What are tsp strategies – What is a tsp strategy? 1-800-566-1002 . What are the best types of tsp strategies for retirement and learn how you can avoid the most common mistakes that individuals have made when looking to set up a tsp strategy.
New Guidelines on Accessing Your TSP Money

Loans – Anyone who is actively employed that has a vested balance in the TSP may use TSP 20 to request a general purpose loan or a loan for the purpose of a residence. The amounts you can take, the repayment schedule, and consequences for nonpayment on the loan should be checked with TSP so you understand. However it is an option to you which provides flexibility, and perhaps the opportunity to avoid much higher interest debt or a financial emergency.

Hardship Withdrawals – While working, but prior to age 59.5 it is also possible to access funds if it can be documented that there is a financial hardship. This type of withdrawal does not prevent the 10% penalty, or other taxes, it simply allows the withdrawal to occur when it otherwise wouldn’t be available. In addition any contributions through payroll to the TSP are disallowed for the subsequent 6 months. See TSP form 76 and contact TSP for details.

A Brand New Option For Certain Federal Employees – Just recently here in 2015 it was passed that employees in federal law enforcement, customs and borders protection officers, federal firefighters, and air traffic controllers who separate during or after the year in which they turn age 50 may withdraw funds directly from their TSP balance and avoid the 10% penalty that previously applied. This does not work if you do any of the following: take a withdrawal before the end of 2015 as it starts next year, retire from one of these occupations prior to age 50, or roll over your balance to an IRA and then elect a withdrawal from there.

Age Based

Age 55 – If you leave government service in the calendar year that you turn age 55 or older, rather than 59.5, then you can access the funds in your TSP as a direct withdrawal and not incur the 10% tax penalty. The withdrawal you take in hand will still incur income taxes. Rolling over these funds to an IRA cause this temporary period of avoiding the 10% penalty to end and withdrawals from the IRA will carry the 10% penalty until age 59.5

Age 59.5 – This is the easy one. If you are still actively employed with the federal government and you are over the age of 59.5, meaning it is less than 6 months to your 60th birthday, than you are able to access your funds one time. This one time transaction may be a withdrawal directly to you or it may be a rollover to a traditional IRA in the marketplace. It may account for some of the money or all of the money. Your contributions through payroll will continue to go into your TSP balance. It will simply start from zero again if your one time transaction accounted for all the money previously there. This is TSP Form 75.

Age 70.5 – If you have retired from federal service, but not rolled over your balance, distributed it as a taxable check, or turned it into a second annuity beyond FERS/CSRS then you will have to start taking taxable withdrawals from your TSP balance upon reaching age 70.5. Currently this is equal to 3.65% of the account balance and increases as a percentage of it over time.
Vesting – In all of these scenarios involving you accessing your money from TSP there is a concept called vesting. Typically by the time someone has retired they have fully vested in the employer contributions but it is possible that you are not entitled to all of the funds you are seeing on your account statement. There are two types of agency contributions to your TSP. Automatic and Matching contributions. Automatic is equal to 1% of your salary whether you contribute or not but you have to stay in for 3 years to keep these deposits. Matching contributions go for each percentage of your salary you contribute up to a maximum of 5%. These do not come with a vesting schedule.
On all of these types of withdrawals or transactions you want to double check the form number and details on the form with TSP as well as your particular situation with them, and a tax accountant for anything involving taxes.
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TSP Strategy Review: Maximizing Your Retirement Savings

The Thrift Savings Plan, or TSP, is a retirement savings plan for federal employees and members of the military. The plan offers several investment options, including five individual funds and various Lifecycle funds. As a TSP participant, it is important to develop a TSP strategy that maximizes your retirement savings potential. In this TSP strategy review, we will discuss some important considerations and tips for developing an effective TSP investment strategy.

Understanding Your Investment Options:

Before developing your TSP strategy, it is essential to understand the investment options available in the plan and the risks associated with each option. The TSP offers five individual funds, including the G Fund, F Fund, C Fund, S Fund, and I Fund. Each fund represents a different investment category, such as government bonds, corporate bonds, small-cap stocks, large-cap stocks, and international stocks.

In addition to individual funds, TSP participants can also choose from various Lifecycle funds that are designed to adapt to your changing investment needs as you get closer to retirement. Lifecycle funds are a mix of the individual TSP funds and are gradually reallocated as you move closer to your retirement date to reduce risk and protect your savings.

Some important considerations for selecting an appropriate investment option include your age, risk tolerance, and retirement goals. For example, if you are young and have a long investment horizon, you may want to consider investing more aggressively in the C Fund or S Fund. If you are closer to retirement, you may want to shift your investments to a more conservative allocation, such as the G Fund or a Lifecycle fund that matches your retirement date.

Tips for Developing a TSP Strategy:

1. Start early: The earlier you start contributing to your TSP, the more time your investments have to grow. Even small contributions can add up over time and can make a significant difference in your retirement savings.

2. Diversify your investments: Investing in a mix of TSP funds can help reduce risk and maximize returns. Consider diversifying your investments among the five individual TSP funds or choosing a Lifecycle fund that matches your investment profile.

3. Contribute the maximum amount: The TSP allows participants to contribute up to a certain limit each year, which can vary based on your income and age. Contributing the maximum amount can help you maximize your retirement savings and take advantage of the tax benefits offered by the TSP.

4. Use the TSP calculator: The TSP offers an online calculator that can help you estimate your retirement savings based on different investment scenarios. Use this tool to help you develop a TSP strategy that aligns with your retirement goals.

Final Thoughts:

Developing an effective TSP strategy can help you maximize your retirement savings potential and achieve your retirement goals. Consider the investment options available in the TSP, your age, risk tolerance, and retirement goals when developing your TSP strategy. Be sure to diversify your investments, contribute the maximum amount, and use the TSP calculator to help you make informed investment decisions. Following these tips can help you build a strong and sustainable retirement savings plan.