Young Feds: Your Retirement Questions Answered

So you’ve seen the TSP’s Take FIVE for Your Future campaign, learned that you could be missing out on thousands of dollars towards your retirement, and you’re ready to do something about it. You’ve logged into your agency’s electronic payroll system, or you’re in the process of completing Form TSP-1 to change the amount you’re contributing…

But then you come to a complete stop—not because you ran out of ink or because your computer shut down, but because you still have questions. In this post, we’ll try to get some of those common questions answered.

1. How much should I contribute?

If you’re covered by the Federal Employees Retirement System (FERS), then you should consider contributing at least 5% of your salary so that you don’t miss out on free matching money from your agency. We know that this is not always an easy decision, so the TSP provides great tools to help put things in perspective.

• Use the “Paycheck Estimator” calculator to help you decide on a comfortable amount. It looks at how a potential contribution could affect your take-home pay and your TSP savings over time. Just remember to choose “FERS” as your retirement system.

• For a better idea of how much you need to save for retirement, take a look at our “How Much Should I Save?” calculator.

• For those of you who are already contributing at least 5% but would like to contribute more, check out our “How Much Can I Contribute?” calculator. It will help ensure that you don’t reach the IRC elective deferral limit before the end of the year.

2. Which fund(s) are right for me? What does “diversify” mean?

We have 5 core funds: the G, F, C, S and I Funds. Knowing which of these are best for you is not an easy decision, especially when it comes to “diversifying” your investments. When you diversify—or spread your money among different kinds of investment funds—you improve your chances of better returns over time.

We also offer a low maintenance option in the form of 5 Lifecycle funds. The key to choosing these funds is in their names: L 2050, L 2040, L 2030, and L 2020 are named based on the approximate year that you plan to begin withdrawing from them. These funds are designed not only to diversify your investments but also to assess risk and return with your retirement timeframe in mind. It’s the next best thing to an advisor.

3. How do I change my investments?

You can change your investment choices online in the My Account section of tsp.gov. Once you’re logged in:

• To change how new money coming into your account is invested, go to Online Transactions: Contribution Allocations

• To change how money that’s already in your account is invested, go to Online Transactions: Interfund Transfers

You can also call the ThriftLine at 1-877-968-3778. You can generally expect to see changes by the next business day. To learn more, watch our YouTube video “Contribution Allocations and Interfund Transfers.”

4. How can I stay current on the status of my TSP account?

We’ve made it pretty simple. You can receive email notifications when new or updated information that interests you is available. For example, you can subscribe to receive email notifications when your participant statements are posted online.

We provide a detailed breakdown of the financial activity in your account in quarterly participant statements, which are available through My Account in January, April, July, and October. (You can also elect to have them mailed.) We also issue annual statements each February to give you a summary of your account activity for the year. Check out our guides to understanding your quarterly and annual statements at tsp.gov.

Still have questions? Call us at 1-877-968-3778 and choose option 3. Our Participant Service Representatives are available Monday through Friday from 7 a.m. to 9 p.m., Eastern time.

Similar to private sector 401(k) plans, the TSP is a defined-contribution plan that provides Federal employees the opportunity to save for additional retirement security. If you have a question or comment about this post, please contact us directly. We are unable to respond to any messages on this site.