your retirement savings. You can choose to invest your TSP dollars in everything from short-term U.S. Treasury securities to index funds comprised of domestic and international stocks.

In this video, we’ll talk about the International Stock Index Investment Fund, also known as the I Fund.

When you put your money in the I Fund, what are you getting? The I Fund is invested in an index fund that tracks the performance of the Morgan Stanley Capital International EAFE Index. It’s primarily made up of large companies in 22 developed nations.

Here are a few more things you need to know:

There are risks:

• The I Fund moves up and down with the stock market in response to overall economic conditions.
• The I Fund may fluctuate as the EAFE Index responds to changes in the value of the U.S. dollar in relation to other currencies.
• There’s also a chance that your I Fund investment may not grow enough to offset inflation, which chips away at your buying power.

But with risk comes reward. In the I Fund, you have the opportunity to earn potentially higher rates of return, over the long term, that are associated with owning international companies.

Want to know more about the I Fund or any of the other TSP investment options? Watch our entire series of fund videos. Or visit tsp.gov to review our fund information sheets.

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Hi, I’m Dharmesh with the TSP.

Question: Do you know who will receive the money in your TSP account when you pass away? If you don’t, then you need to take some time to ensure your money goes exactly where you want.

If you’d like your TSP account to be distributed according to the statutory order of precedence, you don’t have to change a thing. Visit the beneficiary section of tsp.gov to read the full statutory order of precedence.

If you don’t want your TSP account distributed in the order of precedence, complete Form TSP-3, Designation of Beneficiary. You can download the form from tsp.gov or call the ThriftLine at 1-877-968-3778 and choose option 3 to request a copy.

Return the completed, original form directly to our address on the form or fax it to the number provided in the instructions. Do not submit Form TSP-3 to your agency or service. Be sure to make a copy of the form for your records.

If you don’t remember whether you’ve submitted a Form TSP-3, you can find out by calling the ThriftLine at 1-877-968-3778 and choosing option 3 to speak with a Participant Service Representative. And now you know.

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Hi, I’m Robyn from the TSP. We get a lot of questions about stopping, changing, and starting TSP contributions, and I’m here to help.

Check with your agency’s or service’s payroll office about its procedures for making an election to start, change, or stop your TSP contributions. They may tell you to use your agency’s or service’s electronic payroll or benefits system.

If your agency or service accepts a paper form, you can download and complete the TSP election form from tsp.gov, use the form they give you, or call the ThriftLine at 1-877-968-3778 and choose option 3 to have it sent to you. And now you know.

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Hi, I’m Adrion from the TSP. Have you changed where you live recently? Or will you sometime this year?

It’s crucial that you keep your mailing address up to date so that you receive important information about your TSP account that might not be available online. How you change your address with us depends on whether you still work for the federal government.

If you’re currently a federal employee, you must report your correct address to your agency. Since your agency is responsible for maintaining information about you and submitting it to us if you’re still employed, we can’t accept address changes directly from you.

If you’re no longer a federal employee, you can log into the My Account section of tsp.gov, visit “Profile Settings,” and review the address listed there. If you need to update it, simply make any necessary changes while you’re logged in to My Account. Or you can fill out Form TSP-9, Change in Address for Separated Participants, and fax or mail it to us.

If you’re an active duty uniformed services member, you can update your address through the myPay website. Just make sure that you log in and go to the TSP section to change your TSP address. If you change it in the “Correspondence Address” section of myPay, it will not change your TSP address. And now you know.

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Hi, I’m Kevin from the TSP, and I’m going to talk about catch-up contributions. Somewhere between life events and meeting daily expenses, your retirement savings may have fallen short. If you’re behind, you can make contributions that may allow you to ‘catch up.’

Starting in the year you turn 50, you can make catch-up contributions to your TSP account that exceed the Internal Revenue Code’s annual elective deferral limit. To be eligible to make catch-up contributions, you must expect to contribute the maximum amount allowed of regular employee contributions for the year to the TSP, or to an equivalent tax-deferred employer plan.

To start, stop, or change your catch-up contribution election to your TSP account, use Form TSP-1-C, Catch-Up Contribution Election (or Form TSP-U-1-C for uniformed services). Your catch-up contributions will stop automatically when you reach the catch-up contribution limit, or at the end of the calendar year—whichever comes first.

You must make a new catch-up contribution election each calendar year by completing and submitting a new form. You can download the form from tsp.gov or call the ThriftLine at 1-877-968-3778 and choose option 3 to request a copy. And now you know.

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Hi, Mei-Shan here, from the TSP.

You might be wondering if you’re able to keep your money in the TSP after you leave federal service. I’m happy to tell you the answer is YES! You can leave your entire account balance in the TSP when you leave federal service if the balance is $200 or more. You can continue to enjoy earnings and low administrative expenses.

Once you leave federal service, you’ll no longer be able to make employee contributions. However, you can transfer money into your TSP account from IRAs and other eligible employer plans, but not from Roth IRAs.

Your account will continue to accrue earnings, and you can continue to change the way your money is invested in the TSP investment funds by making interfund transfers. And now you know.

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Hi, I’m Lazetta from the TSP. We know life happens, and you might be tempted to take a loan from your TSP account. If you do, be aware that taking a TSP loan might cost a lot more than you think.

When you take out a loan from your TSP account there are some obvious costs to consider:

• There’s a loan fee of $50 for administrative expenses deducted from the loan check, — you temporarily deplete your balance, and — you must repay your loan with interest.

Some costs are a little less clear:

• All loan repayments are ‘after-tax,’ which means you’ll lose the tax benefit on whatever portion of your loan consisted of Roth money, so you’ll be taxed twice AND will have to pay tax twice on the portion of your payment that represents interest, and — because your account balance is depleted, you’ll lose the compound interest you would have earned on that amount had you not taken out the loan.

Remember: the purpose of contributing to the TSP is to provide you with retirement income, not to build up a balance to borrow from. So, think twice before you take a TSP loan. Your TSP account and your future self will thank you! And now you know.

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If you’re one of the many service members who have opted into the blended retirement system this year, congratulations on making this important decision for your future, but there’s one more step.

Your contributions are not automatic if you opted into BRS. They don’t happen unless you choose to make them. If you skip that important step, you’ll miss out on free money that you’ve earned from your service.

Now that you’ve opted in your service has created a TSP account for you. If you didn’t already have one and automatically contributes an additional 1% of your basic pay to it. But if you aren’t contributing your own money to the TSP you could miss out on hundreds of dollars this year alone.

You can contribute as little as 1% of your pay each pay period or as much as the IRC allows each year. However contributing at least 5% of your basic pay is the only way to get the full match available from your service.

This part does not happen automatically if you opted into BRS. You need to take action. You also need to decide whether to make Roth or traditional contributions and Our is “Is Roth Right for Me?” video explains the difference.

If you haven’t already, log into your payroll system to get more of the match you’ve earned from your service. And Now You Know.

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Hi, I’m Amanda, from the TSP. As you know, fraud can take place every day in a variety of ways.

As a TSP participant, you should know how to protect your account against various types of fraud. Private parties offering assistance with your TSP account, including third party mobile apps, have not been approved, endorsed, sponsored, or authorized by the Federal Retirement Thrift Investment Board, which is the independent federal government agency that administers the TSP.

If you’re unsure whether correspondence or telephone calls claiming to be from the TSP are authentic, DO NOT provide any personal or financial information to them. If you have questions or if you need to report any suspicious activity involving your TSP account, call us at 1-877-968-3778 and choose option 3 to speak to a Participant Service Representative. And now you know.

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Hi, I’m Chris from the TSP. We get a lot of questions about Roth versus traditional contributions. Choosing between traditional and Roth contributions can be confusing.

First, think about if it would benefit you more to pay taxes NOW or while you’re in retirement.

As your income goes up, your tax bracket goes up, which means you’ll end up paying a higher percentage of your income in taxes.

If you think you’ll pay a lower percentage of your income in taxes during your retirement years than you’re currently paying, you might choose to make traditional/pre-tax contributions.

On the other hand, if you think you’ll pay a higher percentage of your income in taxes during your retirement years than you’re paying at your current salary, you might choose to make after-tax (Roth) contributions, since the earnings have the potential to be withdrawn tax-free as long as you meet certain IRS requirements.

The bottom line is, it’s a tax decision based on your current tax rate relative to what you expect your tax rate to be when you retire. For more information, check out our videos, “Is Roth TSP Right For Me?” – Civilian and uniformed services – at youtube.com/tsp4gov. And now you know.

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Hi, Ellie here, from the TSP. In this video you’ll learn how to change the way your money is among the TSP’s funds. To change which funds you invest in, there are two transactions you can make. A contribution allocation tells us how you want to invest NEW money coming into your account.

An interfund transfer, or IFT, allows you to change the way money ALREADY in your account is invested.

Remember, you’re allowed two IFT’s in a calendar month. After that you can only transfer money into the G Fund. You may request a contribution allocation or an IFT by logging into My Account at tsp.gov and visiting the “Online Transactions” menu on the left. You can also call the ThriftLine at 1-877-968-3778 and follow the automated prompts. And now you know.

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Hi, I’m Amanda from the TSP’s social media team, and I’d like to share the different ways to change your TSP account password.

Have you ever lost your TSP online password and had to wait to get a new one mailed to you? Now you’ve got a couple more convenient options. If you forget or lose your password, go to the My Account section of tsp.gov, click on “Forgot your password?” and follow the prompts. If you know your password and want to change it, log into My Account, visit “Profile Settings,” and click on “Create Your Password.”

Or, you can call the ThriftLine at 1-877-968-3778, press option 3, and a Participant Service Representative will help you. And now you know.

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The TSP has taken a big step with a Roth option. Find out if Roth TSP is right for you.

We all want to succeed financially, maximize our savings, watch our money grow, and enjoy the payoffs of wise financial planning.

To make the right decisions you have to understand where you are now and where you want to be down the road; you need a strategy. The fact that you’re watching this video is a great start. You probably already have a Thrift Savings Plan account or know about the plan and have heard that the TSP now offers a Roth option.

Roth TSP is a tax strategy for your retirement savings that may pay off for you down the road. It’s different from Traditional TSP, which takes out your contribution BEFORE taxes; your Roth TSP contribution is taken out of your pay AFTER taxes. With Roth, you contribute after-tax money at your current tax rate; then you’ll never pay taxes on those contributions again.

When you withdraw the money at retirement, your contributions and even your earnings are tax free if you’re 59 and 1/2 and your first Roth contribution was at least 5 years ago. You may pay higher taxes now, but making Roth contributions may help you save on taxes later.

The key question to ask yourself is, do you think you’ll be in a higher tax bracket when you need your TSP account? You may be in the early stages of your career and expect to earn more as the years go by, you may choose to work after you start to withdraw your TSP account, or you may think tax rates will go up. Any of these may mean Roth is right for you.

Having a TSP strategy that is tailored to you will give you the comfort of knowing that you’re doing the right thing for your future. Find out if Roth TSP is right for you by taking it one step at a time.

First, understand your current situation. Do you know your current tax rate? Are you better off choosing TSP contributions to pay taxes now, or in the future? Remember, no one has a crystal ball to predict the future. You should discuss this decision with a financial planner or tax advisor.

Second, look really closely at the Traditional and Roth options. To help you with these options, we’ve put together a lot of information and it’s all here on the website. We’ve also developed a Contribution Decision Wizard that lets you see the potential impact your decision will have now and later, when selecting Roth TSP or selecting Traditional TSP.

Third, develop your own plan. This plan might just revolve around your TSP strategy, which may be Roth or Traditional, or a combination of both. Or, it might include other retirement funds, tax strategies, and assets, depending on your own financial situation. Just remember, you can’t convert your Traditional TSP account balance to Roth TSP and you also can’t transfer Roth IRAs to Roth TSP.

Finally, get started! Once you’ve reviewed your current situation, your TSP options, and your retirement goals, decide if Roth is right for you. Or, if you’ve already decided that Roth TSP is right for you, use your Agency’s Electronic System or download and complete Form TSP-1.

As with all financial planning, you should re-evaluate your decisions periodically. So, even if Roth TSP may not be your best strategy now, be sure to check in whenever your life situation changes.

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The TSP has taken a big step with a Roth option. Find out if Roth TSP is right for you.

We all want to succeed financially, maximize our savings, watch our money grow, and enjoy the payoffs of wise financial planning.

To make the right decisions you have to understand where you are now and where you want to be down the road; you need a strategy. The fact that you’re watching this video is a great start. You may already have a Thrift Savings Plan account or know about the plan and have heard that the TSP now offers a Roth option.

Roth TSP is a tax strategy for your retirement savings that may pay off for you down the road, especially if you’re earning tax-exempt pay. That’s because both your contributions and the associated earnings will be tax-free at withdrawal, if you meet the IRS requirements.

Roth TSP is different from Traditional TSP, where your contribution is taken out of your pay BEFORE taxes; your Roth TSP contribution is taken out AFTER taxes. With Roth, you contribute after-tax money at your current tax rate; then you’ll never pay taxes on those contributions again. If you’re receiving tax-exempt pay, you’ll be able to further maximize your tax savings by making up to $17,000 in Roth contributions.

When you withdraw the money at retirement, your contributions and even your earnings are tax-free if you’re 59 and 1/2 and your first Roth contribution was at least 5 years ago. With Roth, you pay taxes on your taxable income now but you may save on taxes later.

The key question to ask yourself is, do you think you’ll be in a higher tax bracket when you need your TSP account?

For example: you may be in the early stages of your career and expect to earn more as you receive promotions over the years, you may choose to work after you start to withdraw your TSP account, or you may think tax rates will go up.

Any of these may mean Roth is right for you.

Having a TSP strategy that is tailored to your situation will give you the comfort of knowing that you’re doing the right thing for your future. Find out if Roth TSP is right for you by taking it one step at a time.

First, understand your current situation. Do you know your current tax rate? Are you better off choosing TSP contributions to pay taxes now, or in the future? Remember, no one has a crystal ball to predict the future. You should discuss this decision with a financial planner or tax advisor.

Second, look really closely at the Traditional and Roth options. To help you with these options, we’ve put together a lot of information and it’s all here on the website. We’ve also developed a Contribution Decision Wizard that lets you see the potential impact your decision will have now and later, when selecting Roth TSP or selecting Traditional TSP.

Third, develop your own plan. This plan might just revolve around your TSP strategy, which may be Roth or Traditional, or a combination of both. Or, it might include other retirement funds, tax strategies, and assets, depending on your own financial situation. Just remember, you can’t convert your Traditional TSP account balance to Roth TSP and you also can’t transfer Roth IRAs to Roth TSP.

Finally, get started! Once you’ve reviewed your current situation, your TSP options, and your retirement goals, you can then decide if Roth is right for you. Or, if you’ve already decided that Roth TSP is right for you, use your Service’s Electronic System or download and complete Form TSP-U-1.

As with all financial planning, you should re-evaluate your decisions periodically. So, even if Roth TSP may not be your best strategy now, be sure to check in whenever your life situation changes.

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As a TSP participant, you have the opportunity to invest in bonds. But what is a bond? In this video, we’ll go over some of the basics.

A bond is an investment where you lend money to an organization with the understanding that you’ll get paid back, with interest, after a certain period of time. Most bonds offer a fixed interest rate that never changes. This is why bonds are often referred to as ‘fixed income’ investments. And most bonds pay you that interest every six months.

Also, every bond has a maturity date. This means that if you hold onto your bond until that date, you should get back its value with interest. Bonds are generally considered less risky than investing in stocks. Because a bond has a stated value and a maturity date, you know that unless an organization goes bankrupt, you’ll get back the money you invested.

There are a couple of ways that you can invest in bonds through the TSP. First, you can invest directly in the TSP’s Fixed Income Index Investment Fund, or F Fund. The F Fund moves up and down with returns in the bond market. Or you can invest in any of the TSP’s Lifecycle funds, or L funds, because the F Fund is part of every L Fund.

But you should know that bonds do have risks.

Although bonds are fixed income investments, a fixed interest rate doesn’t guarantee a fixed price. This means that when interest rates rise, the price of the bonds in the F Fund or L funds will fall, which would lower the value of your TSP account.

And, as we mentioned before, if the company goes bankrupt, it may only return some of the money you originally lent to it. The F Fund minimizes this risk by diversifying; buying many different bonds and buying only highly rated bonds.

Want to know more about bonds, the F Fund, or any of the other TSP investment options? Watch our series of videos on YouTube. Or visit tsp.gov to review our fund information sheets.

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Combine and Save: Transfer Into the TSP

Wondering what to do with your 401 (k) or IRA from a previous job? Ready to keep more of your retirement savings just by combining it in one place?

Whether you are currently a civilian employee, a member of the uniformed services, or a separated participant, you have the option of moving money into your existing TSP account as long as the money is considered an eligible rollover distribution.

So why move your other retirement accounts into the TSP?

First, you will continue to enjoy TSP’s low costs. In 2013, you paid only 29 cents for every $1,000 you had invested in the TSP. Other retirement plans can cost significantly more! No wonder many participants have moved their money into the TSP. They’ve figured out that moving higher-fee retirement accounts into one with historically low costs lets you keep more of your money in your own pocket.

Also, the TSP offers a concise list of easy-to-understand investment options. You can choose from five individual funds or the Lifecycle (L) Funds that save you the trouble of figuring out which mix of funds is right for you. We think you’ll agree: The TSP makes saving for retirement simple. And here’s one more reason: You will have more of your retirement savings in one place. This makes it easier to evaluate whether you’re on target for reaching your goals. What types of money will the TSP accept?

The TSP will accept transfers and rollovers of tax-deferred money from traditional IRAs, SIMPLE IRAs, or eligible employer plans such as a 401(k) or 403(b). When transferred or rolled over, this type of money will go into the traditional balance of your TSP account. You can also transfer directly to the TSP Roth balances from eligible employer plans, however, Roth IRAs are not accepted. And you’ll be happy to know there are no limits on how much you can transfer or roll over into the TSP.

Ready to move your money? Here’s how:

Go to the website, print and fill out Form TSP-60 Request for a Transfer Into the TSP. To transfer Roth money, use Form TSP-60-R.

Or call the ThriftLine and ask to speak to a Participant Services Representative. We’ll help walk you through the steps.

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Are you thinking about taking a TSP loan? If so, then you should know it might cost you more than you think.

But first, let’s review how a TSP loan works. When you take one, you are borrowing from your own contributions and the earnings on those contributions. You are not able to borrow from any agency or service contributions or their earnings.

Once approved, your loan amount is removed from your TSP account. Your repayments, which are deducted from your pay, return the money plus interest to your account. The interest rate that you pay is the same as the G Fund rate at the time your loan application is processed.

Now for the costs.

When you borrow from your TSP account, you miss out on the earnings that you otherwise might have enjoyed had you not taken out the money in the first place. And while it’s true that you’ll be paying yourself back with interest, that interest will come from your hard-earned pay rather than from investment performance.

And if that interest turns out to be less than what your money could have earned had it stayed in your account, you’ll have less money saved even after you’ve repaid your loan. Think about it: This could cost you hundreds or even thousands of dollars in retirement income—especially if your repayments stretch over a long time period.

Also, you’ll have to pay a loan fee. It’s $50 and it’s deducted from your loan proceeds. So if you request a $2,000 loan, the amount you’ll get is $1,950.

Finally, if you fail to repay your loan in accordance with your Loan Agreement or you do not repay it when you separate from service, the TSP must report your unpaid amount to the IRS as a taxable distribution. This means that your loan will be closed and you will owe income taxes on the taxable amount of the remaining loan balance. If you are younger than 59½, this could be even more costly because you also may be subject to an early withdrawal penalty tax.

You can find out more about loans on our website and you can use our loan calculator in the Planning & Tools section to estimate loan payments. Just make sure that before you take a loan, you know what you’re getting into and what it’s costing you.

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The TSP for BRS Members: What’s it all about?

As a member of the uniformed services covered by the Blended Retirement System, or BRS, you receive many excellent benefits. The Thrift Savings Plan is one that will have a significant impact on how you will live your life after you retire.

The TSP is a defined contribution plan, much like a 401(k), which means the retirement income you receive from your TSP account will depend on how much money is contributed to it during your working years and the earnings that accumulate over time.

As a BRS member, you have the substantial added benefit of contributions from your service to your TSP account. You automatically get an amount equal to one percent of your base salary each pay period. You don’t even have to contribute any money to your TSP account to get this money; your service gives it to you. But you do have to have two years of service before you’re entitled to keep this portion of your balance.

You can also receive up to an additional four percent of your pay from your service. Think of it as free money and all you have to do is contribute five percent of your pay every pay period. These Service Matching Contributions start immediately if you began your service before 2018 and then opted into BRS. If you started on January 1, 2018, or later, you must serve two years before being eligible for matching.

Here are some other features of the TSP.

Investment Options. You get to choose from a diversified menu of funds or you can select from professionally designed target date funds.

Choice of Tax Treatments. You can make traditional contributions, which come out of your pay before tax and your investment earnings are tax-deferred. When you withdraw your money at retirement, the entire amount of your withdrawal is subject to income tax. You can also make Roth contributions, which come out of your pay after tax. Roth contributions are always tax-free when withdrawn. And earnings on Roth contributions are paid tax-free when withdrawn as long as certain IRS rules are met. Watch our Roth video to find out more about the TSP Roth option.

When you make traditional contributions from tax-exempt pay, you won’t pay any tax on the contributions, but your earnings will be taxed when withdrawn. And if you make Roth contributions from your tax-exempt pay, not only are your contributions tax-free when withdrawn, but so are their earnings as long as you meet the necessary IRS rules.

Low Administrative and Investment Expenses. That’s good news for you because your returns aren’t being eaten away by high fees.

Transfers in. If you already have tax-deferred money in a traditional IRA or another eligible employer plan, you can transfer those accounts into your TSP. You can also transfer in Roth money from an eligible employer plan, but not from a Roth IRA.

So here’s how it works: If you entered the service on or after January 1, 2018, your service automatically enrolled you in the TSP and began deducting three percent of your basic pay every pay period and depositing it into your TSP account. If you started before then and opted into BRS, then you enrolled at that time and chose your own contribution amount. Once enrolled, you control the amount of your contributions and what funds to invest in.

Want to know more? Visit our website, watch our other YouTube videos, or call the ThriftLine and speak to a Participant Services Representative.

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The TSP for non-BRS members: What’s it all about?

As a member of the uniformed services, you receive many great benefits. Even if you are not covered by the Blended Retirement System, you can still contribute to the Thrift Savings Plan. This can have a significant impact on your life in retirement. By contributing to the TSP, you can help protect your future while you protect our country.

Like a 401(k), the retirement income you receive from your TSP account will depend on how much money you contribute to it during your working years and the earnings that accumulate over time. And your TSP retirement benefits are yours no matter how long you serve!

So why is participating in the TSP a great idea?

Here are three reasons:

Low administrative fees. Some plan fees can take the bang out of your buck, but the TSP’s expenses are lower than similar plans, so you keep more of what you save.

Investment Options. The TSP offers you five individual investment funds that cover nearly all of the investment landscape. The TSP also has Lifecycle Funds, which are an ideal solution if you don’t have the time, experience, or interest in managing your retirement investments.

Tax Treatments. The TSP gives you a choice of tax treatments—pre-tax (traditional) and after-tax (Roth). Traditional contributions come out of your pay before tax and your investment earnings are tax-deferred. When you withdraw your money at retirement, it’s subject to income tax.

With Roth contributions, you pay taxes on the money you save before it goes into your TSP account. So you pay no income taxes when you take it out, and your earnings can also be tax-free if certain conditions are met. Watch our Roth video to find out more.

If you are serving in a combat zone, here’s something else you need to know: When you make traditional contributions from tax-exempt pay, you won’t pay any tax on the contributions, but your earnings will be taxed when withdrawn. And if you make Roth contributions from your tax-exempt pay, not only are your contributions tax-free when withdrawn, but so are their earnings as long as you meet the necessary IRS rules.

Here’s how you sign up:

Check with your service’s payroll office about its procedures for starting your TSP contributions. You’ll either use your service’s electronic system or you’ll fill out a TSP Form U-1, Election Form. If you complete Form U-1, remember that you must return it to your payroll office, not the TSP.

Want to know more? Visit our website at tsp.gov or call the ThriftLine and speak to a Participant Services Representative. For more information about contributing to the TSP, contact your service’s payroll office.

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New to the TSP? Here’s What You Need to Know

Welcome to the Thrift Savings Plan, the largest 401(k)–type plan in the world. Here are a few things you should know about it. As a brand new civilian employee, you’re automatically enrolled in the TSP, and 3% of your basic pay is contributed to your TSP account each pay period.

These contributions are invested in an age-appropriate Lifecycle fund. Our Lifecycle, or L Funds, provide a mix of everything from short-term U.S. securities to index funds that are made up of domestic and international stocks. The L Funds are invested based on the future date at which you expect to start withdrawing your money, and similar funds are common in most 401(k) plans.

But you need more than a strategic investment mix to get you to a comfortable retirement. You also have to contribute enough money to your TSP. On top of your salary, your agency will also contribute up to 5% of your pay to your TSP account with each paycheck. But you only get the full amount if you contribute at least 5% every pay period as well.

You can log into your electronic payroll system at any time to increase your contributions. We encourage you to log on and increase your contribution from the 3% default to 5% to take advantage of the full match. Don’t leave free money on the table.

While you’re there, consider what type of contributions to make.

You’re automatically making traditional contributions, which allow you to defer paying taxes until you withdraw your money. You may consider Roth contributions, which let you pay taxes on your contributions as you’re making them and receive your earnings tax-free at withdrawal, as long as you meet certain IRS conditions.

You can also transfer other eligible retirement plans into the TSP. This is something to consider, since the TSP’s low fees let you keep more of what you save, and the TSP’s investments are comprehensive and simple. Submit Form TSP-60 for traditional transfers, and form TSP-60-R for Roth transfers.

Investing in the TSP is the smart, simple way to save for your retirement. Visit us at tsp.gov to learn more.

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Uniformed Services: 3 Ways to Add $100,000 to Your TSP Account

Saving for retirement sounds daunting, but here’s some inspiration: Thousands of uniformed services members younger than 35 have $100,000 or more in their TSP accounts. Here’s how you might join them.

1. Dial down your cell phone. When you consider data and texting, most plans cost more than $75 per month. Saving that amount could grow into more than $106,000* after 35 years. You probably can’t give up your cell phone completely, but simply scaling back your usage—like making free Internet calls to reach family overseas—can make a difference.
2. Cut back your cable. The cost of cable is ever-increasing. If you’re willing to part with your 200 channels, saving that extra $80 a month can mean almost $114,000^* in 35 years. Many providers offer basic plans at a big discount.
3. Think small. Even minor changes can add up over time. For example, investing the $1.50 you’d spend on a soda from the base vending machine each day could grow to $45,000.^* And that fancy coffee? Saving the $3.50 you’d spend on a daily cup could brew into $105,000.* The important part is to start early and be consistent.

Found a way to save extra money? You can sign up for the TSP or increase your contributions by logging into myPay. In the “Traditional TSP and Roth TSP” section, choose how much of your pay you’d like to save, then click “Save” at the bottom of the screen.

To learn more, visit tsp.gov.

^* Figures assume consistent saving over 30 years and an investment return of 6% per year compounded monthly.

Video not available.

My name is Lola. I just left Federal Service.

I rolled my TSP account over into an IRA. I already regret it. I didn’t know about the additional annual fees, commissions, and charges I pay for the money I invest. Honestly, it was probably one of the single worst financial actions I’ve ever taken with my savings. I would deposit some of my retirement savings back into the TSP in a heartbeat if I had another chance.

The worst part is, I can’t go back.

[video rewinding]

My name is Lola. I just left Federal Service.

I decided to leave my retirement savings in the TSP. It seemed like a no brainer really. The TSP has low expenses so I keep more of what I save. Plus, I can still change my investment mix while continuing to accrue earnings. And I can still transfer other eligible retirement accounts into my TSP.

I knew I made the right decision when I heard financial professionals call the TSP the “best retirement savings and investment vehicle you’ll find anywhere.” Talk about a confidence boost.

I’m glad I thought this decision through. It’s not like I have a rewind button.

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Because You Asked: How Can Compound Earnings Work for Me?

Compound earning is a simple concept that could reap big rewards for you.

Compounding is powerful because it allows you to make money not just on what you contribute to your TSP account every pay period, but also on the money that it earns. Compounding makes it possible for your retirement savings to increase exponentially.

For example, if you invest $100 and, over the course of a year, earn a 5% rate of return, at the end of the first year, you’ll have $105. If you leave that money alone, and the next year you earn another 5% rate of return, you’ll have $110.25.

So, in the second year, you earned 5% on your original $100 contribution plus another 5% on the $5 you earned during the first year. At this rate, your original investment will double in less than 15 years^*.

Compounding is most effective the more years it has to work, so it’s best to start saving as soon as you can, and to save consistently. And you benefit whether you contribute a little or a lot to your TSP account.

Haven’t started yet? That’s ok. It’s never too late to save because every dollar makes a difference. Just sign into your agency or service’s electronic payroll system and choose the Thrift Savings Plan option. You can also complete Form TSP-1 or TSP-U-1 and return it to your agency or service.

To learn more, visit us at tsp.gov.

^*Assumes a consistent 5% annual rate of return.

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If you’re covered by the Federal Employees Retirement System, you rely on a three-part retirement package:

1. First is your basic annuity. After you retire, you’ll receive a pension based on your salary and how long you worked for the Federal government.
2. Next, like most workers, you’ll be eligible for Social Security benefits.
3. And you have the Thrift Savings Plan, the largest 401(k)-type plan in the world.

Combined, these three retirement benefits need to provide enough money for you to live your ideal retirement when you no longer get a paycheck. Generally, you can only make your basic annuity and Social Security benefits higher by working longer or earning more money.

But the TSP is different: It’s the one piece that is almost entirely up to you. Saving consistently and making smart investment choices can mean the difference between a comfortable retirement and a difficult one. Plus, the TSP includes “free” money since your agency will match up to 5% of your salary. And our Lifecycle funds provide simple investment options.

The TSP: No matter what your ideal retirement looks like, we can help you get there.

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