#ThirftSavingsPlan #SaturdaySchool
So to be perfectly honest, I had no clue this existed until I started talking with my father in law. I'm new to the family and honestly never expected to talk w/ him about personal finances ... until I him and my mother-in-law listened to @brendanschema 's podcast that I was on last month while road tripping 🤯. Also this is my shameless plug for you to go listen to his Podcast - http://anchor.fm/financialfriends ... spoiler he is going to do big things, you heard it from me first.
WHO should invest in Thrift Savings Plan (TSP)?
- Federal employees and members of the uniformed services that are eligible for this plan should contribute as this is essentially an employer 401(k) and may have a match
- "Government employees can contribute up to $19,500 to a TSP in 2021. If they 50 or older, they can contribute an additional $6,500." - Investopedia
- TSPs accept rollovers from previous retirement plans such as an old employer 401(k)
WHAT is a Thrift Savings Plan?
- A tax advantage retirement savings plan that is akin to an Employer 401(k), but essentially offerred to government employees
- Investing options w/in the plan are limited to: G fund (government securities), F fund (corp and gov bonds), C fund (S&P500 index), S fund (small cap index), and I fund (int fund).
- "A sixth choice is to invest in a Lifecycle Fund, containing a percentage of all five individual funds. As a lifecycle fund approaches maturity, the funds in the portfolio are rebalanced towards less risky assets" - Investopedia
WHERE can I learn more about Thrift Savings Plans?
- This is unique to federal employees and so I would first start with the resources provided to you by your Human Resources specialist
- I don't think external resources are honestly going to be much more help over the Investopedia page in the comments section
WHEN should I invest in Thrift Savings Plan?
- If this is your work's equivalent to an Employer 401(k) and has a matching program, the Thrift Savings Plan should be the first place to save for retirement so that you get that match money
- As with any retirement savings account, the earlier you can fund the account and allow for time and compounding to grow your investments, the better it is for you
- If you have maxed out the match ... then consider moving on to a Roth or Traditional IRA which has more investment options available
WHY should I invest in Thrift Savings Plan?
- If there is a match then this is free money from your employer if you contribute the max
- TSPs can come in Traditional and Roth which means that they have the benefits of their respective category whether tax savings on front or back end
- TSPs are a tax advantage account meaning it can grow and compound tax free for retirement
HOW do I start my Thrift Savings Plan?
- Step 1 - Talk to HR and figure out how to start the Thrift Savings Plan
- Step 2 - Figure out how to fund the account and at least get the maximum match
- Step 3 - Be sure not to forget to pick which fund to invest in depending on risk tolerance
Resources: Investopedia / Video: https://www.youtube.com/watch?v=_km7chtcnUg
P.S.: Who here has Thrift Savings Plan as their employer retirement savings account?
#WeekendVibes #TaxEfficiency #TaxTail
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Never heard of this one. I have to check it out. In PA teachers work under state plan so i wonder if this qualify 🤔
@celtic I think teachers may fall under 403b instead which is my post for next Saturday
@ctsshah First off thank you for the shoutout! 🌱
I was going to look up the TSP the other day but decided not to dive into it. It is like you knew I wanted to learn more 👀
@brendanschema ofcourse! You were my first podcast. Actually excited to have recorded a video chat w/ @A007Kenny and @BREYZEHN last night. They run a nice YouTube channel called Young and Successful - https://www.youtube.com/channel/UCOC6qbE0tBDdYrGbfEXHM8A
@A007Kenny sweet tell her to do me a favor and subscribe and like it 😜. I gotta hustle out there 😂😂😂😂
❤️ Definitely will
@brendanschema we’ve heard a lot of great things about you. We would definitely love to have a chat.
@brendanschema yessir. Lets make it happen!
Thanks
Wonderful information for all. Thanks for the inspiration and insight bro
@BREYZEHN @A007Kenny Aye, let's go! I will be in touch soon, bear with me, school soaks up a ton of time!
My husband works Federal and has this. The match is awesome and adds up quickly.
I don't think I've heard of tsp before. We have something just called deferred compensation plan here on Missouri, which has gotten better over the years, bit I had to push my wife to put more into it lol.
If you are an employee of the Department of the Army I can help you. Also, if you are a federal employee, you are enrolled to a certain extent. There is your contribution, agency matching contribution, and automatic contribution. You have the option for Traditional and Roth IRAs. But, your contributions will qualify for the Roth option. You can contribute up to $750 per paycheck, which is 26 weeks…See more
@celtic unfortunately this is only for federal employees.
@CKCristini that is awesome! Love to hear people taking advantage of employer match!
@vbtiger16 unique to your employer kind of like a 403b over a 401k
@SarcasticSpy nice thanks for the additional info!!
@ctsshah i see what you did there.😂 Smoooooth operator!!!
I have TSP and I'm nearing retirement. I have 7 figures in my account and started investing in Public as a conduit to channel my RMDs in 15 years. I maxed my contribution every year to get the max matching. Great program if you're a federal employee - I highly recommend it. 😉
@boilermaker that is awesome!!!! Congrats. Any specific plans for the RMDs? Since I am super far off from retirement does the RMD count as earned income that can then be put back into a Roth IRA? And go Big Ten!
Finally something I have knowledge on! I was a Fed for almost 10 years, I contributed from day 1 with the match. You can even take out a loan of your money and they charge a low % and give you the interest once you’ve paid it off! I now just watch it on mint with those beautiful six figures and am so proud! They have even opened it up to the military to use which is great esp for those who don’t r…See more
@ctsshah I have not read up too much on RMDs but I know it's based on your 401k balance the previous December 31, and the percentage increases each year. I believe it is taxed income, but not earned income (I may be wrong). Boiler Up! 😃
@positivityandsass with enough time you will surely get there!!!! Love it
@boilermaker that is too bad it isn't earned income. Would be cool to take the RMD put it into a Roth and then put it into dividends
@ctsshah Yes. Getting older is scary. I plan to start a second career after I retire, with breeding horses, and even if I break even I'll still be happy doing what I want. Already bought the land and will break ground soon to start raising a barn and fencing pasture; the house comes last. All of this was made possible by proper investment in my 401k. If I can do it, so can you! 😃
Boiler Up!…See more
@boilermaker appreciate you sharing! Really helps new investors to see the why!
