Transcription

Summary of theThrift Savings PlanPlan Contribute Invest

Table of ContentsThe Thrift Savings Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Your Retirement Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Establishing Your TSP Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2The TSP Contribution Election. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New Employee Checklist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Employee Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Agency/Service Contributions for FERS and BRS Participants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2234How Much You Can Contribute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A Choice of Tax Treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Traditional Contributions vs. Roth Contributions:An Example of the Effect on Your Current Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Traditional Contributions vs. Roth Contributions:An Example of the Effect on Your Long-Term Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Tax Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Moving Money from Other Plans into the TSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Investing in the TSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10The L Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Individual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fund Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Choosing Your Own Investment Mix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Comparison of TSP Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Contribution Allocations and Interfund Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Administrative Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11111212131415TSP Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17In-Service Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Withdrawals after You Separate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Taxes on Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IRS Required Minimum Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Automatic Enrollment Refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1717191919Death Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Beneficiary Participant Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Other Information about the TSP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21TSP Website (tsp.gov) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ThriftLine (1-877-968-3778) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Managing Your Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Participant Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Court Orders and Legal Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TSP Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212121212222Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Appendix: Getting More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

The Thrift Savings PlanThe Thrift Savings Plan (TSP), is a retirement savingsplan similar to 401(k) plans offered to private sectoremployees.EligibilityYour retirement system determines whether you canparticipate in the TSP. You’re eligible to participate ifyou’re in the following groups: a federal employee covered by the FederalEmployees Retirement System (FERS)a federal employee covered by the Civil ServiceRetirement System (CSRS) a beneficiary participant account established foryour spouse in the event of your death1a variety of withdrawal optionsThe TSP is one part of your retirement benefit package.Depending on your retirement system, your benefitmay also include Social Security, a FERS basic annuity,a CSRS annuity, military retired pay, or a combinationof these.TSP benefits differ depending on your retirement system(FERS, CSRS, BRS, or non-BRS uniformed services).Regardless of your retirement system, participatingin the TSP can significantly increase your retirementincome, but starting early is important. Contributingearly gives the money in your account more time toincrease in value through the compounding of earnings.a member of the uniformed servicesCalculators at tsp.gov to help youplan for your future:a civilian in certain other categories of federalservice such as some congressional positions andsome justices and judgesHow Much Should I Save?How Much Will My Savings Grow?Contribution Comparison CalculatorYou can check with your personnel or benefits office ifyou’re not sure which retirement system applies to you.Your Retirement Savings automatic payroll deductionsa diversified choice of investment options,including professionally designed lifecycle fundsa choice of tax treatments for your contributions:- traditional (pre-tax) contributions andtax-deferred investment earnings- Roth (after-tax) contributions with tax-freeearnings at retirement if you satisfy the IRSrequirements (see pages 6 – 9)low administrative and investment expenses 900,000Total Account BalanceThe purpose of the TSP is to give you a long-termretirement savings and investment plan. Saving for yourretirement through the TSP provides many advantages,including the following:Earnings Potential ofYour TSP Account 800,000 700,000664,722 600,000 500,000 400,000335,288 300,000 200,000 100,0000154,22054,699After 10 yrsAfter 20 yrsContributionsAfter 30 yrsAfter 40 yrsEarningsagency/service contributions, if you are anemployee covered by the Federal EmployeesRetirement System (FERS) or a member ofthe uniformed services covered by the BlendedRetirement System (BRS)under certain circumstances, access to yourmoney while you are still employed by thefederal government1 For more information, see the TSP booklet Your TSP Account:A Guide for Beneficiary Participants.1

Establishing YourTSP AccountThe first contribution to the TSP—your own contributionor that of your agency or service—establishes your account.contributing your own money, you still have a TSPaccount with accruing Agency/Service Automatic (1%)Contributions. You have to make a contribution electionthrough your agency or service to start contributingyour own money to your account and to receive Agency/Service Matching Contributions. See “Agency/ServiceContributions for FERS and BRS Participants” on page 4.If you’re a FERS or CSRS employee or a BRS memberwho began or rejoined federal service after October 1,2020, your agency or service automatically enrolled youin the TSP, and 5% of your basic salary is deducted fromyour paycheck every pay period and deposited into yourTSP account2, unless you made a contribution election tostop or change your contributions. If you’re a BRS memberwho stopped your contributions during the year, youare automatically re-enrolled at 5% of your basic payon January 1. If you’re FERS or BRS, you also getcontributions from your agency or service. See “Agency/Service Contributions for FERS and BRS Participants” onpage 4.If you’re not described in either of the previousparagraphs, then you have to make a TSP contributionelection through your agency or service to establish a TSPaccount. You do not receive agency/service contributions.If you’re a FERS or CSRS employee or a BRS memberwho began or rejoined federal service betweenAugust 1, 2010, and September 30, 2020, you wereautomatically enrolled at 3%.increase or decrease your contributions if you wereautomatically enrolled;If you’re a FERS employee hired before August 1,2010, or a BRS “opt-in” member3 and are not2 BRS members who began service on or after January 1, 2018,are not automatically enrolled until they have served for 60 days.3 Members of the uniformed services who had served fewer than12 years as of December 31, 2017, were given the option ofjoining BRS during calendar year 2018.The TSP Contribution ElectionTSP contributions are payroll deductions. You have tomake a contribution election through your agency orservice to start your contributions if you were notautomatically enrolled;change the amount of your employee contributionsor their tax treatment (traditional or Roth); orstop your contributions.First, ask your personnel or benefits office whether youragency or service handles TSP enrollments throughpaper TSP forms OR electronically through automatedsystems such as Employee Express, EBIS, myPay,LiteBlue, or the NFC EPP.New Employee Checklist1.Look for your TSP account number, web password, and ThriftLine PersonalIdentification Number (PIN) in the mail. Account number web password create user ID for online account access Account number PIN ThriftLine (telephone) account access2.Decide how you want contributions to your account to be invested, and access youraccount through the web or ThriftLine to do the following: Make a “contribution allocation” to change the investment of futurecontributions to your account (page 14). Make an “interfund transfer” to change the investment of money already inyour account (page 14).3.2Think about whether you need to designate beneficiaries to receive your account in theevent of your death (page 20).

TSP CONTRIBUTIONScome from 2 sources:Your Employee ContributionsRegular(including automaticenrollment contributions)Traditional(pre-tax)Catch-Up*(age 50 or over)Choice of 2 Tax TreatmentsRoth(after-t