The Investment Options-How should I invest my TSP?
This is a question that we get a lot but unfortunately there is no cookie cutter answer for this one. It depends on your risk tolerance and how many more years until you retire. Let me give you a couple of examples. A 26-year old isn’t going to retire for another 30-40 years so he has the ability to invest somewhat aggressively because we know that the market will go up over time. On the other end of the spectrum, if someone is 65 and wants to retire next year, they wouldn’t know where the market will go in the short term and couldn’t afford much volatility. The factors directly affect our investment choices.
There are 6 investment options in the TSP. See Below:
G Fund- This fund invests in short-term U.S. Treasuries which have next to no risk. Because there is no risk, there returns is relatively small. Generally, this fund doesn’t quite keep up with inflation, but it is better than parking your money in a savings account.
F Fund- This fund tracks the U.S. bond market. This means that if bonds go up then this fund will go up accordingly. This fund will vary more than the G fund but is still relatively stable. Most of the time, this fund will grow faster than the G fund but not as fast as funds invested in stocks.
C Fund- This fund invests in the S&P 500 which is comprised of many large to medium U.S. companies. It is riskier than the F fund but generally has higher returns.
S Fund-This fund follows small cap stocks which are smaller companies. Because they are smaller, they have a greater ability to grow but are not as stable as large companies.
I Fund- This fund invests in international stocks. This fund generally is the most volatile of all the funds but give participants a way to not put all their eggs in the United States basket.
L Fund- This fund is a mixture of the other 5. The advantage of this fund is that as you get closer to retirement, it will automatically make your portfolio more conservative. This is convenient for many because they don’t have to manually change their allocation as they get older.

Another HUGE advantage of the TSP funds is the incredibly low fees. The average TSP fee is .04 %. Just to be clear that is only about 40 cents for every $1,000 invested. Compare that to 401(k) fees that range from .2%-2%! It is a night and day difference that most people don’t know about. This is extremely unfortunate because these fees are sometimes a part of the reason why people don’t have enough money in retirement. So if you are a federal employee the TSP helps makes your investment life super simple and affordable….(read more)

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As a federal employee, you have access to the Thrift Savings Plan (TSP), a defined contribution retirement savings plan. TSP is one of the best investment options available for federal employees for many reasons, including low fees, diverse investment options, and automatic enrollment in the program.

One of the primary benefits of TSP is its low fees. The fees associated with TSP are some of the lowest among retirement plans in the United States. That means federal employees can keep more of their hard-earned money invested in their retirement accounts instead of paying high fees to investment firms.

TSP also provides investment options that are tailored to your specific needs. The plan includes five investment options: the G Fund, F Fund, C Fund, S Fund, and I Fund. The G Fund invests in government securities, while the F Fund invests in fixed-income bonds. The C Fund invests in stocks that reflect the performance of the S&P 500. The S Fund invests in mid-sized and small-sized American companies, and the I Fund invests in global stocks. With this diverse range of options, federal employees can customize their portfolios to fit their individual investment objectives and risk tolerance.

Additionally, TSP provides automatic enrollment for all eligible employees. This means that you are automatically enrolled in the program, and a portion of your income is invested in your TSP account. While participation is voluntary, this automatic enrollment can be a tremendous benefit for those who may not have the knowledge or discipline to invest in their retirement savings.

Lastly, TSP offers excellent resources to help federal employees make informed investment decisions. The TSP website provides information about each of the investment options, including their historical performance and risk levels. The website also provides a wealth of educational resources, such as videos, webinars, and calculators to help you plan your retirement investment strategy.

In summary, TSP is an excellent investment option for federal employees due to its low fees, diverse investment options, automatic enrollment, and educational resources. By making wise investment choices and taking advantage of TSP, federal employees can take control of their retirement savings and build a financially secure future.