Thrift Savings Plan (TSP) (2024)

FAQs

How do I maximize my TSP matching? ›

Maximizing Agency or Service Contributions

To receive the maximum Agency or Service Matching Contributions, you must contribute 5% of your basic pay each pay period.

There is a 3% dollar-for-dollar matching on your pay, and 50 cents on the dollar for the next 2% of pay contributed to the TSP account. Therefore, 5% of your basic pay is the absolute minimum you should contribute to collect the full agency matching contributions.

To calculate your required minimum distribution, simply divide the year-end value of your IRA or retirement account by the distribution period value that matches your age on Dec. 31st each year. Every age beginning at 72 has a corresponding distribution period, so you must calculate your RMD every year.

Average TSP balances

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.

If you're a FERS or eligible BRS participant, you receive Agency/Service Matching Contributions on the first 5% of pay you contribute every pay period. The first 3% is matched dollar-for-dollar by your agency or service; the next 2% is matched at 50 cents on the dollar.

Your catch-up contributions will be in addition to the 2023 TSP regular contribution limit, which means employees can contribute up to $30,000 in 2023. To maximize the catch-up contribution amount of $7,500 for 2023, employees will need to contribute an additional $288 per pay period ($7,500/26 = $288.46).

Employees should invest at least 5% in the TSP; that is the percentage needed to obtain the maximum available matching funds. Beyond that, Employees need to balance long-term investment needs against other needs.

Your best bet is to stick with the C, S and I Funds. Here's the ratio we recommend for your portfolio: 80% in the C Fund, which is tied to the performance of the S&P 500. 10% in the S Fund, which includes stocks from small- to mid-sized companies that offer high risk and high return.

Experts say to have at least seven times your salary saved at age 55. That means if you make $55,000 a year, you should have at least $385,000 saved for retirement.

How to figure out RMD for 2023? ›

So how do you calculate your RMD for a given year? By dividing the value of each retirement account at the end of the previous year by the distribution period based on what your age will be in the year you take the RMD.

SECURE 2.0 increases the start age for required minimum distributions from 72 to 73 in 2023 and then further increases the start age to 75 in 2033. We're continuing to assess how SECURE 2.0 will affect the TSP and will provide updates as more details are finalized.

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.

There are 3.6 million Federal Employees Retirement System participants, with an average account balance at the end of 2020 of $164,000.

The largest account balance has gone from $9.3 million in March of this year, to $10 million at the end of June. When the TSP started, there were only a handful of millionaires who brought their...

The rule of 72 is a great way to estimate how long it will take for your TSP to double. This rule says that if you divide 72 by your average investment return then you'll get how many years it takes to double. For example, if on average you earn 10%/year then your money will take 7.2 years to double (72/10= 7.2).

In order to attain this, Fidelity suggests you focus on achieving certain benchmarks. At 30, you should have half of your annual salary saved. By 40, you should have twice your salary, and by 50, you should aim for about four times your salary in retirement savings.

If you opt into the BRS, your service will begin contributing an amount equal to 1% of your basic pay into your TSP account each month. This does not come out of your pay. It's called a Service Automatic (1%) Contribution and it begins immediately.

If you over contribute, you may request a refund of the excess amount from the TSP. For a limited in January each year, we make the Refund Request Form available. You can get the form by calling the ThriftLine or logging in to My Account. We must receive your excess deferral refund request no later than March 15.

When should I change my TSP contribution to 2023? ›

To contribute the 2023 maximum annual amount for both regular TSP and TSP Catch-up for a combined total of $30,000, you should enter one election amount of $1,154 into myPay during December 4 – 10, 2022, and your election should be effective on December 18, 2022, the first pay period for 2023.

Federal employees who are members of the Thrift Savings Plan (TSP) have the potential of becoming a TSP millionaire, with a fat nest egg in addition to their CSRS or FERS annuity. As of November 2022, there are 65,000 TSP millionaires.

So to answer the question, we believe having one to one-and-a-half times your income saved for retirement by age 35 is a reasonable target. By age 50, you would be considered on track if you have three to six times your preretirement gross income saved.

These rules of thumb say you should have saved ... 2 to 3 times your income by age 40. 3 to 4 times your income by age 45.

The 4% rule is a popular retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4 percent of their savings during the year they retire and then adjust for inflation each subsequent year for 30 years.

Choosing the Best TSP Funds

The G Fund: This fund is considered the investment choice with the lowest risk among the TSP fund options. While investment returns are historically very low, this fund invests in short-term US Treasury securities and there is very little risk of losing money in this fund.

TuSimple Holdings Inc (NASDAQ:TSP)

The 3 analysts offering 12-month price forecasts for TuSimple Holdings Inc have a median target of 2.00, with a high estimate of 5.00 and a low estimate of 1.00. The median estimate represents a -9.71% decrease from the last price of 2.22.

Many Americans target $1 million as their "dream nest egg" for retirement, but the truth is that in many states, even $750,000 can be more than enough. Although your longevity and your lifestyle can greatly impact how much you'll need for a successful retirement, the state in which you live can also play a big role.

Can I retire at 50 with $300k? The problem with having a $300,000 nest egg, as opposed to $500,000 or $1 million, is that retiring early isn't as viable an option. At age 50, you'll have to stretch that $300,000 out further, so it will be important to find an investment with a high return.

Can You Retire With $1.5 Million at 55? If you have $1.5 million saved up and want to retire at 55, this may be enough for you. The reality is that it all depends on your withdrawal rate — the amount of money you consistently take out of your accounts to support yourself — and how long you live.

What is the RMD on $1000000? ›

Here's an example of how the life expectancy factor works:

If your IRA balance at year-end is $1 million and you're 73 years old, your life expectancy factor is 26.5 according to the IRS. Divide your balance by 26.5 ($1,000,000/26.5), and that equals $37,735.85, which is your RMD amount.

Required minimum distributions (RMDs) are the minimum amount that you must withdraw from certain tax-advantaged retirement accounts. They begin at age 72 or 73, depending on your circ*mstances and continue indefinitely. There is, unfortunately, no age when RMDs stop.

Minimize RMD Taxes With a Roth Conversion

If you have assets in a tax-deferred account, you could avoid RMDs and their associated taxes by rolling the balance into a Roth IRA. This is done through a Roth conversion in which you essentially turn tax-deferred assets into tax-free ones.

Under this 10-year rule, annual RMDs must be taken over the life expectancy of the designated beneficiary beginning by Dec. 31 of the year that follows the year the participant dies. In addition, the inherited account must be fully distributed by Dec. 31 of the 10th year following the year the participant dies.

The IRS allows penalty-free withdrawals from retirement accounts after age 59½ and requires withdrawals after age 72. (These are called required minimum distributions, or RMDs). There are some exceptions to these rules for 401(k) plans and other qualified plans.

You can make a one-time (also known as "lump-sum") withdrawal or a series of withdrawals, or schedule automatic withdrawals. Whether you want to transfer your RMD funds to another account, take automatic withdrawals, or take your RMD as cash, we can help. If you're a Schwab client, call us at 866-855-5636.

If you have already separated from federal service, the IRS requires you to make a withdrawal choice before April 1st (of the year following the year you become age 72, referred to as the mandatory TSP Withdrawal Age).

In a nutshell, Ramsey advises federal employees to invest at least 5% in a Roth TSP, then invest the rest in a Roth IRA. He also recommends investing in a handful of TSP funds -- funds C,S, and I -- with a higher percent in the C Fund (at least 60 to 80%).

Your best bet is to stick with the C, S and I Funds. Here's the ratio we recommend for your portfolio: 80% in the C Fund, which is tied to the performance of the S&P 500. 10% in the S Fund, which includes stocks from small- to mid-sized companies that offer high risk and high return.

Can I increase my TSP loan amount? ›

You cannot voluntarily reamortize—change the term and payment amount of—your loan. Your loan payment amount only changes if there's a change in your payroll schedule or following the suspension of loan payments during a period of nonpay status.

It depends, but most people should contribute to their TSP at least up to the matching funds limit (3% of your salary). Beyond this, the TSP is better if your taxes are high today and you expect them to be much lower in retirement. It is better to use your deduction against the higher tax rate.